How to Talk About Money with Your Client and Avoid Awkwardness

How to Talk About Money with Your Client and Avoid Awkwardness

By Frederick Hertz. He is an attorney and mediator based in Oakland, has managed his practice for more than 25 years.

The older I get and the longer I practice law, the more I realize how difficult it is for most folks to converse rationally about money—lawyers included. It’s one thing to say, “talk to your client about fees.” It’s another thing altogether to actually do it in an effective manner. Here are some tips for tackling this touchy subject.

Do it in person. While you can deliver “information” by email or on the phone, it is nearly impossible to have a meaningful exchange about a difficult topic other than in person. The reason is simple: a substantial portion of any communication is non-verbal in nature, and you can’t read body language or gauge understanding unless you can see the person you are talking to. Also, the risk of offending someone is just too great unless you can pace your presentation appropriately, which you can only do face-to-face.

Know who you are talking to. I always start out my intake by asking my client to tell me about their working life and education. I tell them that I want to get to know them, apart from the legal task we are focused on, and they always appreciate telling me a bit about themselves. But the real reason I’m asking is so I can package my presentation about my legal work using terms and concepts they understand. If they work in retail, I talk about pricing and packaging; if they are in social work, I talk about the service delivery aspects. And I shift the level of complexity based upon my best hunch of their capacity to take in information.

Show it, don’t just say it. Whenever the matter is complicated, I take out a piece of paper and write out the basic fee-related terms. If litigation is involved, I draw a timeline showing how the different stages of litigation play out and what fees are likely to be incurred. I typically will list the basic tasks, with a range of hours involved in each one, and then add up the high and low totals to provide the best estimate of likely fees. Sometimes I give my client these notes, but I always use them when I sit down to draft the retainer letter.

Don’t be ashamed of your fees. It’s vitally important that you not minimize the expected fees, or convey that there is something wrong with charging what you charge. I have it relatively easy because my work focuses on situations that are voluntary (i.e. premarital agreements and real purchases), and most of my clients are fairly well-off financially. And even when it comes to divorces, the conflicts they are facing are the result of actions they took. They weren’t victims of another person’s wrongful conduct. It’s harder when you are meeting with a lower-income client who is in a disastrous situation. But even then, it’s not helpful to be embarrassed about your fees. You get to decide who is going to be your pro bono client, and if this is a paying client, you shouldn’t express ambivalence about what you are charging.

Listen to your client. Little is gained by having your client sign a fee agreement they can’t honor. If your client truly cannot afford your services you need to know that at the outset, rather than after you have devoted months of your precious time to their case. As I have said on many occasions, angry non-paying clients are not my chosen pro bono clients! I donate time to low-income artists, to bar association and court-sponsored mediation clients, and to a wide variety of non-profit associations. When it comes to my fee-generating work, I need to be paid in order for me to pay my bills and save for my retirement. If potential clients cannot afford to pay me and do not qualify for pro bono services, I would rather reduce the amount of work I will do for them, or send them to someone else.

Resolve your own issues about money. This is perhaps the most difficult task. You can’t be clear in your communications about money if you aren’t aware of your own issues. I’ve worked with many lawyers on this topic, and many of them have deep-seated anxieties about the financial aspects of their practice. For some it’s an issue of not feeling they deserve the high fees they charge. For others, it is a basic difficulty with complex math and budgeting tasks. And for others it’s a fear that if they talk too much about money, clients will feel resentful of the burden of the fees. These are all real fears, and they need to be processed and integrated into a healthy approach to asking clients to pay their bills.

One of the reasons clients are hiring you as their lawyer is that they believe that you are competent, comfortable with financial negotiations, and able to express your point of view directly and reasonably. Don’t disappoint them in your first interactions!


See Also

The Pros and Cons of Client Proffer Letters: Should You Talk to the Government? (16)
What to Do When Your Client’s COO Becomes Your Competitor’s BFF (13.8)
Embezzlement—When “Borrowing” Someone Else’s Money is a Crime (13.5)
If I had any money, I wouldn’t need to come see you to file bankruptcy. Wrong! (13.2)
More On Asset Sales And The Attorney-Client Privilege (12.5)
Changes to the UKs Client Asset Source Book (CASS) –Harder, Better, Faster, Stronger (12.3)
To Avoid in Websites for Lawyers (12)
12 Client Development Actions You Can Take if You Don’t Know Where to Start (11.9)
What’s the best way for lawyers to use social media? (11.6)
Art of Getting Paid (11.6)
How Much Do You Deserve to Be Paid? (11.2)
Financial fraud & your money – Bank fines are costing us! (11.1)
A&O takes lead as Virgin Money looks to cash in with IPO (11.1)
UK Finalizes Post-Lehman, MF Global Client Asset Rule Fixes (11)
East meets West – assessing Asia’s performance in the Client Satisfaction Report (11)
How to Predict Client Portability (10.8)
Anti-Money Laundering: Italian Competent Authorities Issue Clarification on the Duty of Restitution of Money/Securities to Customers for Whom the Due Diligence Cannot be Carried Out (10.8)
Investing in the future with client care. A Lawyer´ strategy (10.7)
More margin through marketing (10.6)
CC adds seven more charities to client-level pro bono scheme (10.6)
Assessing the Client Bonds of Lateral Candidates (10.5)
Money Laundering in the News: Los Angeles Fashion District Raid Puts Trade-Based Money Laundering and Black Market Peso Exchange in Spotlight (10.4)
White & Case loan deal grants Citibank rights to all client fees (10.4)
Assessing the Client Bonds of Lateral Candidates (10.3)
More Friday Poetry: This Time on Client Development (10.2)
How much money can I keep in my checking account when filing bankruptcy? (10.2)
FTC Advisory Opinion Supports Money Transmitters’ Proposed Information Exchange (10.2)
More Friday Poetry: This Time on Client Development (10.2)
Lawyers: Here are 10 Easy Client Development Tips (10.1)