Setting and Negotiating Your Fees transcript · 2015. 12. 5. · negotiation strategies and tactics that you may encounter in talking to attorneys. ... picked up the slides and have

HowtoGetAlltheClientsYouNeed:SettingandNegotiatingYourFeesPatriciaIyerandGregWilliams

1 | P a g e C o p y r i g h t P a t r i c i a I y e r 2 0 1 3

Setting and Negotiating Your Fees [Slide 1]

Pat: Good evening, this is Pat Iyer with Greg Williams and we are presenting tonight on "Negotiation".

What I'd like to do is to make sure you can see my screen and you can. One of the interesting things about this Greg, and maybe you can help me figure this out, is on my monitor on the left is a full screen picture of the slides but what they're seeing is not. They're seeing the slides and I'm trying to minimize the ones on the side there.

Greg: Can you actually click start, what's usually at the bottom right? I think it's almost something that looks like a projector when you're in PowerPoint. You know how you actually start a slideshow.

Pat: Yes I started it, but it's showing the monitor that's in front of me. We'll just go with this. I made those slides on the left hand side as small as they can go, so hopefully it will not distract you. When I get a chance I will figure out how to do this in the future.

Let me introduce Greg Williams who is known as "The Master Negotiator". He is somebody that I have personally known for I guess about five years. He's the person in our local community of speakers and professionals that we go to when we have difficult negotiation issues to address. Greg has a lot of experience in the business world and has done a great deal of presenting to people of all different backgrounds about negotiation.

The way that we have set this program up, Greg will begin and I will maintain control of these slides so that we don't end up passing controls back and forth between us. I then will take over partway through the program and discuss fee agreements in detail with you. Greg will come back and join me as we talk about some of the negotiation strategies and tactics that you may encounter in talking to attorneys.

We included this program in your marketing course because one of the first things that you are asked when you're approaching a new client is, "So how do you guys charge?"


Often in the course of working with attorneys questions come up about fees, about invoices, about payment terms, so we've included in this program very specific information on elements of a professional fee agreement.

In the private Members Area of the website, where you've hopefully picked up the slides and have been getting the transcripts as we've been posting them, we posted the "Expert Witness Fee Agreement" that we use in our company. I took out the actual dollars. I took out the name of the company and I changed that to your company as a search and replace.

I wanted to emphasize that this fee agreement is one way to approach charging attorneys. It has been based on years of experience and there's more than a little bit of blood that has been shed over the process of refining the terms of this fee agreement. I'll go through some of those areas where you can avoid trouble yourself as you look at your own fee agreements in light of what you learn tonight.

[Slide 2 -3]

So Greg, let's continue on, that's Greg and I, and discuss "Setting Fees".

Greg: Okay, thank you Pat.

First of all when it comes to setting fees you really can do it from several different perspectives. As an example, "What is it that your competition charges", is one aspect that you could look at as far as how to determine what your fees will be. If you do use that as a basis, how do you then wish to position yourself?

There are different ways and strategies that you can utilize in order to do that. You do not necessarily want to be priced as the lowest entity in a particular choice that a lawyer may have to make because in so doing the lawyer may equate your fee with the type of services that you will render.

[Slide 4]

So that being the case, how can you go about really creating the perceived value that you're going to offer a lawyer? First of all you


have to understand your market place and by that I mean you really have to understand what it is that the lawyers in your marketplace perceive as being of value.

We all have a different perspective of value and it is to a degree shaped on the environment in which we're in. Thus if you as an LNC create a value proposition as perceived by the lawyer that you're dealing with that happens to be midrange the lawyer may think, "Okay, the service that I'll receive may also be midrange." Thus you need to understand not only that lawyer's perspective, but the mindset of those that he/she deals with.

Now that's to say that in a lot of environments people tend to hang together that have the same outlook, the same perspective, the same views, so if you understand what it is that the lawyers and the group in which they congregate and which values they actually have you can be better positioned to understand their value proposition. You also need to do what I call "your homework". You have to understand your value proposition. You have to understand and create the perspective and perception that you are someone that they really should do business with.

That could be done from different perspectives. You can create or position yourself as an individual that is a go-to type person. If you create an image of that perspective you then need to understand what it is that the lawyers will perceive you to be based on the amount of work they might be able to give you. If you have yourself perceived as a problem solver you can then turn around and actually charge for it because in certain situations lawyers may feel as though I can't have this go wrong. And if that's their perspective by all means you then can charge more because they're literally coming to you. Because again you've positioned yourself as not only the problem solver, but you've also positioned yourself as the person to go to when dire situations are actually in demand and need some form of attendance.

Now let me ask all of you from a positioning perspective how often do you ask for what you want? We have a polling question and Pat, can you put the polling question up?

[Polling Question 1]


Pat: Sure, I can now that I have also figured out how to change the screens life is good.

Greg: Okay.

Number one is "I always ask for what I want". Number two: "I ask for what I want dependent upon who I have to ask." Number three is "Sometimes I'm afraid to ask for what I want."

Take a quick poll and answer those questions real fast because it will give you insight into not only the type of demeanor that you possess, but maybe what it is that you need to do in order to be better prepared to negotiate with the lawyer. It should also uncover some of the hang-ups, if you wish, that you might possess that might stem from years gone by when you did business in certain environments with lawyers.

Pat, where are we right now with the polling?

Pat: It looks like just about everybody has voted. Let me close the results and share them. Greg, I have a very tiny screen and I can't see the results. Can you read those for us?

Greg: Yes I can. Forty percent said I always ask for what I want, 40% said I ask for what I want dependent upon who I have to ask, and 20% said sometimes I'm afraid to ask for what I want.

That is very interesting. It's interesting because I can see that just about most of you are not afraid to ask for what it is that you want. And yet in looking at the results sometimes I'm afraid to ask for what I want, so let's take that category first.

Why? Why is it that you're afraid to ask for what you want? Is it because of some fear factor that you perceive a lawyer to possess?

That's a question that you need to pose to yourself. The 40% that said "I ask for what I want dependent upon who I have to ask," again is the same thought process. Who is it that you're really afraid of and why are you afraid?

