Charging Clients for Expenses

As I stated in my last post, there is some disagreement about whether you should charge clients for expenses. There are some expenses that are a no-brainer. You charge your client for investigative expenses or filing fees. These are costs that the client should pay. But, what about other costs, such as photocopying and faxing?

I fall on the side of the debate that a client should not be paid for these costs. My argument is pretty straightforward: these are costs of doing business. You should figure these into your hourly rate or other fee structure. Every business has the cost of postage, faxing, copying. The dentist does not charge you to mail you a reminder notice about your appointment. The accountant does not charge you for a copy of your tax returns. The computer technician does not charge you for faxing you some papers you might need. (Caveat: construction companies generally charge 10% profit and 10% overhead on work, but that generally covers supervisory overhead and not things like letters and faxes.)

Overhead is overhead. It is a cost of doing business. If you want to run a business, you should pay the costs associated with it. There are exceptions. A client who comes to me with less than a week before a deadline is going to pay my costs for overnighting something or for having my process server take care of it. Or a client who insists that everything be sent via overnight mail is going to pay for those costs. However, mail, even certified mail, return reciept requested, is a cost that I eat. I make sure that I am charging enough to cover my expenses.

I think attorneys need to stop nickel-and-diming clients to death. Clients will be much more willing to pay for your services if you do not charge them for every little expense.

--------Jonathan

Comments

[Petere Fontes]

I am a corporate lawyer in South Africa, and I would love it if our lawyers followed the same route. You should really ask the opinion of www.anonymouslawyer.blogspot.com on this one - he is quite hillarious (fiction obviously).

[Chuck]

Same here. This exactly describes the policy I've had as a solo.

On top of the reasons you mention though, I've always been curious about how cost-effective attempting to recover those costs was anyways. At my first firm, an admin staffer spent 1-2 full days each month just trying to tally up a handwritten photocopy log. I never did find out if the costs recovered actually covered her pay for those days or not.

[Bryan]

I agree with you entirely. My policy follows yours almost exactly. The only difference being that the client is responsible for out of the ordinary costs. For example, copy jobs that must be sent off site to a professional. These are billed to the client at the actual cost incurred.

[Bryan]

I agree with you entirely. My policy follows yours almost exactly. The only difference being that the client is responsible for out of the ordinary costs. For example, copy jobs that must be sent off site to a professional. These are billed to the client at the actual cost incurred.