Am I Obligated To Pay Attorney Bill?

[Stinky]

I sold some land a few months ago and was unsure as to how to establish a cost basis. The developer I sold the land to recommended his tax attorney. I called the guy, briefly (two minutes or less) outlined the documentation I had (a one page estate inventory) that I was pretty certain I could use to establish a cost basis. He told me to send him the doc., so I did. I followed up with him, (three minute call) he told me that yes this was the best cost basis tool and then informed me that I could build the cost of his fee ($150) into the cost basis. I thought he might be advising me for free since he does a lot of work the the developer I sold the land to. There was no agreement (i.e. disclosure of fee schedule, scope of work, etc.) between us up front outlining that I would be charged. I can afford to pay the fee but the whole thing struck me the wrong way as I was unclear that I was on the clock. Am I obligated to pay him?

OP, you've gotten over 50 responses in less than 24 hours. The majority of them suggest that you pay.

Can you share with the Board - what do you plan to do?

[MrBobcat]

It seems fairly unprofessional for the attorney to let you get this far without defining the billing arrangement and scope of representation. The fact that you have to ask this question based on the circumstances is not good. However, given the small amount involved of around $150, I think the advice to request a 1-2 page written, signed copy of his legal opinion and an invoice for the bill, then paying it, is the wisest course of action.

People seem to expect a lot for $150. Depending on the area $150 represents 1/2hr to 3/4hr of billable time, not to mention a small one off job like this is really not even appealing in the first place. That being said the attorney probably should have just told the OP up front the minimum would be $XXX and could go up to $XXX depending upon the amount of work/research/follow up involved. I seriously doubt the attorney would have even entertained taking on the OP if he hadn't been referred by his client.

[ram]

Yes..

[mcraepat9]

I’ve seen a lot of references here to written legal opinions and getting them for your $150.

The concept of a formal written legal opinion is distinct from just giving legal advice. If you ask for a written opinion that you would “rely on” if some adverse outcome occurs, you will pay far more than $150 for it (many firms in my jurisdiction wouldn’t issue a formal legal opinion for anything less than $10,000). Most legal malpractice insurance has additional riders/costs/limitations when issuing written legal opinions.

Bottomline, this is not just the lawyer giving you a summary of what legal work was done for you. The legal opinion comes with unique risks to the lawyer issuing it so be prepared to pay for it.

[Raymond]

Funny how people say pay the bill.Yet, if a doctor had been consulted for 5 minutes they might be upset to be billed $150.

Yes, I'm sure most people would be pretty miffed too if they were paralyzed and intubated in an ICU, and some doctor examined them and found a tick in their ear canal, diagnosed tick paralysis, and removed the tick, all in five minutes.

As they were walking out the hospital door the next day, I'm sure they would be muttering under their breath, "The nerve of that doctor! He could at least have spent an hour before pulling that tick out."

-----

Since OP has not yet replied, I'll guess the majority opinion here did not validate what he wants to do anyway (not pay the bill), and will likely not return.

I could be wrong, though.

[Broken Man 1999]

This post reminds me of the folks using a HDHP, and looking for a way to not pay as their responsibility is too high, in their minds.

Paying legit bills is just what ethical people do.

OP should pay his bill.

There are way too many folks in this forum who scream bloody murder if a company charges 30 cents more than they should have, and so many looking for ways to stiff various professionals.

Is it any wonder that some doctors require pre-payment for their services?

Sad to see these issues even debated, it reflects poorly on society.

Thankfully I am an optimist, and still believe most have more character than to stiff others for services provided. Perhaps my beliefs are out of style today.

Rant over!

Broken Man 1999

[bsteiner]

It seems fairly unprofessional for the attorney to let you get this far without defining the billing arrangement and scope of representation. The fact that you have to ask this question based on the circumstances is not good. However, given the small amount involved of around $150, I think the advice to request a 1-2 page written, signed copy of his legal opinion and an invoice for the bill, then paying it, is the wisest course of action.

