I was a way for a few days getting some much needed R&R this past week and as is typical I experienced a business lesson which translates to solo practice. It is a pet peeve of mine – being nickel and dimed to death.
My husband and I were on our way home and decided to stop for lunch. We didn’t want anything fancy, just quick and good and stopped at a cafe. We knew we would pay for convenience as they offered a myriad of fresh and unusual sandwiches and wraps and when we saw this menu, while a little pricey, we expected it would be good and looked forward to the meal. The place was a little trendy, the ambiance comfortable. We ordered two wraps, a hot apple cider and a coffee roll. All I wanted to drink was a cup of tap water. My husband paid with a credit card.
For some reason I decided to check the receipt as we waited for our food. I saw ‘comp’ for $.30 and ‘conv’ for $.50. While it was less than a dollar I was curious what it was so I asked the cashier. She told me, ‘$.30 for a cup of tap water and $.50 to swipe a credit card. I was incredulous. All of a sudden the ambiance wasn’t so nice, the food would not taste as delicious because I was annoyed. What was this nickel and diming on top of an already expensive pricetag for the food? Since when does a restaurant charge for tap water and for swiping your credit card?
It doesn’t matter it was under a dollar. This isn’t about ‘cheapness’ on my part or the rationale on their part for charging these fees. This is about poor handling of questionable/discretionary fees and the impact it has on those having to pay them. The result of these unexplained charges? I no longer felt good about the place. I certainly would not recommend it or if asked about it I would highlight their extra fees for things which should not be charged. These fees felt awful and cheesy and made me feel as if money, not the customer, came first. Also, these fees were never communicated to me thereby giving me the option to pay with cash or the choice to pay for a beverage I actually wouldn’t mind paying for. It sent the wrong message and in doing so impacted the brand and image of the cafe in a negative way. Even if the food was good, it was no longer worth the price considering there are a number of good restaurants available and without these fees carved out and in your face.
Most law firms still utilize the billable hour model. Many law firms still charge for absolutely everything, every paperclip, a single copy, a message on an answering machine which says, ‘I’m returning your call’ and everything else a client would expect to be incorporated in the hourly rate. It is the nickel and diming philosophy which has created a very sour taste in the mouths of most clients. No matter the result (or delicious the food) it is the idea that as lawyers we have to charge for everything. It is off-putting and creates a negative and unspoken tension between client and lawyer and can impact the client paying your bill in a timely manner.
Normally this ‘right’ to charge for everything and anything is outlined very clearly in a retainer. Yet, I wonder if most clients really expect to see this ‘right to charge’ exercised. And when the bill reflects these fees how much of your ‘brand’ is chipped away each and every time?
Yet others indicate on their bills the ‘right to charge’ and include the N/C (no charge) symbol next to a discretionary event or service just to let the client know the lawyer had the ‘right to charge’ but opted not to.
It is my opinion that standard and customary costs for performing legal services should be folded into the hourly rate or a one time ‘administrative fee’ which covers copies, faxes, postage, etc. Any extraordinary costs like excessive copying or overnight deliveries should be billed separately and explained as an extraordinary expense outside the scope of the hourly rate or retainer. Some would even argue special deliveries should not even be charged.
Nickel and diming clients is a sure way to make sure the client never returns. Nickel and diming clients is a sure way to get talked about by your clients and not in a positive light. Nickel and diming simply because you have the right to per your retainer does not mean it is a right you should exercise unless you are protecting yourself in the event you have to sue for fees.
What is your philosophy? Are there limits or rules within your practice area which require you to parse out each and every cost? And if so, how do you handle it so as not to alienate your client?