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    Wisconsin Lawyer
    July 24, 2017

    Why Lawyers Should Say No to ‘No Charge’ Invoice items

    What do clients really think of the no charge (as opposed to what lawyers think clients think about no charges)?

    Carolyn Elefant

    lawyers work on computer

    Ask any seasoned lawyer or marketing expert for their favorite tip on best practices for billing, and most likely, they’ll say it’s the “no charge.” Essentially, a “no charge” is an entry on an invoice that describes the work that’s been done for the client, but that the attorney has decided not to charge for.

    Why Lawyers Use a ‘No Charge’

    Why would lawyers use a “no charge”? Basically, to make themselves appear generous by waiving the cost for something they ought never have billed for to begin with – and making sure that the client knows it.

    Carolyn ElefantCarolyn Elefant operates the Law Offices of Carolyn Elefant PLLC in Washington, D.C. She is a frequent blogger and presenter on solo and small firm practice issues. This article originally appeared in Above the Law; used with permission.

    Think I’m joking? The proponents of the no charge actually boast about this practice.

    For example, Stephen Fairley, a “rainmaking” guru for lawyers, had this to say about the “no charge” at LEXIS’ Business of Law Blog:

    “Include ‘No Charge’ line items on your bills. Just about every lawyer does stuff for his or her clients that aren’t billed. Keep a list of those freebies as you go through your month and then include them as line items on your bill with the notation, ‘No Charge.’ Instant added value! Genius!”

    Of course, what Fairley may not comprehend is that there’s one tiny reason that lawyers often don’t charge for everything they do for clients – it’s called “ethics.” Imagine an invoice that contains a line item: Breathing – 1.7 hours – $410. Not likely to pass muster by a grievance committee. But no charging for something that wasn’t billable to begin with isn’t any more ethical in my view. To the contrary, it’s a deceptive practice.

    Still – it’s one thing for legal marketers – who often aren’t well versed in ethics – to endorse the no charge. Shockingly, many lawyers rave about it also. Take a look at the advice from this Houston Bar Association presentation:

    “Invoice everything! You should treat your clients fairly. If you make a very short call which you determine was so short you should not charge for it, bill it and then ‘no-charge’ it on the client’s invoice. This buys you goodwill and lets your client know that you are being fair. Clients cannot help but like seeing the ‘no charge’ items on their invoices. I like entering them just to mark them ‘no charge,’ to show the client how nice and understanding I am when I invoice.”

    I don’t know who this presenter represents, but I can tell you that I wouldn’t feel much goodwill toward a lawyer who no charged for a three-minute call. Instead, I’d wonder why the lawyer even contemplated charging for it to begin with – and whether the lawyer would always no charge for short calls, or only when having a good day.

    Apparently, the “no charge” is a practice that is largely limited to lawyers. But one former attorney likes the no charge practice so much that the attorney wrote a post encouraging freelancers to adopt it as well:

    “That said, just because you aren’t charging for something doesn’t mean you have to let it go unnoticed. Let’s say you spent an hour on a phone call, convincing a client to hire you – your bill could look something like this:

    ‘Initial phone call discussing scope of client’s project (No charge); Review of company’s current protocols (0.8 hours).’

    “See what you did there? You turned time you couldn’t charge for into a happy little note.”

    Not quite sure why a client would be happy to learn that their lawyer had planned to bill them for time spent pitching their services but decided against it at the last minute – I certainly wouldn’t feel that way.

    ‘No Charge’ Is Deceptive

    As you might already guess from my running commentary, I can’t stand no charges. If you’ve done work that isn’t worth billing for, then don’t put it on the invoice to begin with. In some instances too, the no charge is like a cruel joke. Imagine an invoice with 25 line items totaling $12,398.25 and a “Phoned client and left voice mail – NC.” Is that really going to make the client feel any better?

    As I mentioned earlier, no charges are also deceptive. There are some costs like overhead that lawyers are ethically prohibited from charging to clients while others – like the cost of correcting a mistake – that shouldn’t be billed as a matter of courtesy. Including those items and not charging for them makes clients believe that they’re saving money on work that they should never have paid for to begin with. Some regulators have already determined that discounts and “special deals” are misleading when the prices are no different from what the lawyer would ordinarily charge. So I’m not sure why a no charge – which in many instances yields the same fee as the lawyer could charge anyway – gets a pass.

    What Clients Really Think

    But what do clients really think of the no charge? (As opposed to what lawyers think clients think about no charges.) If Specialty Restaurants Corp. (Orange County, Calif.) general counsel Francis Drelling’s opinion is indicative, the answer is “not much.” Drelling writes:

    “Personally, I have had counsel tell me that there will be no charge for such and such only to later see a small, or not so small, charge for it. Obviously, that is not a good way to market your services.

    “As to the counsels who do keep their promises, there are two basic schools of thought. One says put it on the invoice with a ‘no charge’ indicator adjacent to it. The other school says to leave it off the bill altogether. Personally, my preference is that it not be listed on the invoice. Why?

    “Reviewing invoices always causes me to think about how I am expending corporate resources and how my executive team would prefer those assets be operationally, and not legally, deployed. So, it is better if I see fewer entries, as this conveys to me that the matter is being efficiently handled. Besides, I always remember the professionalism of the ‘no charge’ maneuver.”

    Bottom line: if clients say no to no charges, that’s reason enough for lawyers to do the same.

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