The 40% who said "I always ask for what I want", okay that's all well and good. Sometimes from a negotiation perspective it behooves you to just let the other person tell you everything that they might want


you to hear and/or think. And then go about asking for what you want from not necessarily a manipulative perspective, but from the perspective of just gaining more information and observing what type of response you actually get.

Now we're going to talk about some aspects of body language throughout this presentation, but for right now let's leave this poll where it is.

[Slide 5]

When it comes to asking for what you want you have to understand if you're fearful or if you only ask some of the times what it is that is truly motivating you or to be quite frank, what is keeping you from actually asking for what it is that you actually want.

There are different ways to go about positioning yourself so that you can achieve more and still ask for what you want. You can use "assumptive questions". Assumptive questions imply that you actually know more about a particular subject matter then what might be otherwise the case. It can also be used to assist you in posing questions in a right manner so as to find out what the probability might be to get what you want.

As an example if you said to the lawyer, "Well, I understand in the past you've paid ____". Name the figure and observe the lawyer’s behavior. You could actually see through his behavior what it is, even if you're listening on the phone that he has paid in the past.

You can also use "assumptive questions" to test offers, to solicit additional information, and to make counter offers. Never forget the value of asking for what you want. In a worst case scenario somebody says "No".

Pat: How about do you have any questions so far on negotiation and some of the issues that you might have concerns about when it comes to setting your fees?

I think one of the things that many legal nurse consultants have questions about is where to set their fees in terms of dollar amounts and I'll be talking a little bit about that when I go through the components of a fee agreement.


When you signed in you got the question box in front of you, if you could, give me some feedback in terms of where you are in your business. Can you fill in your question box and tell me how many years you have had your business and I'm going to talk about "maintaining fee integrity".

[Slide 9]

This means many different things from the perspective of a legal nurse consultant. One of the basic things that it means is that when you're working with plaintiff attorneys as well as defense attorneys that you're charging the same hourly rate for each side of the law or both sides of the bar. It's not appropriate to give one side a wholesale discount whereas you are charging a separate and higher fee to the other side. So maintaining fee integrity is one of the concepts that make for a very good business climate of being sure that you're consistent in your charges.

One attorney sometime ago heard our hourly rate and he said, "Well, can you do better?" And my immediate response was to think "Sure, I can charge you more per hour then, that's my set fee." But he was approaching this as if he could negotiate and reduce the hourly rate just because he asked for it. That's the kind of approach that you have to be very resistant to and not giving in just for the sake of getting business.

[Slide 10]

Let's talk about "fee agreements". I have a polling question for you. The polling question relates to specifically what we're going to be talking about next.


I'd like you to look at the question on the screen and answer one of those answers.

"Your fee agreement is perfect the way it is."

"Your fee agreement could need some help”

“What fee agreement” (Meaning I don't have one.)


Take a few minutes to vote and then I'll share the results. I think your fee agreement, which we'll be discussing in this program, is probably the document that is most important for being able to run a profitable business. This is a really crucial aspect of having a legal nurse consulting business.

I see that people are voting and I'll give you a couple of more seconds before I close the poll for you to select one of those choices. All right, let me see and I'll share the results. We came up with 60% of the people saying my fee agreement needs some help and 40% saying what fee agreement.

All right .Very good. Let me hide that poll and resume back to the slides.

[Slide 11]

Let's talk about the "fee agreement".

These are some of the components that are most commonly found in fee agreements. Again, I will be referring through the document that was posted in your member site.

[Slide 12]

One of the things that legal nurse consultants typically think about is how much are nurses being paid in their area. There used to be a principle that a legal nurse consultant would charge three to four times the hourly rate for staff nurses in his or her state. This is a poll that was published in August in Nursing Advance and you'll notice that it gives poll information state by state. You can look at where you are on this particular chart to get a sense of how people responded to the poll.

Now remember a lot of the validity of numbers depends on how many people answered the particular question on their typical salary or their actual salary. But if you look at this what struck me is that staff nurse salaries have certainly increased over the years, particularly in certain parts of the country. And it's true that you tend to think that the cost of living and the salaries are highest on the East Coast and the West Coast, but if you look at some of those numbers that may not necessarily be true.


Based on this information I think charging an hourly rate of three to four times the staff nurse salary is something that you have to look at in a broad sense to see if that's going to fit your business and the income that you need to bring in order to cover your cost. It may be that two or three times the staff nurse hourly rate is appropriate. It may be that another approach is to take a look at what your costs are and then calculate your fees.

[Slide 13]

So returning to this concept one of the components we just talked about is pricing based on staff nurse hourly rates. Another as Greg mentioned is looking at what your competitors are charging. It's a little tricky to get this information from your competitors. In the beginning when I started my company I know that legal nurse consultants contacted me posing as attorneys and asked me what our company charged for certain services. It was always possible for me to calculate by the way they asked the questions were they actually an attorney or were they a competitor or a potential competitor.

I didn’t give them the information over the phone. We'll supply a fee agreement to people that we know are attorneys, but not people who are trying to use dishonest means to try to get that information from us.

I mentioned knowing the cost of doing business. What does it cost for you to maintain your office, to have insurance, to have employees if you're at that point, although many of you may not be at that point? What does it cost to consider all of the down time that you have in the business when you're marketing, when you are doing invoicing?

All of those numbers have to be taken into account in order to come up with a reasonable hourly rate. The perils of low-balling, as Greg mentioned in the beginning, relate a lot to being perceived as number one not having experience and being desperate for work. And most importantly if you set a low hourly rate in the beginning when you start your business you will find it extraordinarily difficult to raise that rate as time goes on.

Someone said to me recently, " I think what I'll do is I'll charge $25 an hour to do legal nurse consulting." I begged her not to do that for all


of those factors and most importantly that it would undermine her own credibility and she would be perceived as being a rank amateur who is desperate for work. So definitely this is not something that you should be involved with in terms of setting rates.

[Slide 14]

When you're looking at a fee agreement consider the kinds of things that should be billed for at an hourly rate. We have in our fee agreement, for example, a flat comprehensive rate. We bill all services for the experts at the same hourly rate. We find that attorneys like having a flat rate that it is not increased for testimony, although I know some expert witnesses do increase their rates for testimony. Our flat rate is understandable and it seems fair to them.

