Offering the occasional freebie to a loyal client can help to cement valuable relationships but accidentally billing for it will have the opposite effect, says Eleanor Kilner
Legal practice is a service industry and it is important to keep that in mind when dealing with the client. In a competitive legal market (particularly with the introduction of alterative business structures) producing excellent service at competitive pricing is key. In the circumstances, it is common to offer the odd service on the house to repeat clients. While this is a good idea in principle, it is important to ensure that the discount does not then appear on the bill, as charging the client for the freebie will have serious consequences.
In this scenario, a partner offered a repeat client a freebie defence on a low value litigation matter as a goodwill gesture; the firm had been instructed by the client on four larger matters and were keen for further repeat business.
The defence was drafted by the solicitor with conduct of the matter and she recorded her time for drafting the same on the matter assuming the partner would know to write it off. The bill was raised, checked, and was sent out. Upon receipt of the bill, the client noticed the error and called the partner.
In this situation it is important to apologise immediately and explain that you will make enquiries as to the process that resulted in the error. You should reissue the bill with the correct figure.
You must appreciate that the client’s confidence in your conduct may have taken a knock. Therefore, options for remedies not only include fixing the specific problem but also improving the aspect of service that led to the problem and informing the client of any changes. It is imperative that procedures are reviewed to ensure that this error is not repeated. You may need to allocate more resources (time or fee-earners) to checking bills and/or consider how freebie time is recorded. There are two options for the latter. The first is to record chargeable time at zero value and ensure the fee earner enters “[NO CHARGE]” into the description. That way the client can see the saving that has been made. The other option is to record the time under a non-chargeable code (perhaps a code specifically set up to record client incentives and goodwill gestures). That way the firm can assess the overall profitability of the relationship and, if necessary, consider alternative ways of maintaining it. In deciding the best option the firm should have regard to various factors including the practicality of the option, the time and attention generally allocated to checking bills, any SLA in place, and chargeable time targets (among others). Whichever option you choose should be implemented immediately.
You should explain to the client the improvements put in place as a result of the error and re-affirm the client’s value to the practice and the practice’s commitment to good client service, perhaps taking it as an opportunity to outline not only how valuable the client relationship is but also what other services you might be able to offer.
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