People seem to expect a lot for $150. Depending on the area $150 represents 1/2hr to 3/4hr of billable time, not to mention a small one off job like this is really not even appealing in the first place. That being said the attorney probably should have just told the OP up front the minimum would be $XXX and could go up to $XXX depending upon the amount of work/research/follow up involved. I seriously doubt the attorney would have even entertained taking on the OP if he hadn't been referred by his client.

I agree that the lawyer was probably willing to help the client because of the referral from the developer client, who's probably an important client given that he/she is a developer. It costs more than $150 to onboard a new client since it requires a conflict check, assigning a client number, setting up a billing account, setting up a number in the document system, opening a file, and perhaps doing a new client memo.

If the lawyer is a tax lawyer and is the relationship attorney for the developer, his/her billing rate is probably such that $150 is much less than 1/2 hour of his/her time.

For the above reasons, I probably wouldn't have bothered sending a bill for what was probably 0.3 hour of work (assuming 0.1 hour for each of the two phone calls and 0.1 hour for reviewing the documents).

But if I were the client I would have paid the bill. (Of course, in my case, there are enough lawyers and accountants that I've helped as a courtesy over the years that I could call upon to help me on small things as a courtesy.)

I’ve seen a lot of references here to written legal opinions and getting them for your $150.

The concept of a formal written legal opinion is distinct from just giving legal advice. If you ask for a written opinion that you would “rely on” if some adverse outcome occurs, you will pay far more than $150 for it (many firms in my jurisdiction wouldn’t issue a formal legal opinion for anything less than $10,000). Most legal malpractice insurance has additional riders/costs/limitations when issuing written legal opinions.

Bottomline, this is not just the lawyer giving you a summary of what legal work was done for you. The legal opinion comes with unique risks to the lawyer issuing it so be prepared to pay for it.

To do an opinion you have to review the documents, research the law (even if you're confident you know it), and write the opinion applying the law to the facts. In my firm a second lawyer has to review it (and the second one has to be a senior person). I think this one could be done for less than the figure you mentioned, but not for a 3-figure amount.

Of course, most things don't require legal opinions. We sometimes have to do them for lenders when trusts are giving mortgages on real property, or when trusts are guaranteeing loans. We also sometimes have to do them for IRA custodians when we're doing a spousal rollover where the spouse isn't the named beneficiary.

[RubyTuesday]

Ask him when to expect the bill and pay it.

He probably charges minimum of either 10 or 15 minutes for any interaction. So he’s probably got 3 billing entries for total of 30 or 45 minutes work. $150 seems about right.

That said if you stiff him iMO he won’t do anything. Not worth the hassle for him to do anything other than send a bill and maybe an automatic past due notice. He would not sue you. He has bigger fish to fry, but so do you. Pay him after he invoices you.

[willthrill81]

Ask him when to expect the bill and pay it.

He probably charges minimum of either 10 or 15 minutes for any interaction. So he’s probably got 3 billing entries for total of 30 or 45 minutes work. $150 seems about right.

Really good attorneys can easily bill $600/hour, so $150 for three interactions may be a very good deal.

[johnnyc321]

If an attorney did not enter in to a engagement or a retainer agreement he is out of luck legally I believe.

This is not true at all.

[Jags4186]

It’s completely reasonable to expect to be charged for this work. You contacted an attorney at his place of business, asked him to do a task in his area of business, and received the work as expected. Why wouldn’t you expect to be charged?

[RubyTuesday]

Ask him when to expect the bill and pay it.

He probably charges minimum of either 10 or 15 minutes for any interaction. So he’s probably got 3 billing entries for total of 30 or 45 minutes work. $150 seems about right.

Really good attorneys can easily bill $600/hour, so $150 for three interactions may be a very good deal.

$600 an hour is probably a specialist in a major metro area. From lawyers,com...

The hourly rate depends on each attorney's experience, operating expenses, and the location of his or her practice. In rural areas and small towns, lawyers tend to charge less, and fees in the range of $100 to $200 an hour for an experienced attorney are probably the norm. In major metropolitan areas, the norm is probably closer to $200 to $400 an hour. Lawyers with expertise in specialized areas may charge much more.

[EddyB]

Ask him when to expect the bill and pay it.