In your hourly rate also think about a one time only opening and closing a file fee. Within the last couple of years, and we've been in business since 1989, we have included in our fee agreement the one time only opening and closing one hour fee. That covers all of the time that we spend invoicing. It has a portion that's identified for when we have to shred records. We've not had a single attorney question that inclusion of that one time only hourly rate.

[Slide 15 - 16]

Another piece of your fee agreement is a "rush fee". Many attorneys over the years asked us if we had a rush fee and for many years we didn't. We started putting a rush fee in after the question was asked a number of times in the form of, "If you are going to charge me an extra fee because I need expedited service I understand." Attorneys were volunteering this to us, so we started charging a rush fee and that leads me to questions for you.

What are your thoughts on a rush fee?

Do you have a rush fee?

Would you type in your answer in the question box and I'll share some of the responses and also see if there are any questions that have accumulated while I was talking as well.


Okay, a couple of people are responding saying, yes, they have a rush fee. All right, yes we have a rush fee. Perfect.

The "rush fee" is calculated in a number of different ways. There is no right or wrong answer. Some people charge an extra $50 an hour. Some people charge an extra $100 an hour. Some people double their hourly rate. What we do in our business is charge an extra $50 an hour and have not had attorneys object to that. It seems reasonable to them.

What's important is to define what is a "rush". In our world a rush is when the initial work on the file has to be completed within three weeks. We calculate the three weeks based on when we have all the components, the records, the retainer, and the signed fee agreement. If the records come in but then the retainer is not in our hands until two weeks before its due then it becomes a rush rate, so all of those pieces have to be in place for the clock to start ticking.

[Slide 17 - 18]

Other considerations in your fee agreement:

I will be talking throughout the course of tonight about retainers and the importance of getting retainers. We do require that they be in our hands before work on the file begins, so that means that the case gets put aside until the retainer is received.

Now this is one of those lessons we learned the very hard way by being pulled in on a few occasions to do work on a rush basis without charging a rush fee because we weren't charging rush fees right from the beginning. If I were starting my business today I would have a rush fee in place immediately, so for those of you who are at the beginning stages I would build this right in today in your fee agreement. But we're very strict about the retainer because we have been burned on a few occasions by attorneys who wanted work to be done quickly, but then when it was time to send the money to pay for the work they were not paying. The money wasn't there.

So the importance of having that retainer is really crucial. It protects you. It makes sure that before you commit your resources to working on a case that you have received the money from the attorney. The only exceptions that we ever made to this rule and the only exceptions


that you might have to make is if you're working with an insurance company and they will not pay a retainer.

The advantage in working with the insurance company on the defense side is that you know that they have the money. It's not a question of them not having sufficient funds in their accounts. You know you'll get paid, but they have a harder time getting a check generated in advance of work being done.

This is not true for all insurance companies, however. We made an assumption that we could never get retainers from defense attorneys and insurance companies because we met resistance, but then we said, “Let's ask.” Greg talked in the beginning about asking for what you want, so we started asking the defense clients if they could obtain a retainer from the insurance company and some of them could and it was a wonderful thing. It made life better and it made us happier.

The next part of this slide is,

"How will you be paid?"

"Will you accept checks?"

"Will you accept wire transfers from bank accounts?

"Can you accept credit cards?"

We don't get a lot of attorneys paying retainers or their bills on credit cards. Although I did have a client in another state who was very happy to pay his bills with credit cards because he liked to go on vacations with all the miles that he was earning by paying the bills of his law firm with his credit card.

He was unusual however and there is typically a monthly fee for being able to maintain taking credit cards from attorneys. It may not be worth it for you to go out and get merchant approval, but wire transfers are something that are really a very nice thing and it means that the money comes from the attorney’s bank account into your bank account.

There is typically a processing fee that the attorney has to pay in order to wire transfer the money into your account. We have had a couple of


last minute requests where they claimed they couldn't get a retainer to us, but they were able to arrange for a wire transfer into our bank account. So I would recommend that you state in your fee agreement at least how you would accept payment in the form of checks, wire transfers, and possibly credit cards if you decide to go that route.

A very important thing to keep in mind, particularly when you're working for plaintiff attorneys, is you don't want to accept payment from the plaintiff. When the plaintiff is paying the bills to the expert (or consultant) that puts you in the position of having to go after the plaintiff to collect money if you don't have enough retainer to cover a bill. I'll talk about "replenishing retainers" in a minute.

Your client is the attorney. That's a very important concept to keep in mind. The attorney might be getting paid by the plaintiff but your client is the attorney, so the person responsible for paying you is the attorney. When we get a check in from a plaintiff we send it back to the attorney and we say, "We cannot accept payment from your client. Please issue this check from your bank account." That's a real important thing for you to keep in mind. You want the attorney to be the one issuing the checks.

[Slide 19]

Another piece of this is to take a look at hourly rates. This again is something that's a little bit controversial. What happens when you change your hourly rate? The year changes and you decide you want to increase your hourly rates. Now what do you do with those cases that you started before you raised your rates?

At that point you have a choice. I think there's only one answer to this question, but some people do it differently. Do you keep those cases that you brought in at the lower hourly rate? Do you continue to charge at the lower hourly rate for them, but the new work that you bring in you charge at your current rates?

The dilemma, of course, is that you raised your rates because you've gotten more experience or the cost of living has gone up. Cases go through the litigation process for three to five years. So are you going to be then caught up with a case that you may have been charging two


years ago at one rate but now you're charging at a higher hourly rate and how are you going to keep that straight in your billing?

I think it's a big confusing system. We always raise our rates across the board and the invoices are based on what we're charging at that time rather than what we were charging three or four or five or six years ago when the case came in.

Greg, are you back with us now?

Greg: Yes I am. Can you hear me Pat?

Pat: Yeah. We're still getting an echo however.

Greg: I don't know why that is. I'll try yet another source.

Pat: Okay perfect.

[Slide 20]

All right moving on, "The provision of the documents":

The attorney is expected to go out and collect the material that you need. We recommend to our clients not to send us their only copy of the medical records.

We had one attorney who wanted us to take the medical records from the expert, ship them back to the attorney so that he can take depositions for other parties in the case, then to retrieve those records back from the expert, and ship them back and forth. It was ridiculous. The attorney should have his or her own copy of the medical records that are in the attorney's possession and then the expert or you should have a separate set. There's always the risk of records being lost during transport going back and forth, so keep that in mind as you are handling records.

