For me, and, I’m sure, for many New Hampshire lawyers, billing clients for the legal and tax work you perform for them can be as difficult as the work itself. In the paragraphs below, I’ll suggest guidelines for this billing. However, these guidelines are based on my own practice in forming LLCs for my clients and for other legal and tax services I provide to them. They may not work for lawyers in other fields of practice or even for other LLC lawyers. And in some circumstances, they won’t make sense for my own clients.
Step one with clients who contact you to form LLCs is to learn from them the nature of the business they plan to engage in, the number and background of their partners, the tax issues inherent in their business, and other potentially significant matters potentially relevant to your work for them.
The above process by itself may well require an hour or more of phone calls and exchanges of emails between you and your clients, and it may well make clear to you that, in connection with the LLC work you handle for them, your clients will need significant non-LLC services — which you may or may not be competent to handle for them. These may include, for example, estate planning services; the drafting of agreements concerning real property sales or intellectual property licenses; and, unless you possess federal and New Hampshire tax expertise, tax services.
Once you’ve completed the above process, you should inform your clients about the hourly rate you propose for the work you propose to do for them. In addition, on the basis of your discussions with them, you should outline for them all of the various tasks you propose to perform for them; the number of hours of work you estimate you will need in order to perform these tasks competently; and the total amount you are likely to charge them for this work.
In providing the above advice to your clients, you should also advise them that the above estimate is merely an estimate, and that, as you proceed in your work for them, you may find that, in order to serve them competently, you must do significantly more work for them than you and they could have foreseen when you began that work. And you should advise them that in these circumstances, you will be happy to work with them to find, if possible, a work- around to limit the cost of your work for them. The broad point here is that the invoice you ultimately provide to them for your services should never surprise them.
In my view, you owe your clients the above estimate, since, without it, they will presumably be unable to decide on reasonable grounds whether to hire you for their work or whether, instead, they should seek another lawyer who can competently perform the services they need for a lesser fee than yours.
Once your clients agree verbally with the above arrangements, you should, if appropriate, formalize these arrangements in a written document that lawyers typically call an “engagement letter” — i.e., a personal service agreement between you and them.