Charging Fees for Initial Legal Consultations

Start Up Valuations | Andrew Abramowitz, PLLCWhen I start a new client relationship, the referral source introduces me to the potential client, usually by email, and then I have an initial call or meeting with the potential client. I don’t require that a fee be paid before I agree to proceed with this background consultation. It’s only after the meeting where we make engagement arrangements if there is a need to do so. Many attorneys, however, feel strongly that this is a bad policy and insist that even the initial meeting is on the clock. Of course, attorneys can feel free to set whatever ground rules they want, as long as they’re properly communicated in advance. There may be practice areas where immediate charging makes sense, but for what I do, I think this sort of policy reveals a mindset about the attorney that I try to avoid.

Attorneys who advocate charging for the consultation are concerned that the potential client is shopping around with various firms, looking for free advice. In most cases, whatever is discussed during a short meeting is not the sum total of the legal work needed by the potential client. I might spend a few minutes with an early stage company discussing the advantages and disadvantages of seeking venture capital versus equity crowdfunding, but the company still needs to engage an attorney to provide guidance throughout the process. But even for discrete legal matters where I’m providing for free the definitive and final answer, I would say: So what? What are you worried about? Is the potential client going to tell the world, “Hey everyone, call Abramowitz for your free corporate and securities legal needs!” No, the reality is that the person will likely be appreciative that you took out some time to help and will be inclined to use you on a paid basis, or recommend you to someone else, when the time for substantial legal work comes.

This fear that potential clients are freeloaders reveals a general lack of trust that, in my view, is not associated with success in business. If you proceed on the baseline assumption that the people you’re dealing with are trying to screw you, you will forego promising opportunities. I’m of course not advocating for blind trust, but there’s an appropriate level of scrutiny to apply to people who don’t give you a reason for distrust.