I knew better and that only makes this worse. Recently, I needed a lawyer to review an agreement. There was some vague language that made me anxious. So I called an old friend who recommended one of the partners at his big firm. The partner gave me good advice, spotted an issue I hadn’t considered, re-drafted a couple clauses, and left me feeling reassured. The problem went away.
This was valuable work and I was happy to pay for it. From the beginning, I knew roughly what this matter was worth to me. But instead of operating that way—buying what I actually wanted and needed—I agreed, stupidly, to buy some of the lawyer’s time. I didn’t want his time; I wanted his judgment, opinion, and guidance. Instead I bought a formula for disappointment.
When I received his bill it became clear to me that I should have insisted on a flat fee arrangement. Broken into tenth-of-an-hour increments, the bill showed me what the lawyer had done to reach his conclusions. There was time for research, writing, conferring, and meeting. It served as an odd invitation to think about his work habits and efficiency, matters that were of little moment to me. At some level I wondered why he was telling me all this. The problem wasn’t that the price was horribly out of line but rather that it distracted me for what he had accomplished. He helped me reach a good conclusion and yet here I am, weeks later, still grumbling.
This isn’t a good way to build a relationship.
A few examples:
- Paying for blather. During one of our first long talks, the lawyer went on for nearly an hour discussing the law governing my issue. I wasn’t interested in the law; I was interested in his opinion of my situation. But instead of getting to the point, he wandered through an explanation of the disagreements between the intermediate level New York appellate courts. I assumed that he hadn’t prepared for the call and was talking himself through the problem as he went. When he got to the application of the Statute of Frauds, I began to chuckle. I hadn’t thought about it in almost 40 years and it brought back a nanosecond of nostalgia for my youth. But I let it go because I figured this must be how he worked: perhaps he was trying to impress me, needlessly, with his knowledge. By the end of our talk he was closing in on his opinion and that’s what I wanted. Comes now the bill and, blimey, he had billed me for both the pre-call research and mulling he evidently had done, and for the meandering call itself.
- Meet my partner. He spotted a tax issue that worried him and wanted to probe it. Okay, I said. What I didn’t know was that he would bring in another partner to advise him on the issue. And sure enough the other partner billed me for his time consulting with my lawyer. But these two didn’t agree on how much time they’d spent conferring with each other—or one decided to just round up. As a result, they billed me for different length conversations with each other!
- Happy New Year. We began our engagement in 2014 and ended in 2015. What happened on New Year’s Day? His hourly rate increased. When did I find out? When his bill arrived.
- The good part: I don’t think he billed me for reading the emails I sent him asking for when he’d again turn to my problem or his note of apology for being distracted by other tasks.
There’s a bigger idea here than one more cranky client with access to a keyboard blowing off steam. Why does a bill have to be a labored document, one that reeks of justification of past behavior? Unless the lawyer gets around to writing a thank-you—and we know that is a seldom event—the bill is too often the final communication between trusted advisor and served client. It is now customary to have it expressed in six-minute segments, with all the charm of a blood test and none of the warmth or good humor.
Wouldn’t it be more sensible and effective to treat this bill as a summary document, a necessary part of a continuing relationship? Yes, of course, you want the damn money paid. But this is also an opportunity to remind the client of the goals set out, the efforts made to reach them, the clever and skillful approaches taken, and the results that were reached. Imagine: a bill that reviewed the matter and its importance, emphasized value delivered and risks avoided, and spoke in terms of shared efforts.
This would require lawyers to know and understand their clients’ aspirations and to keep track of them as fervently as they currently monitor their time. That’s possible. But it’s harder when the coin of the realm is the six-minute segment rather than some effort to charge based on how much the client values the matter at hand.
One more time: Clients don’t want to buy your time. They want to buy answers and advice, guidance, and solutions, based on your judgment, knowledge, and courage. Maybe you can’t sell it to them. Maybe they won’t buy it when it’s offered that way. But if nothing else, the system of billing can speak the language of value delivered to a client who is in need.
Looking for a differentiator? Try billing smarter.
Hey, Aric – it’s wonderful to read your great prose again and enjoy your thoughts. I know you never left, but welcome back anyway. 🙂
As to your post: you’re now in the privileged position to visit the client’s view of LawLand – Remember when we sat down around the time that ACC was contemplating launching the Value Challenge? It seemed our entire conversation focused on skepticism about the value or viability of business models and fee protocols for firms other than hours X rates. Now, it seems we can’t imagine how firms can continue to drive that dysfunctional model: they must continue to enjoy the cooperation of clients who, as graduates of the law firms they retain, have little appetite or will to make the hard changes necessary to drag legal practice into the 21st century.
You end on a note of differentiation: I’d love to hear more about your ideas for meaningful differentiation as firms seek to deliver value, regardless of what kind of billing model or fee structure they propose … so many of the differentiators that are relevant to firms are irrelevant to the clients to whom they want to sell services.