He probably charges minimum of either 10 or 15 minutes for any interaction. So he’s probably got 3 billing entries for total of 30 or 45 minutes work. $150 seems about right.

Really good attorneys can easily bill $600/hour, so $150 for three interactions may be a very good deal.

$600 an hour is probably a specialist in a major metro area. From lawyers,com...

The hourly rate depends on each attorney's experience, operating expenses, and the location of his or her practice. In rural areas and small towns, lawyers tend to charge less, and fees in the range of $100 to $200 an hour for an experienced attorney are probably the norm. In major metropolitan areas, the norm is probably closer to $200 to $400 an hour. Lawyers with expertise in specialized areas may charge much more.

While those rates might be accurate for lawyers who generally work with individuals regarding personal and small-business issues, experienced specialist rates at major law firms are much, much higher. A first-year associate attorney at a major firm is closing in on $500/hour. Without knowing the type of firm to which the developer referred the OP, I don’t think you can give much of a guess about the rate.

[Lumpr]

I'd get a written invoice, plus ask him to put his opinion in writing (and send it with the same letter). Then pay it. That way, if there are later issues with the IRS contesting the cost basis etc, he'll be on the hook. That "insurance" would be worth the $150 already.

That's a fantastic advice . . . if the question is how to I turn a $150 legal bill into a $3,000 legal bill.

[willthrill81]

Ask him when to expect the bill and pay it.

He probably charges minimum of either 10 or 15 minutes for any interaction. So he’s probably got 3 billing entries for total of 30 or 45 minutes work. $150 seems about right.

Really good attorneys can easily bill $600/hour, so $150 for three interactions may be a very good deal.

$600 an hour is probably a specialist in a major metro area. From lawyers,com...

The hourly rate depends on each attorney's experience, operating expenses, and the location of his or her practice. In rural areas and small towns, lawyers tend to charge less, and fees in the range of $100 to $200 an hour for an experienced attorney are probably the norm. In major metropolitan areas, the norm is probably closer to $200 to $400 an hour. Lawyers with expertise in specialized areas may charge much more.

While those rates might be accurate for lawyers who generally work with individuals regarding personal and small-business issues, experienced specialist rates at major law firms are much, much higher. A first-year associate attorney at a major firm is closing in on $500/hour. Without knowing the type of firm to which the developer referred the OP, I don’t think you can give much of a guess about the rate.

Right. I have a family member who is a very well experienced plaintiff's attorney in a VLCOL area and charges about $600/hr. if he's not working on a contingency basis.

[bck63]

OK, I do have one thought, above and beyond "just pay him."

1) If you have not received a written bill... either on paper or as an email... and if you feel sure that you and the lawyer think the thing is over, you asked a question, you got your answer... it would be completely appropriate to ask politely "when should I expect to receive a bill for this?"

2) Nothing about your story makes me suspect your lawyer of anything but being attentive to business.

But when you do pay, make sure that when they receive the payment in whatever form, at the same time they receive the invoice number ("invoice dated mm/dd/yyyy" if you can't find an "invoice number'), and a short description like "Payment in full for completed phone consultation on mm/dd/yyyy about cost basis for land sale."

Just paypal it to him.

[schooner]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

[Gill]

Another consideration that has some relevance is the sale price of $500,000 you realized on the sale of this land as revealed in your initial post on Bogleheads. To receive a reliable opinion of a tax attorney on the basis of this property and only receive a bill for $150 was your lucky day. Get the check in the mail and don’t look back.
Gill

[Gill]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

Come on now. Most people deal with professionals and businesses every day and assume they’ll be charged a reasonable fee without it being stated up front.
Gill

[JoeRetire]

Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

Imagine going to get your haircut and expecting it to be free, just because you don't see a price list.

[schooner]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

Come on now. Most people deal with professionals and businesses every day and assume they’ll be charged a reasonable fee without it being stated up front.
Gill

Man, I said he should pay the bill and you’re jumping over me too

wasn’t this entire forum created to honor Bogle- the biggest critic of hidden/unknown fees in the mutual fund industry?

Pay what you owe, but you still have a right to ask for more clarity next time

[willthrill81]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

Please let me know when you find a hospital with a price list.

