Professional services: Fees

How much should a professional charge as a fee?

This is a question that I have found almost impossible to answer. Let me tell you why.

Suppose you have a client who has a slightly complicated family relationships. The client is a 65 year old widow who is rich, and has the following assets:

One own house in which she is living with one unmarried son,

One house given out on rent

Equity shares worth Rs. 50,00,000

Mutual funds worth Rs. 80,00,000

Bank fixed deposits worth Rs. 55,00,000.

Apart from all these assets she has a monthly pension of Rs. 40,000 which more than takes care of her needs.

She is supporting her husband’s handicapped brother (who has an independent income but stays in this lady’s house). She has 2 sons doing very well professionally, and 3 daughters doing well. However one son-in-law is in his family business, which is floundering. Her daughter too is in the same business as the son in law.

She needs a will.

One lawyer says…Here is a format..just sign,…..my fees Rs. 8000.

The second lawyer asks the following questions:

Do you really want to help your daughter?

Will giving her money really be useful?

Is it fair that you are cutting out YOUR SONS from the money – JUST because they are doing well?

Should you not leave the money for your sons with instructions that they should help her when the need arises?

what happens if you leave the house to your daughter, your daughter dies and your son in law gets the house?

Do you realise that your son in law has not provided anything for your grandchildren’s education – do YOU want to do that?

How will you ensure that your daughter and son in law continue to provide support to your brother in law?

what stops your son (staying with you) from selling off the house and squandering the money?

Why should your daughter have a feeling ‘mom will give the house to me ONLY’ as of today itself?

And by the way what is the hurry to transfer the flat now?

Now that you have made your son a part owner of all your shares, what happens if his property is attached by a court (remember he is doing well professionally but you have no clue of his personal net worth, guarantees given, etc.)

Do you know that you can create a Trust so that all the kids in the house can have their education expenses paid for?

By the way, after you answer all these questions, there will be 20 more.

My fees for preparing you for the complexity of the will : Rs. 25,000

My fees for making your will based on your inputs: Rs. 7000

+registration charges if you insist…

To me the first lawyer is far, far, far more EXPENSIVE…

 

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6 Responses to “Professional services: Fees”

  1. as much as his conscience allows..

  2. Surprised to see no comments !!!

  3. Vasumathi Sriganesh on June 24th, 2013 at 7:35 am

    Completely agree about the first lawyer being far more expensive. And I can understand why this is SUCH A TOUGH issue.

    Most people seem to think “immediate” and not “long term”. So when a lower fee is the “immediate” one, they lap that up. The 2nd issue is people want “band-aid” answers – and not have to think about so many things themselves. And I guess it IS very tough to answer questions like “Do you really want to help that daughter”.

    And yet – each of us has to learn to answer such questions, and value any professional’s time and expertise.

  4. There’s a 99% chance ppl won’t get lawyer who asks above questions even if he charges 50k

  5. And, many people want the Type 1 Lawyer.

    Objective: Prepare a WILL. That too for 8k.

    Job Done.

  6. You are absolutely correct in your observations.

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