Do Legal Flat Fees Encourage Freeloading?

Updated September 1, 2022

When I posted this a dozen years ago, many lawyers feared flat fees because they assumed that freeloading clients would take advantage. But there are ways to guard against that with some of the information provided in The Legal ClauseIt . But there’s another issue too: lawyers also exaggerate the freeloader problem as I realized from my experience with unlimited movie popcorn that I share below.

Surely you’re familiar with the freeloader, that ne’er do well who stands as an obstacle to change in the practice of law. The freeloader is the reason why most lawyers won’t offer free consultations (those freeloading prospects just want advice, they don’t want to pay to hire me) or comp short phone calls (what happens if a freeloading client keeps calling and calling?) or charge flat fees (my client wants me to organize all his paper work for discovery which is going to break the flat fee budget). Does the problem of the freeloader doom us to adherence to practices like the billable hour or nickel and diming clients?

Not necessarily. I say, fear ye not the freeloader, for I have been one. And as I’ll explain from my own experience, the freeloader problem is not as onerous as it seems.

So let me share my freeloading experience. This past weekend, I took my ten-year old daugher, her sister and eight friends to the movies to celebrate my ten year old’s birthday. With the size of our group, I had decided to take advantage of the “bottomless popcorn” offer- a large popcorn for $6.95 plus unlimited refills. I’d brought plastic baggies to make sharing easier. I bought the first bucket right after the tickets, and distributed small portions to each of the girls when we entered the theatre. I returned for the second bucket five minutes later and though the cashier gave me a strange look, he didn’t make any remarks. The second bucket was gone a half hour into the movies, so I went back for a third. This time the clerk did say something like “you must like popcorn,” but that was about it. The third bucket lasted for the rest of the movies and in fact, half was left over at the end, so we took it back to the house.

I imagine that when movie theatres first came up with the idea of bottomless popcorn buckets, they must have had some concerns that people would take advantage of the offer. But the truth is that it’s tough to eat all that popcorn. Years ago, when the bottomless bucket was first offered, I bought it, but never even made it through the first bucket. I never again bothered to get the bottomless bucket until last night. Even though nothing limited me from getting as many buckets as I wanted, I still felt like a freeloader, taking advantage of a good deal.

That’s the first lesson of the freeloader. Though we’ve all had bad experiences with clients, I believe that the majority actually don’t want to impose upon our time. If we allow clients to contact us by email or phone gratis, as much as they want, my guess is that most will exercise some self-restraint.

Second, how frequent is your freeloader problem and are those problems offset by any positives? As I mentioned, I’ve only twice purchased a bottomless bucket of popcorn over the past five years at the movies – and the first time, I never even made it to the second bucket. I have to wonder how many people actually buy the bottomless bucket and replenish it three to four times. And even if they do, it’s probably for the same reason that I did: to accommodate a large group. In that situation, the theatre gains benefits as well, in the form of added ticket sales, not to mention the three drinks that I purchased as well. When you wind up “giving away” certain services to clients — perhaps spending more time than intended on a flat fee — perhaps the fee is generous enough to justify the added effort. If you offer free consultations — even a limited number of them per week– maybe those clients won’t hire you, but they might send other business your way.

So, is my popcorn analogy appropriate for the issues that lawyers face with freeloaders? After all, popcorn I realize costs less than a lawyer’s time and theatres overcharge for it anyway. Still, I’ve read that for theatres, popcorn and refreshments are their profit center; they don’t make much money off of the movies. So cutting the amount of popcorn sold does cut into profit, just as giving away too many hours to freeloaders can hurt a lawyer’s bottom line.

I also don’t mean to make light of the freeloader conundrum. Too many freeloading clients (or partners or employees, for that matter) can weigh down your business. But before you reject a new approach because of a concern about the freeloader problem, take the time to explore whether your freeloader issue is real or hypothetical. As a one time freeloader myself, I can tell you that we’re not as scary as we may seem.