[schooner]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

Please let me know when you find a hospital with a price list.

Ha, sounds like you might not know anyone without insurance. Unless it’s a catastrophic injury, you’re going to know/pay before you get through that waiting room door

[JoeRetire]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

Please let me know when you find a hospital with a price list.

https://www.hhs.gov/about/news/2019/11/ ... icans.html

[randomguy]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

Come on now. Most people deal with professionals and businesses every day and assume they’ll be charged a reasonable fee without it being stated up front.
Gill

Man, I said he should pay the bill and you’re jumping over me too

wasn’t this entire forum created to honor Bogle- the biggest critic of hidden/unknown fees in the mutual fund industry?

Pay what you owe, but you still have a right to ask for more clarity next time

Of course. But the OP could have asked. They chose not to. I am sure the lawyer would have said I bill at 300/hour with a 15 min minimum. This case will likely take about 30 mins. You could say the lawyer should volunteer that info but that doesn't excuse not asking if you care. No reasonable person expects lawyers to work for free.

[schooner]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

Come on now. Most people deal with professionals and businesses every day and assume they’ll be charged a reasonable fee without it being stated up front.
Gill

Man, I said he should pay the bill and you’re jumping over me too

wasn’t this entire forum created to honor Bogle- the biggest critic of hidden/unknown fees in the mutual fund industry?

Pay what you owe, but you still have a right to ask for more clarity next time

Of course. But the OP could have asked. They chose not to. I am sure the lawyer would have said I bill at 300/hour with a 15 min minimum. This case will likely take about 30 mins. You could say the lawyer should volunteer that info but that doesn't excuse not asking if you care. No reasonable person expects lawyers to work for free.

Haha, totally agree, but what if that lawyer was actually a financial advisor that shall remain nameless...I have a feeling Bogleheads would freak out

[willthrill81]

you should pay. But this is why a lot of folks dislike lawyers. Imagine going to get your haircut and there’s no price list and no idea when your haircut even begins. Or whether they will charge you a fixed price or by how long they cut your hair.

You owe him. But how many precious seconds would it have taken him to say, “I charge $X/hour” when you first called him.

Come on now. Most people deal with professionals and businesses every day and assume they’ll be charged a reasonable fee without it being stated up front.
Gill

Man, I said he should pay the bill and you’re jumping over me too

wasn’t this entire forum created to honor Bogle- the biggest critic of hidden/unknown fees in the mutual fund industry?

Pay what you owe, but you still have a right to ask for more clarity next time

Of course. But the OP could have asked. They chose not to. I am sure the lawyer would have said I bill at 300/hour with a 15 min minimum. This case will likely take about 30 mins. You could say the lawyer should volunteer that info but that doesn't excuse not asking if you care. No reasonable person expects lawyers to work for free.

Haha, totally agree, but what if that lawyer was actually a financial advisor that shall remain nameless...I have a feeling Bogleheads would freak out

I would never expect to ask for repeated advice from a financial salesperson advisor for free.

[randomguy]

Haha, totally agree, but what if that lawyer was actually a financial advisor that shall remain nameless...I have a feeling Bogleheads would freak out

I am willing to bet that if you said I talked to Rick Ferri on the phone for 5 mins about a question I had and now he is sticking me with a 150 dollar bill, most people would say you owe them the money. Now a bunch of them would say, don't ask Rick quesitons, hit up the board for free advice.

Personally I think this 150 bucks is a cheap lesson for the OP in learning to always ask for prices before buying stuff. If you go to the restaurant and order the unpriced special, you don't get to complain about the price when the bill comes. The time to ask is before hand.

[schooner]

Haha, totally agree, but what if that lawyer was actually a financial advisor that shall remain nameless...I have a feeling Bogleheads would freak out

I am willing to bet that if you said I talked to Rick Ferri on the phone for 5 mins about a question I had and now he is sticking me with a 150 dollar bill, most people would say you owe them the money. Now a bunch of them would say, don't ask Rick quesitons, hit up the board for free advice.