We also personally because we do a lot of work providing experts to attorneys always organize the records for that expert, particularly if there's enough time and it's not like a super rush where the expert has only a short period of time to review those materials. The expert then keeps those records in his or her possession until the case is over.

[Slide 21]


Charges are billed typically on an hourly rate. Some people bill in six minute increments. Some people bill in ten minute increments and some people bill in fifteen minute increments. If you have our fee agreement in front of you or you refer to it later you'll realize that we bill in fifteen minute increments. The math is much easier than six minutes or ten minutes personally for me. We've established that as a standard right from the beginning that we bill in fifteen minute increments and we round up to the next quarter hour. So what that means in reality is that we started at 8:05 working on a case and we finished at 9:00 we round up so that's sixty minutes or one hour as opposed to billing for fifty-five minutes.

Those little rounding up calculations that we do add up. It can increase your bottom line a little bit because you are doing the rounding up and as I said it makes it much easier to calculate.

[Slide 22]

Every year the IRS establishes a current rate per mile. Typically consultants will think about do I want to bill for every mile that I'm traveling going to a client’s office or going to testify for example. Many people bill for mileage plus an hourly rate. Some people charge travel time at a half hourly rate. Some people charge travel time at a whole hourly rate. We personally charge and always have at the full hourly rate because the theory is that if you're not sitting in your car you could be working on a case for an attorney. So it's your time. It's billable time and therefore should be compensated for at the full hourly rate.

If you are involved as an expert or you're asked to make travel arrangements to go to another place in order to meet with an attorney or testify be sure that the attorney is responsible for paying the air fare, the hotel or whatever transportation cost there are.

I do know of one attorney who asked an expert to refund the cost of the ticket that the law firm purchased saying the ticket was in the expert’s name and therefore no one could use it but the expert. But the expert didn't pay for the ticket, the law firm did and so it was really their risk that they took by purchasing the ticket. The case settled. The expert didn't have to go to trial to testify. The expert was not responsible for paying back the attorney.


Meals are typically billed as incurred. So if you're out all day and in the process of spending a day at a law firm and have to go out to lunch and you're by yourself, typically the attorney will pay for your lunch. But if the attorney is not with you then that's a billable expense that you can pass on to the law firm.

I don't recommend that you bill for things like how many pages you had to fax or how many pieces of paper in your report or how much postage you put on to send the invoice. Those types of charges look very petty in my own opinion. They're difficult to keep track of and you don't want to have to go through your phone bill at the end of the month and try to say, "Well that was a $1.32 for that phone call." Those kinds of things are really not worth your time trying to keep track of. However, if you are printing out large volumes of medical records it's perfectly reasonable to charge for the paper and the time that it takes to print records. In our world that's a billable expense.

Some of things that we do may not fit the way that you bill in your business or may not fit the way that you are comfortable billing. There's no set rule and no set requirement that you bill in particular ways. What I'm sharing with you is the way that we do it and the way that has enabled us to build a very profitable business.

[Slide 23]

So let's talk about "retainers" and I'll have a polling question for you to ask you about retainers now that we have had some discussion about that.


Now you have five choices and you can choose more than one answer for these questions.

The questions deal with when you ask for retainers and what you do when retainers come in.

Greg: Pat I'm back again. Can you hear me better?

Pat: Yeah and there's no echo this time. That's really great.

Greg: Okay, I guess I stopped whistling.


Pat: I appreciate everybody's patience while we work through these technical issues. They're often unpredictable and Greg and I went through all of this before we got on the call. The sound was perfect, life was good, and everything sounded fine and then, boom, it all changed.

Greg: Yeah, Murphy came in.

Pat: I don't know if you heard any of what we were talking about, Greg, and if you wanted to add anything to what I said is people are voting on this question on retainers.

Greg: I definitely do because I did hear the statement you made about lawyers getting retainers from insurance companies and sometimes it can be difficult, some do and some don't etc. I was going to say when I was speaking about using "assumptive questions" to gather additional information. One way you might be able to use an assumptive question in that particular situation is to say something along the lines to the lawyer of, "So can you tell me how you go about getting retainers from insurance companies?"

Now the assumption there is you're aware that the lawyer has gotten retainers in the past or something of that nature. The worst case scenario the lawyer says, "Oh, we don't get retainers from insurance companies," to which you can then say, "Why?"

The point of the matter is, in so doing, you're gathering information. That's what you want to try and do so you can always position yourself from the perspective that the lawyer sees you as being able to offer and provide the greatest value.

Pat: Very good point and you know that the attorneys are definitely not working on the assumption that they are not going to get paid by the insurance company. They won't work without retainers for their clients.

I see a question here while people are voting, "Will you repeat what you do about rate changes?"

What we do is very simple. We raise our rates across the board, so if we raise our rates, for example, on April 1st. Then any work that is done after April 1st is charged at the higher rate across the board for


every case regardless of whether the case came in on January 1st of that year or January 1st two years before. So everything that is billed from that point on is billed at the new rate and therefore we don't have to worry about, "Oh, this case came in at $175 an hour," and now we're going to bill for the rest of the time that case is active until it's closed at $175 an hour. But then this case came in at $200 an hour and now we have to bill for that at $200 an hour.

It's too confusing to try to keep that rate consistent throughout the life of the case. What counts is that the rate that we bill is the rate that we're charging at that time, so everything goes up across the board for the rest of that time until that case is resolved.

All right I've got some answers here for the poll, so let me share the results. What we see is 50% said I always get a retainer, 25% say I don't always ask for a retainer, 25% said I don't ask for a retainer, 38% said I hold up work waiting for a retainer, and then nobody said I invoice and then ask for another retainer. So let me talk about that piece now and why that's so important.

[Slide 24]

The concept of the "replenishing retainer" is based on the fact that you take in a retainer - let's say for ten hours - our retainer is for ten hours, and you end up spending twelve hours on the case. You can take the ten hours from your retainer and pay yourself for the work that has been accomplished, but you have to invoice the attorney for those other two hours. So when you have a large volume of cases going through your business and you got those two hours here and somebody else owes you three hours and somebody else owes you five hours you are continually trying to collect money that you are owed for work that you have done. That becomes very time consuming and very difficult.

