11 Aug Value agreements?

Costs agreements and disclosure notices are hideous documents, aren’t they?

Is it any wonder clients don’t read them – 17 pages of arse-covering legalese with a few nasty dollar signs hidden somewhere on p7!  It’s not all the solicitors’ fault – costs disclosure is of course a regulatory requirement – but from a client’s perspective most costs documentation from solicitors can be frustrating and annoying.

There are various issues:

• too long
• too generic (off-the-shelf) – with minimal clarity as to the work being done or tailoring to the needs of individual clients
• too complicated / inaccessible
• legalese
• no choice or collaboration – or even an invitation to re-craft or collaborate. Most costs agreements are presented as a ‘take-it-or-leave-it’ offer.
• either repetition or internal inconsistencies are commonplace

 

All the above are bad enough, and we haven’t even got to the real problem

The biggest problem for me is that there is nothing in it for the client. No value. No benefits. Nothing to justify the costs or fees being charged. Most solicitor costs documentation is almost entirely negative from the client’s perspective.

On one side of the equation, there’s costs – and that’s it! There’s nothing to balance the deal. There’s almost no information that will enable a client to assess whether they are receiving good value for money, let alone to sell the deal or persuade them that they are getting good value for money.

If you are a solicitor, take a look at your own costs agreements. Can you see the value clearly articulated?  Can you honestly expect your clients to look at these and say “Yes, this is a good deal! I can see what I’m getting for my money and I’m happy to pay” ?

Most solicitor costs documentation contributes to the problem of legal work being seen as a ‘grudge purchase’.

 

Value agreements

Isn’t it time to evolve from costs agreements to value agreements?

If you want clients to feel as if they are getting good value for money, you should use any retainer documentation as your second best opportunity to communicate or reinforce (sell!) the value of your work. (The best opportunity is the client interview or discussions where of course you communicate value clearly, don’t you).

Compare solicitors costs documentation to proposals for professional work in other areas. There’s normally a clear structure that focuses a client’s attention on value and benefits. Something like this:

• Your objectives
• Scope of work
• Value
• Fees / price

The ‘your objectives’ section should aim to demonstrate that you understand what the client is trying to achieve – including the balancing of different priorities in terms of costs/time/outcomes/residual risk. Ideally, it should aim to clarify not only the specific legal outcomes the client is seeking, but also the personal and commercial goals behind and beyond the legals.  It might even touch on the client’s conditions of satisfaction – the outcomes (including time/cost/service) that the client would be happy with come the end of the matter.

The scope should be tailored to the specific matter. Don’t list everything you can do: just list what you propose doing for this specific client. Without going into too much detail (a simple table?), try and explain the value of some the tasks and activities in the scope. Explain what you propose doing, why you are doing it, why you propose doing it in a certain way, and the risks of not doing it.

Value should then explain what’s in it for the client. How do your services help the client realise or move towards their broader personal or commercial goals? Explain how your services protect the clients rights or advance their interests, create commercial or personal opportunities, reduce or manage risk, save them time and hassle, reduce stress and anxiety, save them or make them money.

Introducing a simple Objectives/Scope/Value section might add another page to your costs documentation – but at least now the client will be able see what they are getting for their money.

 

Happy lawyering!

www.gileswatson.com.au/blog