Lawyers, particularly those new to the practice, often wonder whether they should be charging an initial consultation fee. The dilemma is obvious: lawyers want to get new clients in the door but, at the same time, also want to be paid for their services.
For many clients, the consultation is perhaps one of the most valuable services lawyers offer. Unfortunately, people often mistakenly think of the initial consultation as a “kick at the tire” or an opportunity to find out how much the lawyer is going to cost. But for many lawyers, the consultation is much more than the lawyer simply trying to sell his or her service. It’s an opportunity for the client to ask questions and get a professional legal opinion about the merits of his or her case. By advising the client during the consultation, the lawyer is working and providing a valuable service. Further, as the lawyer’s experience increases, so does the value of their advice.
There are no hard and fast rules for determining whether or not to charge clients for initial consultations. That being said, some of the factors to consider in deciding whether to charge a fee include experience and current workload, the area of law practised, the practice of other lawyers/firms practising in the same area, and the target client base.
For some practice areas, the question is already answered. For instance, for the lawyer practising personal injury litigation who bills primarily on a contingency fee basis, charging a consultation fee is inconsistent with the arrangement of only charging upon successful completion of the litigation. The consultation fee may also be counter-productive, particularly if all of the other lawyers in the community practising in the same area offer free initial consults. On the other hand, not following that practice by charging a reasonable consultation fee may also help to distinguish a lawyer from others in the field.
Charging an initial consultation fee may also be inappropriate or counter-productive for the lawyer whose fees come primarily from legal aid.
For lawyers whose work is primarily charged out at an hourly rate or flat fee basis, the free consultation is certainly an option. On the other hand, if the lawyer is experienced and already has a busy practice, the free initial consultation may make less sense from both a professional, practical, and business point of view. Some of the reasons why these lawyers may choose to charge a fee include the following:
1. The consultation fee can help manage client expectations by setting the tone with potential clients that the lawyer’s time is valuable and that his or her advice is worthwhile.
2. The fact a client is willing to pay the consultation fee may be an indication from the start that the client takes the matter seriously and is prepared to invest in it.
3. If a client is unwilling or unable to pay the consultation fee, the odds are he or she will also not be willing or able to pay the retainer. In my experience, clients paying for the initial consultation are more likely to retain the consulting lawyer after the first meeting.
4. Charging a fee helps eliminate those whose sole purpose is fishing for free advice. Over the years, I have come across people who have made their rounds through the local firms seeking free advice with no intention of ever retaining counsel.
5. Oftentimes, lawyers will have a friend/colleague who regularly sends you bad referrals or referrals where the client is looking for a “good deal.” The consultation fee can help weed out these clients without offending or discouraging your referral source. The consultation fee can also serve to clarify the client’s fee expectation from the beginning.
6. Over a period, free initial consultations can add up to a significant loss in potential revenue. For the practitioner who charges out at the hourly rate of $250, and does two free one-hour consultations per week, the potential value of them over the year is as much as $26,000 per lawyer.
7. Charging for the consultation discourages those who seek a consultation with a firm for the specific purpose of conflicting a particular lawyer or their firm from acting for the opposing party. Prior to initiating a consultation fee at my firm, I found that this practice of deliberately conflicting out a firm happened far more than one might expect. Some of the clients were actually blatant about their purpose. Since implementing the consultation fee, I have noticed a significant decline in the number of times this occurs.
The other issue that often arises for those implementing a consultation fee is how much to charge. Again, there are no hard and fast rules other than the fee should be reasonable and reflective of the value of the service being offered.
For those who are leaning toward charging for the initial consultation but are concerned about how this might discourage potential clients from seeking their services, one option to consider is offering prospective clients a credit off their first bill equal to the initial consultation fee once the client has retained your services. In this way, the consultation is as free for those who ultimately hire their lawyer.
Whatever the arrangement, the experience of most lawyers as well as support staff who I have spoken to is that, for the most part, clients calling in for an initial consultation are not usually dissuaded by the request for a consultation fee.
As for the process of setting up the initial consultation, I typically leave that matter to my staff. Prior to the consult, my staff are charged with the task of running the conflict check, advising the client of what they can expect to happen during the meeting including how long it will last, and notifying the client of the fee and ensuring it is paid prior to the consultation. This allows the lawyers to get to work as soon as the potential client is in. From the client’s perspective, this is also a good thing as the lawyer is quickly able to cut to the chase and do what he or she is being paid to do — answer questions and provide advice.
Of course, whether the client is paying for the consultation or not, they expect and deserve good value from their consultation. One way to achieve this is to show respect and demonstrate your experience. At my firm, the initial consultation usually lasts an hour and consists of getting the facts, assessing the client’s needs or concerns, reviewing the relevant laws and offering preliminary advice, answering questions, and explaining the process and how we can assist the client to effectively work their way through that process. When possible, we also provide our best approximation of how long the case might be expected to take and how future fees will be charged.
In conclusion, for many lawyers, the consultation fee can make good business sense. Practically speaking, consultation fees can also improve the quality of a lawyer’s practice by helping to weed out those clients who are fishing for free advice or using the consultation for the purpose of conflicting a lawyer from acting for the opposing party. Moreover, the consultation fee can be an effective tool for managing client expectations about the cost of legal services. Professionally, consultation fees serve by sending a signal to users of lawyers’ services about the value of our their knowledge and the advice they provide.