Personally I think this 150 bucks is a cheap lesson for the OP in learning to always ask for prices before buying stuff. If you go to the restaurant and order the unpriced special, you don't get to complain about the price when the bill comes. The time to ask is before hand.

Yeah, I bet Rick wouldn’t do that because he’s a standup guy

[HueyLD]

It appears that too many people nowadays expect to get freebies for no good reasons. But those same people are not willing to work for free themselves.

As a result, I noticed a lot of repair shops put up signs saying that a minimum service charge of $xx is required before they even touch an item. And the same with people not showing up for appointments resulting in “no show” fee of $40-$100 depending on the business. This is not a good trend for the betterment of our society.

A while back, a client was a no show twice in a week. I gave her a call and she claimed that she was too busy with work. Too busy to call to cancel at least 24 hours earlier and doing so repeatedly? So, I told her to never make another appointment with me again because she had been dropped from my client list.

[Ben10]

If you seek legal advice from an attorney, and received advice, you should expect to (and should, in fact) pay for it.

[Shallowpockets]

If you seek legal advice from an attorney, and received advice, you should expect to (and should, in fact) pay for it.

Would that only be for attorneys? Soliciting advice from anyone about their field of knowledge, would that be billable? If I work at Walmart and am asked if such a toy is available yet and how I might actually get it, when to shop, etc, should it be billable? Or is this example ludicrous because it’s only a Walmart employee?
So far people have mentioned the attorney and car mechanics and doctors. How far can this net spread out to include all of us with knowledge that are asked for advice based on that knowledge.
Might remember that $150 for 15 minutes, or even an hour, is 10x the proposed federal minimum wage. So although billing might be OK, that amount seems outlandish.

[JoeRetire]

Would that only be for attorneys? Soliciting advice from anyone about their field of knowledge, would that be billable? If I work at Walmart and am asked if such a toy is available yet and how I might actually get it, when to shop, etc, should it be billable? Or is this example ludicrous because it’s only a Walmart employee?
So far people have mentioned the attorney and car mechanics and doctors. How far can this net spread out to include all of us with knowledge that are asked for advice based on that knowledge.

Let's not get silly here.

Anyone who makes a living charging by the hour for their professional advice deserves to get paid. When Walmart starts giving out paid advice by the hour, you should not expect to get it for free.

Might remember that $150 for 15 minutes, or even an hour, is 10x the proposed federal minimum wage. So although billing might be OK, that amount seems outlandish.

Do you think attorneys should be paid minimum wage?

[Jags4186]

If you seek legal advice from an attorney, and received advice, you should expect to (and should, in fact) pay for it.

Would that only be for attorneys? Soliciting advice from anyone about their field of knowledge, would that be billable? If I work at Walmart and am asked if such a toy is available yet and how I might actually get it, when to shop, etc, should it be billable? Or is this example ludicrous because it’s only a Walmart employee?
So far people have mentioned the attorney and car mechanics and doctors. How far can this net spread out to include all of us with knowledge that are asked for advice based on that knowledge.
Might remember that $150 for 15 minutes, or even an hour, is 10x the proposed federal minimum wage. So although billing might be OK, that amount seems outlandish.

This is ludicrous. If you work for Walmart you’re being paid by the hour to answer all those questions. You’re also paid to stand there and do absolutely nothing if that’s what they want you to do. If you are a professional you only get paid when you are doing something.

You are absolutely within your prerogative to give advice for free. I’d assume though if you rented and office, hung a sign, and declared yourself open for business, and your lively hood depended on that business you wouldn’t just be handing out advice and reviewing documents for free for anyone who walks in or calls.

And, it seems everyone has forgotten this wasn’t just a 5 minute phone call. This is a phone call, transmittal of documents for attorney review, and having an opinion rendered. If it was “so simple” for the OP to do it himself, he would have done it himself.

[Miakis]

Ah, my favorite type of client.

Are you friends with this attorney? Are you his mother? Why wouldn't he bill you?

Why did you call a professional on the phone to ask a legal opinion if you didn't expect to be billed?

You think this attorney just accepts calls from strangers all day and gives out free legal advice? Is that supposed to be his business model?

[oldcomputerguy]

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