Should The Client Pay?

One of my favorite bloggers is Patrick Lamb over at the In Search Of Perfect Client Service blog. Pat has a great post on whether a client should have to pay a legal fee that is over the discussed budget. Here is his post:

"Here was the exchange. I asked this question: Should a client have the right to approve a course of conduct that will cause fees to exceed an agreed upon budget? I was shocked by some of the answers I heard. More than half the lawyers who answered me said that the client should simply pay the bill if the work was properly done. More than half!!!! Client "Miranda" warning number 1: You have the right to approve a course of conduct that will cost you money! And corollary number 1: If I forget to ask your permission to do something that costs you money, you have the right to not pay me. That’s right, if a lawyer exceeds a budget for a task or a time period without telling the client it is about to happen and discussing the best way to handle the situation, the lawyer ought not be paid."

Pat makes the great point that lawyers must have learned not only to give budgets to their clients but lived by them. He correctly notes that there is no excuse for exceeding a budget. I could not agree more. More importantly, I think that lawyers should provide budgets to their clients. Most traditional law firms would wince at the very thought of telling a client what the maximum fee will be on a particular project. Of course, the traditional hourly billing firm is designed to simply accomplish four important goals:

1. Sign up the client before they have a chance to go down the block to another attorney;
2. Get as much up front retainer money as they possibly can;
3. Bilk as much money out of the client as possible until they have no more to pay; and
4. Find a way to force the client to resolve the client to resolve the case once they run out of money and irrespective of whether they accomplished anything at all.

I have worked for both innovative hourly billing firms and, what I refer to as, traditional hourly billing firms. Some traditional hourly billing firms have no shame when it comes to bleeding their clients dry of money. One of the great hourly billing firms I worked for previously was in the automotive product liability defense niche. The managing partner of that particular firm constantly quoted flat fees, accepted risk on hourly billing cases, and worked strictly within budgets. And this was back in the early 1990’s. He was a true innovator. He gave law firms and our profession a "good name."

Nice post Patrick. Keep up the great work!