Discussing Price
Most lawyers hate discussing money face to face. They much prefer to leave the client meeting, summarise their thoughts in an e-mail, and mention money slightly deferentially towards the end of their note. The note rarely mentions the partner's standard rate; it's usually discounted in some way, even if the potential client hasn't spoken about rates.
Why is this a poor way to proceed?
1. Most people - apart from the incredibly rich or incredibly stupid - want to know how much something will cost. If they don't ask, it's not because they don't want to know, it's because they find it awkward.
2. The hourly rate is a poor indicator of how much something will cost overall. You may say "but I don't know", which is fine from your point of view (the client is carrying all the risk) but worrying from mine. Didn't you say you were an expert? Yet you can't give any indication of price?
3. There are lots of different ways of approaching payment upfront, monthly billing, success fees, blended fees, capped fees, fixed fees, bell fees (I made that last one up) - that there needs to be a discussion with the client before you can suggest something that will meet his needs.
4. If the client can't afford you, it's better to find out sooner rather than later. The time taken to write your follow up note (2 hours?) plus chasing phone calls (another 30 minutes?) could have been far better spent on other work if the client had no intention of paying your rates.
What's the better solution?
Try this.
Once you have heard the client's preferred outcome, and any other factors you consider elegant, you should be able to give a banded cost.
For example. "similar clients in similar circumstances have spent between £8-12,000 dealing with a matter like this. Is that about what you were expecting?" Then keep quiet. Say nothing. Absolutely nothing. Wait for the client to respond. Too many lawyers wait but a few moments before starting to justify their price, reduce their estimates, or promising some special arrangement for such a discerning person. Hold your fire. You are a skilled professional, not a souk trader. Be silent. When the client is ready he can then ask specific questions about what makes the prices go up or down, as well as any other pricing alternatives they want to explore. If you think you're worth what you cost, you should be confident to tell the client face-to-face, and gauge his or her reaction.
Note that you’re giving an estimate for the required service, not quoting an hourly rate. Your hourly rate is of interest to you, and your finance director, but doesn’t help me, the client, unless you are asking me to compare the quality of lawyer by using price as the measure. Which you’re not – are you? Hourly rates are required when they are asked for. Not before, or instead of a sensible discussion around value/price.
[By the way as a working guide, an upper price of 150% of the lower price sounds suitably precise. A guide of £5-50,000 is unhelpful.]
- So next time you are with a prospective client, tell him the price, and be pleasantly surprised by the reaction.