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How to Prepare Clients for Sticker Shock

By William Vogeler, Esq. on October 01, 2018 3:57 PM

"How much is your retainer?" the client asked.

"That will be $25,000," the lawyer responded.

"Let's make it $50,000," the client told the shocked attorney.

True story, but it doesn't usually happen like that. Most of the time, you have to prepare the client for sticker shock.

Be Up Front

When quoting fees, don't be a car salesman. The sticker price has to be the sales price. Discounts, OK; hidden costs, not.

You have to explain the difference between fees and costs and other particulars. It's an ethical thing.

Even if you are working on an alternative fee agreement, you have to make sure the client understands the cost of a case. This is one of the biggest potential pitfalls for lawyers and clients.

The real bane of hourly work is not indentured servitude; it's to have a client complain after you've done the work and then not pay your bill. Do not ever guarantee the ultimate fee -- unless you really want to work on a flat-fee basis.

Bill Often

Bill at regular intervals, and sticker shock will be less likely. It's like your cellphone bill; you won't realize when you've spent almost $10,000 if your monthly bill is only $250.

Except maybe for a dial-a-lawyer, an attorney's bill typically exceeds $250 a month. But back in the day, that was an hourly rate.

Which is why you ask for a reasonable retainer in the beginning. Put that all in writing -- retainer, hourly rate, no guarantee -- when you first quote the client.

And if a client gives you twice the asking price, put a bigger sticker on the next deal.

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