The "replenishing retainer concept" which I explained in the fee agreement as well as what I'm explaining to you now is that you ask for another retainer before the first one is used up.

I'll repeat that. "You ask for another retainer before the first one is used up." We use a 75% mark in our business. This is one of the secrets of cash flow and this has made our life dramatically different


after we implemented this policy about two years ago. What it means is that we are not chasing attorneys for money with the frequency with which we used to chase them. We still have to occasionally chase them. That's more a function of the fact that we're billing for our expert witnesses who don't always let us know when they are reaching certain points where they should be sending us their billing sheet so that we can ask for another retainer.

Greg will talk about leverage. It's one of the favorite words of negotiators. When you are asking for a retainer you also have the option of holding up work if you don't get the retainer. That's why the 38% said, "I hold up work waiting for the retainer." That's why that principle is so important because you have leverage. The attorney needs the report. The attorney needs the expert. The attorney needs the case screened. You want the retainer. You want to make sure that you're not spending your time chasing attorneys for money so you ask for a "replenishing retainer".

Now this is not a new concept to attorneys. This was something that I learned by going to a conference many years ago for expert witnesses. The conference was taught by attorneys and they shared with us model fee agreements. The "replenishing retainer" was one of those provisions.

What this means is that the amount of money that you have to chase trying to get those two hours or three hours or five hours dramatically decreases. So I can't emphasize this enough. This is a real key point for running a business and being able to maintain a good cash flow.

[Slide 25]

Invoicing:

I don't recommend doing your invoicing once a month. I recommend doing your invoicing as soon as you've reached a logical place in the case in which you can stop, in other words you have reviewed the records and you've prepared a report. That's a logical place to invoice assuming you haven't used up the ten hours of your retainer. Again, ten is a nice round number. Attorneys are not surprised by having to send a retainer in for ten hours. I do know some legal nurse


consultants who request smaller retainers like $500 for example. I do recommend getting ten hours.

I also have learned from over the years that the more details that you give on an invoice to an attorney, the nitpickers of the world, and some attorneys are nitpickers, want to pull apart your invoice and say, "I don't think it should've taken you two hours to organize those records. I think you could've done it in an hour. I don't think it should've taken you five hours to write the report. I think that it should've taken you 3½ hours." So we create as a way to combat that type of behavior. Our invoices don't breakdown everything into finite detail. We lump items together, such as “organize, review records, and prepare report."

That might be a typical invoice and it'll give the starting time, the starting date, the stopping date, and the total number of hours that we spent. Every once in awhile - rarely - an attorney will ask, "All right, what's the breakdown? How many hours did you spend doing this and doing that," but it's a very rare request and we process hundreds of invoices every year.

So keep in mind that your invoice should also have your business EIN number if you're incorporated as a business or your Social Security Number if you're working as a sole proprietorship and not as part as a corporate entity. Your payment terms should be there. The invoice may be payable upon receipt - your payment terms. You may choose to include an interest rate of 1½% per month until the invoice is paid and that is also standard.

Now we do find on those occasions when we do have to chase money, which are few in number now, that we don't always collect the interest but the fact that you can have the option of choosing interest and you can impose interest on an invoice acts as an incentive so that the attorney is more likely to pay your bill faster.

[Slide 26]

The responsibility for the payment is not contingent upon the conclusions reached, which means that if you are supplying an expert to an attorney and the expert does not find liability for a plaintiff attorney, it doesn't mean that the attorney doesn't have to pay for the


service. It's not contingent on the findings and the conclusions of the case.

The responsibility for paying this bill is that of the law firm. It's not the client or in this case the plaintiff. It doesn't depend upon the arrangement that the attorney has with the client, for example in the case of a plaintiff attorney as I mentioned before. Some attorneys want the plaintiff to pay all the bills and that's not really your concern. Your responsibility is to collect the money from the attorney and not from the patient. So whatever arrangement they have is between them, but it doesn't affect you identifying the attorney as the client responsible.

The law firm is responsible if there's an insurance carrier. The insurance company is the one that is responsible ultimately in the defense side for paying the bills, but your client, the attorney, is the one that you want to be contacting about getting those invoices paid.

[Slide 27]

If you are an expert or if you supply experts you want the attorney's paralegal or secretary to make travel arrangements, like air travel, a hotel, and car rental. You want to make sure in your fee agreement that you specify the depositions are not held in the homes or offices of experts that you might supply. It's very awkward to bring a court reporter into the dining room and do a deposition. We don't recommend that at all. Everyone needs their sense of security and privacy. It's the responsibility of the law firm to have an appropriate room to make that kind of an arrangement.

There has to be adequate notice of a deposition and again this may not apply to you if you're not supplying experts or you don't plan to be an expert or you're not an expert. But some of us run businesses, myself included, that involves supplying experts, so these are components that are in our fee agreement. There has to be adequate notice and there has to be prepayment of an estimated fee for preparation, travel time, and the actual deposition itself.

Another bit of leverage that you can use and you can use it when there's a deposition scheduled or the attorney asks for more work on a


case is that you have to have invoices paid up before you can do additional work.

One of the legal nurse consultants that I am coaching was approached by one of her clients to do work on a new case and she said, "I'd be happy to, but I've got several outstanding invoices that have to be paid up before I can do anything else." Two days later she had her check. It's a beautiful thing.

Cancellation Fee:

Some people charge a four hour fee or less or more if a deposition is canceled at the last minute and that's based on the premise that if you were not going through the deposition you would be doing other type of billable work. Some of our experts are in the position where they take off vacation time or they use vacation time to schedule a deposition and then they may not be able to capture that income if that deposition is canceled.

[Slide 28]

The provisions for a trial are much like deposition provisions: adequate notice, invoices paid in full, and cancelation fees.

[Slide 29]

Closure of a case:

This is also a question that comes up in terms of paying the fees. If a plaintiff attorney, for example, is not successful in settling a case for the amount of money that he wished sometimes he comes back to the consultants and experts who were part of that case and asks for a reduction in any balances that were owed. This is a real tricky issue that comes up rarely, but is always difficult because it's making the experts’ compensation contingent upon the success of the attorney which is considered unethical in the legal world and certainly not a negotiation strategy that you'd want to be involved in.

