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June 18, 2007

Should You Charge For An Initial Consultation?

This is a very common question a new lawyer asks.  The thought process goes something like this:

1.  I want to get the (any) client in the door.

2.  Everyone else gives a free initial consultation, I think?.

3.  I'm too afraid to charge for a consultation because the potential client won't come in.

4.  But my time is money.

5.  So, how much should I charge?

6.  No, I shouldn't charge for the consultation.

The dilemma is obvious. You want to get the potential client in the door but you also don't want to give your time away.

In my opinion, it all turns on where you are in the growth curve of your overall professional life and legal career.  Notice, I said, "legal career" not growth curve of your solo practice.

These are my opinions based upon my experience and others but they present a smorgasbord of options from which you can choose. Or please debate or add to the list.

As a new solo your goal is to get as many potential clients in the door as possible so you can practice your client interviewing skills as well as actually having the opportunity to have clients hire you.  Initially, you will not generally have many clients (unless you are a seasoned lawyer with hip-pocket business and are going solo). The real value and benefit in this approach when you first open your doors is not so much the exchange of dollars for time, but the opportunity to get clients into your office. Period.

You want as many chances as possible to practice these interviewing skills, polish your dialogue and get comfortable with discussing fees and collecting fees/retainers.  You also want to develop your radar for the unwanted clients, those clients who will drain your time, resources and your very soul.  You are also giving yourself an opportunity to canvas clients to find out how they heard about you, what they have heard about you and more importantly, are the clients who are coming to you the type of clients you want to service. This is the marketing aspect of the interviewing process which you need to perfect.

As a practicing solo developing your areas of concentration, depending upon the areas of law you are practicing, you may want to charge a consultation fee because;

1) as your knowledge grows, (or in your previous life you have twenty years of other professional experience) your 30 or 60 minutes with a client can be worth more than an inexperienced lawyer's three hours.  You impart more experiential value.

2) Sometimes potential clients are consulting with you to eliminate you as the lawyer for the opposing party because your reputation precedes you.  If you get eliminated without collecting money for your time it can be costly not to bill for the consultation. (For example, if you only represent men in the dissolution process, would you ever want to meet with a woman if they are just trying to conflict you out?  Why take $250 and be bumped out of a $15,000 retainer?) 

If you are now at a stage in your life where you are skilled in screening clients on the telephone and you have other options with your time, including billing out on another matter or a day at the beach with your child, you are at the stage where you can establish a real calculable 'value' for your time and should consider charging for that initial consultation.  

If you are at this point, you should consider using a different marketing tool.  Charge for your time with a catch.  If you are hired, the fee collected for the consultation is used against the intial retainer or flat fee.  Some will charge one hour at their normal hourly rate regardless of the actual length of the consultation so the client doesn't feel rushed.  Others will charge hour for hour.  Again, it is a personal choice. Potential clients now feel more invested in you with this leveraging tactic against the retainer.

Experienced solos with major reputations in their practice areas (except in contingency areas) generally will charge a fixed consultation fee for the consultation.  The consultation fee is never leveraged against the retainer.  These lawyers know the value of their knowledge and time and, most often, so does the client.  These lawyers are not worried that another lawyer is doing free consultations.

Fees for initial consultations, in my opinion, turn on experience, marketing strategy, and the norm for the practice area.  If you have a unique take on this common quandry, please share .

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Comments

Heather Sunderman

Thanks for a very balanced and informative article. A lot of the conventional wisdom in this area says that you should never give away your time. I agree with you that there are many factors to consider when making the decision. I would also add the factor of how much of your business is coming in from referrals. I find that people who have been referred by a past client or colleague are more than happy to pay a fee.
For myself, I started out with free initial consultations, and now I charge a flat fee for a consultation slightly lower than my hourly rate. At this point, I have business coming in the door and if I'm not getting paid, I'd rather spend the time with my daughter!

elguapo

I have been practicing 10 years and have been in solo practice for 5. I generally don't charge for initial consults.

I get most of my revenue from plaintiff's side contingent fee litigation. So my business model is to talk and meet with lots of people. Basically I'm combing through the rocks, looking for nuggets.

I'm not going to charge somebody $100 just to tell them they don't have a case. And I don't mind giving people free advice in exchange for the possibility of discovering that they have a lucrative claim and representing them.

The only exception is if I get the sense that somebody isn't serious about hiring me -- they are just looking to pump me for information. In that case, I tell them it will cost $100 to meet with me for an hour. And they disappear.

