Guest post by Mark Beesley , chair of Lime Solicitors and Corclaim – part of Shakespeare Martineau
There are valuable lessons for lawyers in Lloyds Bank’s current “the M-word” advertising campaign, highlighting how people avoid conversations about money because it makes them feel awkward. This is not just an issue in people’s personal lives; many professionals feel just as uncomfortable.
How many lawyers can honestly say they enjoy talking to clients about their legal bills? How often have you seen a client react negatively to a bill purely because they weren’t forewarned it was coming, or what it was going to look like?
And how often do you hear lawyers answer the perfectly reasonable question “how much is this going to cost?” with a fumbling and feeble “well, it’s impossible to say at the outset… it depends on so many variables”. That’s before we even get on to the debate whether billable hours are a sensible metric at all in the modern business world.
A change brought about by the Solicitors Regulation Authority last year goes some way in addressing this awkwardness and general lack of transparency around pricing. The new rules around transparency in price and service apply to a range of legal services, including residential conveyancing, probate, road traffic offences, and for business customers, employment tribunal claims (unfair/wrongful dismissal) and debt recovery (up to £100,000). These new rules require firms offering these services to publish pricing on their website.
This was a step in the right direction in improving transparency, but generally lawyers still need to get a lot better at talking about money. Ask any client (it’s good practice to do this regularly, if you don’t already) and they’ll tell you what they need from conversations about legal bills is clarity and certainty.
Tesco isn’t embarrassed to talk about the cost of its fruit or veg. So why do lawyers find this straight-talking so hard?
Ah, but it’s far trickier to price services than products, I hear you say. From one lawyer to another, and from experience, let me say this: lawyers should be able to do their own risk assessment. You can build in some flexibility as clients are realistic enough to understand lawyers can’t predict the unpredictable.
So, provide a range, explaining the time-cost will be somewhere between X and Y depending on a couple of unknowns, then offer to fix the cost in the middle.
I’m also a firm believer that the same message delivered in different ways can have contrasting outcomes: if you’re apologetic as you discuss costs, the client will naturally think you’re opening a negotiation. But if you state confidentially “the time-cost is going to be between £3,000 and £5,000 depending what we uncover, so how about we fix the cost at £4,000”, they will immediately feel they are getting a bargain and will be more inclined to accept your figure. It’s great for goodwill too.
And what of that classic scenario that lawyers fear, that once into the job you unearth some horrors which means the task is going to be more involved and complex than you initially thought? Are you now hamstrung by your original quote?
Again, the answer is communication: talk to your client at the point you realise the job has changed. Explain why and give the client options. Do they want you to carry on in the same vein as before and accept the uplift to the original quote? Do they want you to contain the work and keep it within budget? Or does what you’ve found mean the transaction is no longer as valuable to the client, so do they want to cut the job short?
The key is to have the conversation promptly, as soon as you realise the change, and give the client control as to how you play it going forward. The worst thing you can do in this scenario is hide the truth from the client then surprise them with a bigger bill later. Clients do not like these sorts of surprises.
Now here’s a radical idea: if a job actually comes in cheaper than your estimate, tell the client, explaining you were able to contain certain issues more tightly than you thought so the work was less, and offer to discount your bill accordingly.
Unsurprisingly this goes down very well. It’s a valuable tactic especially with long-term clients, where relationship is everything. Moreover, this tactic builds trust, so when you need to have the conversation the other way around, i.e. to say a job has turned out to be a little more involved so the budget might need to stretch, your client will be more willing to accommodate this.
Many expect the SRA rules around price transparency to be extended to cover other legal services so it’s worth all lawyers thinking more about communication – let’s start talking about money!