It's also important to make sure that the attorney knows that you might have outstanding invoices if a case is settled. What often happens is that there's only a one week period of time when which the experts and consultants have to get any remaining bills to the attorney before


they make final disbursements. So if an attorney contacts you and says, "I'm about ready to settle this case or I've settled the case, please send me any invoices," it's important to do that quickly.

[Slide 30]

Another issue that comes up is "Collections":

If you have a replenishing retainer agreement, your cases that have to go for collections should be very small. We might have one every couple of years that has to go to a collection agency. I don't think we've used a collection agency now for at least a couple of years. In one case, the most recent one that I can think of, it was a legal nurse consultant who hired one of our subcontractors through us and didn't pay the bill. We sent the collection agency after her. It was a very unusual situation.

In the event of a collection agency becoming involved you can add a 30% surcharge because the collection agency will take at least 25% out of what you're owed for their own fee. Sometimes you don't get the 30% surcharge and you're not able to collect that, but sometimes just the threat of a 30% surcharge is enough to move the attorney to pay the bill.

[Slide 31]

Typically fee agreements have a piece in it about that it is enforced by the signature. The severability is if any provision of the agreement is found to be invalid. It doesn't mean that the rest of the agreement is invalid.

[Slide 32 - 33]

There's typically language about you have the right to terminate services to the attorney for nonpayment of your fees or other causes. It's very unusual that you would have to terminate an agreement, but it is important to have that language that gives you an out so that you can walk away if you have to. You need to have a person sign the fee agreement who has authority and that you would like to have that fee agreement in your files so that if there's any question about payment in the future you got that attorney's signature on the bottom of the fee agreement.


[Slide 34]

So let's ask a polling question and I'll check for questions also at the same time.


Our last polling question is about negotiating fees. Please look at that question on the screen and select one of those choices.

Somebody wrote, "Say no to contingencies". Yes, we do say no to contingencies. Somebody else asked me do I advise attorneys prior to raising the rates.

We typically start putting on our invoices about three months ahead of time, "Effective (and we give the date), “the fees on this case will be increased," and we'll specify what the new rate will be. We do not raise fees every year. Some people do. The economy over the last couple of years, especially since 2008 has meant that we have been very sensitive to that issue and have not raised them routinely every year. That's really an individual issue that you have to think about for your business in terms of when you want to raise rates.

It looks like those were all the questions that had accumulated, so let me show those results. I have 40% said “yes, attorneys have tried to negotiate”, 40% said “no”, and 20% said “I don't have clients yet.”

[Slide 35 - 36]

So you are now going to hear about some of the common negotiation tactics that attorneys use and one of these is, "How long is this going to take?"

Sometimes that question is driven by concerns about budget. Sometimes it's an attempt to negotiate. It is very difficult to predict with any accuracy how long a case is going to take and it's particularly difficult when you are new and don't have a lot of experience as a legal nurse consultant.

I wrote a blog post about this issue just a couple of nights ago. It was something that has come up from one of the people in this course as well as a group of people who are part of my private networking


group. I will put the blog post in the Members’ Area that answers this question more fully because I'm mindful of the clock and the number of points that we still need to cover. So I'll share my thinking on that with you in the private members’ area of the course website.

[Slide 37]

A strategy that has been raised by an attorney just in the last year was, "What do you mean the hourly rate for the expert is X? People in our state don't charge that much."

This was an attorney who was objecting to the credentials of a highly qualified nursing expert with experience as the president of her national association. He wanted to pay $100 an hour less than the hourly charge for this expert. I explained to him that the charges were based on the fees for our business, which is located in New Jersey, and he certainly was welcome to have an expert in his state which is actually not that far away. It was in New Hampshire and the expert was in Massachusetts and he was giving me this hard time about the hourly rate.

I stuck to my guns. He wanted to keep on negotiating. I wasn't willing to reduce the rate because I really felt that, going back to fee integrity, he was not entitled to a reduction in the rate just because he wanted it and because the experts in his state charged less. He wasn't going to find somebody in his state who had the same prominence as this expert.

Now there is no happy ending to this story. He was not willing to pay more. I was not willing to go down. So we didn't get the case, but I think it was the right decision and I would do it again in the face of that type of strategy.

[Slide 38]

Another particularly evil suggestion is, "You just wait until this case is settled and then I'll pay your bill."

No, that's not going to work. That's not going to work because you've got expenses. You've done the work or your expert has done the work and everyone wants to be paid. You don't go into the grocery store and say, "I'll pay for my milk after I get my paycheck." You have to be a


person who is following the ethical honorable fee structure and get paid as the work is performed and not two years, three years or four years down the road.

An attorney contacted me several years ago who was working on one of the big pharmaceutical multi-district litigation cases involving a drug. I believe it Vioxx. He said, "I'll tell you what, you work on my cases and when the case is settled we'll pay you." I said "No, I can't do that. I just can't do it." We didn't end up getting those cases and that's okay because we got other cases and used our time to work on cases where we were going to be paid all along.

[Slide 39]

And now Greg we're going back to you. How's your sound?

Greg: Well I hope it's a whole lot better than it has been in the past. Is it okay right now?

Pat: It sounds fine. We're all going to sit here with our fingers crossed with both hands that it'll stay good.

Greg: Okay, good enough. First of all I would like to make a comment for those of you that said an attorney has never attempted to negotiate your fee. First of all that could be an indication that your fee is not high enough as that attorney actually perceives it should be. If that's the case that attorney is literally giving you an opening to actually raise your fee.

The next thing I would like to talk about is exactly what we have up on the screen right now. A lot of times attorneys, and I'm not trying to equate them to con artists, but attorneys and people that are trying to get you to do something that you feel as though is extremely beneficial to you, they will actually offer you a whole lot more.

You heard the cliché, "A bird in the hand is better than two in the bush." If someone appeals to your greed they're actually saying to you, "Okay if you do this now I can give you many more cases in the future” and things of that nature. You heard Pat a moment ago state the fact that not all business is a good business and thus there are business opportunities that you should turn down.


