Discussing fees with a client is often one of the most stressful parts of a solicitor’s job. Social taboos around talking about money run deep; studies have consistently shown that personal finances rank high on the list of topics people find it hardest to talk about. Yet they have also shown links between reluctance to talk about money and the risk of falling into financial hardship. Getting these conversations right can protect you from challenges, and protects your client from falling into financial difficulty.
This is the third blog in a series covering various aspects of solicitor / own client relationships. You can find the other blogs here:-
Avoiding Challenges to your Costs I: Invoicing Clients
Avoiding Challenges to your Costs II: What is an Invoice
Avoiding Challenges to your Costs IV: Time Recording
When it comes to money, being proactive is key. Providing an early and accurate estimate of costs will enable your client to plan ahead and avoid difficult conversations later. You should also keep your client informed as the case progresses, and schedule regular updates to ensure that you are on track and the client is informed. If things change, update the client as soon as possible and explain what this means in relation to costs.
An accurate estimate helps your client understand what costs you are likely to incur and also allows them to plan the litigation. A client is far less likely to dispute your fees if they had a good idea of what it would cost in advance. And if they do dispute your fee, you can refer to the estimate and point out that they knew the cost when they authorised the work. If you have exceeded the estimate, you will be able to explain why the work done went beyond its scope.
Preparing an Estimate
Preparing an estimate can seem daunting, but following these simple rules will make estimates easy:-
- Estimates should not be generic
- Plan the case and how much time each element will take, e.g:-
| Pre-Action | ||
| Review client documents | 4 hours | £400 |
| Letter of Claim | 2 hours | £200 |
| Advice and correspondence with client | 6 hours | £600 |
- Be realistic about the time you will spend. We tend to underestimate how long things will take. Bear that in mind.
- Do not overthink it. Include anything you think is likely to happen, but do not try to estimate for every eventuality.
- Factor in disbursements, such as court fees, counsel’s fees and experts’ fees
Communicating with the Client
One fear lawyers have is that they will “scare off” clients if the estimate is too high. However, most clients will appreciate transparency on fees. And if they are unwilling or unable to pay, it is better to know before you do the work. There is no benefit to you in obtaining work which is not profitable.
Once you have provided the estimate to the client, make sure that you give regular fee updates. For example, using the example estimate above when you send the letter of claim to your client you might include a sentence saying “I confirm that our unbilled fees to date total £xxx” and either confirm that this is below your estimate, or explain why it is above your estimate. If your client later questions your fees you will be able to refer them to your letter where you told them the level of your fees.
Conclusion
By preparing an estimate and updating your client about fees you avoid difficult conversations about fees at the end of the matter. If your client later disputes your fees you are in a strong position to resist any reductions because you can argue that they continued to instruct you in full knowledge of what the fees were. An estimate is a powerful tool in ensuring recovery of your own fees, and also in enabling your client to manage their finances.
You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com.
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