Methods of Client Engagement to Build Better Client Relationships

The client engagement process, if client centered, can be a positive experience. Establishing both client and attorney expectations can lead to better relationships. Avoiding surprises will build trust rather than animosity. The focus of client engagement is on the two most sensitive issues-money and invoicing procedures.

This article discusses

 

• establishing new client policies of engagement.
• setting the business tone of the client relationship that works best for both client and attorney.
• simple techniques to avoid later billing disputes.

If there is one issue that causes the most stress among attorneys and clients alike, it is money. Attorneys send invoices that ask for it and clients are expected to pay the invoices promptly. It doesn't always work out that way. Here's a case history of an attorney who had cash flow problems and how she was able to handle them.

The attorney had a high proportion of clients who were slow to pay the bills sent them. Both monthly statements and trust account balances often seemed to be ignored by clients. Finally, in desperation, she asked one of her clients about the problem.

While this client was one of those slow to pay and who had not kept a trust account at a satisfactory level, the person was a longtime acquaintance and the attorney felt comfortable asking him this.

The client said he didn't see any reason to pay monthly since the matter was going to take several months to complete. Further, he thought the trust ac count statement merely reflected funds which were deposited on his behalf when received by the attorney, but he assumed they were sent from the other party in the transaction.

The attorney realized that she had taken for granted a client understanding her billing practices. She had never clearly established what her expectations were or asked clients what theirs might be.

Establishing Policies with New Clients

Misunderstandings regarding attorney billing practices are all too frequent. In most cases, it is because the client does not receive an adequate explanation of all the terms of engagement. Why? Many attorneys are very reluctant to discuss payment conditions with clients, especially new clients. Too many attorneys are interested in getting the client in the door at all costs. After the new client and the attorney discuss in some detail the specific problem which needs attention, the attorney must quote or at least paraphrase his or her understanding of the client's need and ask for the client's confirmation.

If the attorney and client have the requisite mutual understanding, it is then time to formalize the relationship. The attorney needs to come to a verbal understanding with the client regarding the client's spending limits or at least a range of costs. Probable causes of cost variables must be specifically identified.

The basis for costs needs to be outlined in some detail. The attorney should start with the lead attorney's hourly rate. This should be followed by an explanation of the probable roles of other attorneys or staff involvement and related costs. If outsiders, such as researchers, investigators, or accountants, become necessary, the attorney should explain their roles and the effect on costs.

If the attorney chooses an alternative billing method other than hourly rates, the total fees and expenses should be discussed and agreed upon. If there is more than one possible figure, such as possible shared contingency or other arrangement, it needs to be specifically spelled out.

The frequency or intervals of billing options should be discussed next, with regard to the matter at hand. Many clients prefer to be billed on a regular monthly basis and appreciate the receipt of a statement well before the tenth of the month in order to calculate their payables due for the month. Other billing interval options are possible, including, although not used very often, a one-time billing. The attorney and client must agree which option is appropriate and make sure that agreement is clearly understood by both.

The attorney should review the billing format options available to the client. For example, some clients prefer detailed bills and want to know the amount of time, by attorney, expended in any given activity. Other clients only care about the total expenditure in a given billing period.

The client must understand how much advance retainer is required, if any, to initiate work. If the attorney requires trust account deposits to cover anticipated expenses or to maintain a balance to cover fees, he or she must explain this to the client during the engagement process. Often, less sophisticated clients do not understand the significance of a trust account. All of the applicable conditions must be committed to writing by the attorney on a standardized form or in a personal letter to the client. Finally, the attorney should review the written conditions one last time with the client before work commences. This is particularly important for new clients but also important for existing clients.