When it comes to having a proposal made to take more business opportunities, "As we go forth I'll make sure I take care of you and I will respect you in the morning," be cautious. First of all when you are actually in a gathering of information process anticipate such questions. Anticipate when you're planning how you might respond to certain situations that you might encounter with a lawyer. And in that anticipation map out what it is that you might do based on the way he/she responds in a particular situation. Plot a course by which you will get to the ultimate goal you're trying to reach for the negotiation. You may have to create alternate plans, but nevertheless create a multiple stream on how you might reach your end goal and you'll be much better off as a result of it.

Now you'll see on the screen also it says, "Use "If" to test an offer or a position."

What that means is a lawyer says to you, "Okay, I'd give you many more cases to handle as we go forth with the building of our relationship," and you might say something along the lines of "Well, if I accept that agreement...” You've positioned yourself not to say that you're going to accept it, but you make the condition of accepting it based on whatever premise you've already determined you would make in order to enhance your negotiation position. So if you say "If I accept that position what I would need is three fourths of the future cases upfront." I mean you can make it as ridiculous as you want just to test his offer, but the point is do not put you, yourself or your business at risk as the result of a lawyer’s promises that may be coming down the pike. You always want to reduce the level of exposure and risk to your business

[Slide 40]

"I want a cap on the hours."

Some people look at that and they go, "Oh my gosh, now what am I going to do? How am I going to actually address the situation?"

Investigate. Remember if you are asking questions of that lawyer you're gaining information and insight into his or her mindset. If you just simply ask the question of "Why are you seeking a cap on the hours" and then you wait for the response, the lawyer may actually be


indicating that he or she is in a cash flow situation. This would actually also permeate throughout the rest of the negotiation he or she would have with you which would give you insight as to how you might be able to position yourself to combat his or her efforts.

So again you want to know what is behind the thought, the process, and the question that the lawyer is posing to you as far as what it is that they're trying to get you to do and why are they trying to get you to do that. The more information and the more insight that you actually have as to what it is that they're really trying to accomplish the better prepared you can be to negotiate with them.

Now when it comes to capping hours you heard Pat say a moment ago to get that retainer. Again, reduce the potential risk to your business. Get the retainer. Do whatever you have to do.

You can say in the case that we have on the screen right now you cap it at 40 hours. When you reach some hypothetical mark that you've set and agreed upon with the lawyer, let's say 30 hours or whatever, you tell the lawyer "Okay, there's 10 hours left on this cap, what would you like to do?" Then wait. Find out what it is that the lawyer would like to do from that particular point so as again not to expose yourself to any potential risk that you might have otherwise incurred in your business.

[Slide 41]

Now we alluded to this early, "You charge WHAT?" versus "YOU charge what?" versus "You CHARGE what?"

Now some of you heard the tonality at which I asked that exact same question. I conveyed three different sentiments in the way that I asked that question three different times. In the latter case I was somewhat surprised and that could've been an indication that "My goodness, I thought your fee was going to be a lot more." So I say that to say always listen to the way not only questions are raised to you but at the same time understand what the intent might be behind the way the question is actually asked.

When you are listening to and observing nonverbal signals there's a lot of information that's conveyed in those signals. Very many negotiators have indicated up to 85% of our communication is in the


form of nonverbal communication. So to the degree that you pay attention to what is being said, the way it's being said, and the way that it's being verbalized you gain additional insight.

Don't go on the defensive. If you observe this body language gesture that's being conveyed not only by the lady in this particular picture that's on the screen, but by the gentleman also that happens to be apparently asking the question, her hand goes up near her throat. She's truly in a defensive posture right there as opposed to stating emphatically, "Yes and this is why we charge what we do." If you need to give that information you can just simply state your fee again that you've already mentioned and see what else you get back in the form of feedback from the lawyer.

The point of the matter is sometimes you need to stand your ground depending upon the person with whom you're negotiating and their style of negotiation. Other times you want to be very deliberate with your response to give that person the thought process that you are truly contemplating what it is that he has asked so as not to appear to be a pushover to that individual. By doing so you will be positioning yourself from a much better perspective from which you can negotiate.

[Slide 42]

"I did not settle this case for as much as I wanted. Can you reduce your fees?"

Sure I can when donkeys fly. Again, we look at this perspective of that lawyer has more than likely got himself into a box. He's placed himself into a box, so he wants you to join him.

When you're looking at your contract and the potential of signing different covenants of it you want to make sure that you address as many contingencies as you feel as though might come about. In so doing you prevent such situations as "I did not settle this case for as much as I wanted." "Okay, so what? What does that have to do with the agreement that you and I have?" That's on you basically is what you would be saying in a nice manner.

Now you also noticed I indicated with the long time client it may indicate that you will have future problems in going forward with that


person. That's the reason why you should be very leery about someone making a proposal to you of "I'll give you all kinds of additional opportunities on the backend of our relationship". Because if they experience financial situations and cash flow problems somewhere on that path that continuum becomes polluted as a result of that situation.

If it is a long time client that you have truly done business with and truly trust you might want to really have him or her tell you what it is that they can do to help you help them, but at the same time you want to make sure you mitigate all future risk.

[Slide 43]

Here's something that good negotiators do all day long:

When you negotiate be very cautious of how much time you actually commit to the negotiation. In general the longer you engage in the negotiation process the more likely you are to stay engaged because you want to see a positive outcome occur.

The full process of which you will go through is one whereby, "Well my goodness, I've been going after this business, going after this business, and going after this business. I know I'm close to a finish. Okay, everything is going to be good. Wow, at long last I closed the business."

That's when you are most vulnerable because at that particular point in time good negotiators will start to nickel and dime you just to see your reaction. Some people like to negotiate just for the fun of it all. I'm one of those types of individuals. I like to negotiate because I want to see what is going to occur next and what somebody is going to do because you're always negotiating. So if I'm able to gain and gleam insight into the negotiating habits that you exhibit at any one given point in time I know what I can do with you in the future.

Be aware of how people try to get you to give up extra things as you enter the end phase of the negotiation.

[Slide 44]

Okay here's something else that you have to be aware of too. In person I talk about nonverbal signals that you can pick up from time to time.


Always maintain of your composure unless it behooves you to show that you're upset. If you know that you're truly upset and you want to convey that to the lawyer because it's your purpose do so, other than that the old cliché is, "Never let them see you sweat". Don't let them see you sweat. Convey the sentiment through your nonverbal action:

"Well I'll tell you what, if we don't do business no problem. I'm not begging for your business."