I think it's different if you do other kinds of work. For example, I don't think that landlord and tenant attorneys have any choice but to charge substantial consult fees. Otherwise they would be swamped consulting with people who aren't serious about hiring them.

Steve

Hi Susan,

Interesting and helpful post, thank you.

I have a related question: What do you think about charging for a preliminary case evaluation, with no guarantee of continued representation?

For example, consider an employment discrimination case.

Suppose you have an initial consultation (free or otherwise), and you decide that there might be something to the person's claim. However, there is no way an accurate case evaluation can be made, based solely on a 30-60 minute interview with the aggrieved party. Most discrimination plaintiffs are very poor judges of their own situations.

So my idea would be to accept the case for purposes of conducting a preliminary investigation, for a single reasonable fee. The investigation would include doing a few hours of basic legal research, looking at whatever documents are already in the client's possession, and interviewing one or two witnesses (identified by the client -- if they cannot identify any such persons, then their case is in trouble). The results would be presented in a written report/summary for the client. Perhaps 1-2 day's work. But then you would have a much better ability to evaluate the merits of the case, and to decide whether it makes sense to pursue 1-2 years of burdensome and risky litigation (the majority of employment discrimination claims lose). In addition, requiring a potential client to go through this process, and make an up-front investment in his or her claim, will help weed out those who are just complainers and are likely to be bad clients.

What do you think?

Susan Cartier Liebel

Steve,

I agree that in this scenario it would be a wise decision to charge for an evaluation of a potential client's case for many reasons:

First, this is beyond the scope of an initial consultation and is work product which serves two purposes:

1. If the client is truly vested in learning if his case has merit, he should be willing to invest some dollars to see if he is on the winning or losing side which will cost him valuable time and energies, including emotional capital. Also, with money invested, hopefully to be returned upon successful resolution, he is more inclined to stick around for the entire litigation, a scenario that is very real in employment cases when the client moves on and the lawyer is stuck with the case and an uncooperative or non-appearing client.

2. In order to be diligent, you need to be informed. If you can't give informed information because the potential case requires futher investigation, you need to research to see a) if there is a case and b) if it is a case you want or can handle?

If work goes beyond the initial consultation, unless you are a large firm with a fund just for this type of investigation in contingency matters and your gut tells you it's a winner but you just want to be sure, it is still a smart move for the client to be invested up front in the litigation, be willing to invest some dollars for your time, by first seeing if there really is a case. And if he is investing in your time for an evaluation, he's not asking every attorney on the street just to hear what he wants to hear even if there is no case.

The exception, the client is indigent and your gut tells you there is something there and you are willing to take on the cost of a preliminary investigation.

Great question.

James Hart

Great idea for a post Susan.

I guess I come from the school of thought that says, when they show up, bill 'em. When I first started my solo practice in 2005, I offered a free consultation. It quickly became apparent to me, however, that my days were spent doing free legal work, and the cases I did take on didn't pay very much.

In the long run, I took on too many cases for too little money. I'd much rather meet with fewer potential clients, partially qualify them with a consult fee, and collect a bigger retainer. I have a little son at home, and if I'm not getting paid, I'd rather spend time with him and my wife.

Additionally, most clients that can't pay a consult fee most certainly can't afford my initial retainer.

The only exception, of course, is contingency cases as the previous posters discuss.

Great Article!

Jim Hart
http://raleigh-divorce-lawyers.com

Kim D. Johnson

I have been practicing for over twenty years. In general I like to charge for consultations but the exceptions are many. If I get a referral from a former client I seldom charge because the person is generally sold when they walk in. Then the only questions are do I think they have a case and, if so, what is a reasonable retainer, and can they pay it. When people come in cold so to speak I generally try to size them up within the first few minutes of the consultation. If I feel they are pumping me for information or say things like " I don't care how much it costs...." I will immediately bring up money or stand up. Either way they are usually gone. On the other hand, if I feel the person is being sincere I will usually hear them out. If I can close the deal fine. If I can't, or they don't have a case, or no money I still try to close the meeting on good terms. Sometimes they remember me and come back later or refer others to me.

When I get cold calls over the phone and a person asks me one question after the other and tries to keep me on the phone I immediately invite them to come in and quote them a high retainer. Their parting words are usually " ok I'll get right back to you".

Thanks for posting on this topic.

JL

Interesting article. I'm a fairly new attorney who hung a shingle in '09. I have done a fair amount of landlord-tenant work and have found that it's a mistake not to charge for an initial consultation in this area of law. I have spent a lot of time on the phone and in person giving landlords and tenants free advice. Rarely do these people retain my services after they have pumped me for information.

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