Position yourself such that you are perceived as someone being very valuable and thus you need to be treated with respect. Also, when you're asking questions of lawyers or anyone observe how they utilize their eye movement. In general most people when they're trying to recall something that has occurred in the past will look up and to the left. When they're trying to recreate or create a situation that will occur in the future they'll tend to look up and to the right. Thus if you ask a lawyer "Well, is this the best rate that you could offer me" and he looks up and to the right, which is the future as opposed to the past, what he's trying to do is to think on his feet as to whether or not he can position himself such that he actually gives you the rate that he thinks you'll accept as opposed to what he's paid in the past.

[Slide 45]

Speaking of body language, a moment ago I alluded to the different ways in which you can convey information and the way people will convey it to you.

Sometimes people will speak a little slower to show that they're being a little more deliberate. Other times they'll speed up to show that they're excited or to show "Okay wow, I'm really glad that we're at this particular point and time." You can use the same procedures to convey your sentiments when you're talking and definitely make sure that you pay attention to them when somebody is talking to you.

When a lawyer says to you "Okay, that sounds okay." That's a whole lot different then, "That sounds okay."

In a lot of situations you want to probe just a little bit further to make sure that you're hearing what it is that you think you're hearing and that the lawyer is truly on top of what it is that he's truly conveying to you.


[Slide 46]

When it comes to perception and positioning you can always have others speak highly of you and that will serve as a form of testimonial to what it is that you've done. Pat will tell you because she does it all the time. She gains testimonials from people both in video form and written form. It serves as social proof. When a lawyer says, "Why are your services worth whatever it is that you quoted?” You can refer to the fact that others have paid it, have gladly done so, and have been better off as a result of doing so.

[Slide 48]

When it comes to making counter offers, again, you can always use questions to gather additional information because by asking questions you maintain control. To the degree that you relinquish asking questions and start giving out information the lawyer then has more control.

Always understand what points are needed to motivate him and thus where the leverage lies. You know, for example, that this individual wants to appear to be a hotshot type of attorney amongst his lawyer friends. As a result of that he always goes for the very top service when he's soliciting services from LNCs, by all means you can probably use that factor when you talk to him about negotiating and the fees that you would actually charge. You can also allude to the fact that you've done business with Lawyer "X", someone that he truly respect, and that gives you a subliminal plus in that lawyers mind.

[Slide 49]

We do have a quick poll Pat?

Pat: No. I think that we have a link here to talk about.

Greg: Okay.

Here's a link for everyone that's on the call tonight, http://www.TheMasterNegotiator.com/free-negotiation-test. Pat you're going to post this link in the chat box area I believe.

Pat: I will and it's also on the slide.


Whoops, I think I just closed out of the program.

Greg: Okay, well what that link was for everyone on the call tonight you can go and take a free negotiation assessment test. It consists of 10 questions and you get the insight into where your current negotiation abilities are. Later on Pat will tell you how we can actually give you some additional insight into gathering more information about how you can increase your negotiation abilities.

Pat, back to you.

Pat: Thank you.

I just did post that question in the chat box and I'm checking. There are a few questions that I didn't address. The question was, "By what percentage would you raise the rates?" We have raised them $25 an hour whenever we have raised them.

Yes, I did say to place your Social Security number on an invoice. If you receive more than $600 a year as a subcontractor for a law firm, in this case as a consultant, they are obligated to give you a 1099 and they have to report that income to the government as do you. They need your Social Security Number so that they can comply with the law.

Another person asked, "If you haven't used all the retainer is it returned to the attorney?" Yes. When the case is resolved or you have completed your work and there will be no additional work then we do refund the unused portion of the retainer.

Another person commented, "Don't submit the final report if there are outstanding bills." Yes, that's an opportunity to use leverage in order to get invoices paid. So you can hold up work, not submit it, not do something additional if there are outstanding bills and you're having difficulty collecting. You can use your leverage so that you can get your bills paid.

Greg, it was lovely having you come back with a nice solid voice. If anyone has any additional questions this is the time to ask them.

Greg: Pat, while we're waiting to see if any additional questions come forth I'd like to just comment on the fact of one thing you can do with a


retainer. Obviously you can try anything that the market will bear as long as you're being perceived as being equitable.

If a lawyer says something to you along the lines of, "I would like to cap this." You can say something in response to, "Well since we're going to go on a retainer basis if you wish to cap it how about if you don't use up all the time we keep the retainer."

Most lawyers are going to go "No way." The point of the matter is what you're doing then is pushing back. Remember I said you position yourself with an "If" statement. "If we do this, how about if we get X," so it becomes yet another way to just gauge to what degree the lawyer senses value and what it is that he or she has truly posed to you.

Pat: Excellent. Thank you for that point, Greg.

I appreciate everybody who's been on the call tonight. Next week you'll hear Jo Ann Kirby who is a master at the sales technique. She will talk to you about how to overcome some of the fear that you may have associated with making phone calls to attorneys and getting presentations in the attorney's office. Her message I think you'll find very reassuring. She's a great presenter and has a lot of experience in sales.

Our final presentation two weeks from now will be Chris Makell who will tie it all together and talk about exquisite client care. Once you have those attorney clients how do you keep them coming back over and over again and thinking there are no other legal nurse consultants that I want to work with, just you.

Greg: Pat?

Pat: Yes.

Greg: I'm sorry. The correct link was not posted in the chat box area. The word "Test" was left off of the link.

Pat: Okay, that is my error but please go by the link that you see on the screen. It's also in the slides that are in the Members’ Area.


That's my error Greg because I thought the word "Test" was a mistake so I erased that.

Greg: Okay.

Pat: So this is the link that you have on the screen, http://www.TheMasterNegotiator.com/free-negotiation-test. Give that a try. This is Greg's gift to you as one of the bonuses and he also provided a multi-step process for mastering negotiation which will also be in the Members’ Area.

Thanks everybody for being part of this program tonight and have a good evening.

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Setting and Negotiating Your Fees transcript · 2015. 12. 5. · negotiation strategies and tactics that you may encounter in talking to attorneys. ... picked up the slides and have