My friend in the insurance business sent me last week an article from the Wall Street Journal which generally came out favorably towards online Will preparation systems. Usually I would have gone on a rant as to the ignorance of people who believe they can get an estate plan done over the internet for $15, but at that particular moment I instead found myself in an ethical dilemma.
The reason is that by and large will and trust preparation is simply not a good profit center in my practice for couples in the $100,000 – $300,000 income bracket, and with assets less than than a few million dollars (including the house and 401(k)’s). This is because those folks, generally couples in their 30′s to 50′s, simply are not going to (by and large) pay $3,500 or more (depending on complexity) to have their Wills, Trusts, and Advanced Directives drafted. But I know from experience that such a couple is going to come into my office for a first interview and talk to me for an hour or more about their assets and issues and ask a ton of questions; and then I’ll draft their documents, and the couple will want to come in again and review and ask more questions and make changes, and then I’ll have to draft the documents over again; perhaps another telephone conversation, and another draft of the corrected documents, and then the execution ceremony, where things perhaps need to get changed again.
In short, a couple in the middle income market really does need sound legal advice with respect to setting up their affairs, but I cannot spend the time to do this and make a profit for myself at the price point these clients are willing to pay. I also have rent to pay and a family to support. I just can’t do it. If I rush the job and give out documents which are poorly worded and filled with typographical errors (and have the corrections made in pen and ink before execution, which looks ugly), and give the clients short and abrupt answers to their questions and give the impression that I want them to leave as quickly as possible (which I am), they just will not be satisfied clients. I’ve done this long enough to know this for sure. For better or worse, people often cannot distinguish between “price” and “value.” Sure, many couples do understand ‘you get what you pay for,’ and understand the importance for their families of getting their affairs in order properly, and genuinely understand and are agreeable when I explain my pricing structure. I enjoy working with these clients, because not only am I certain to make a profit for myself, but more importantly I can now focus on them and their needs and spend the time to do the work properly and professionally. This is how I want to run my profession, and these couples will absolutely be satisfied customers and come back to me over the years time and time again. But a lot of people want a fixed price based on what they believe a few dozen pages of typewritten paper should cost. I understand that; I want to know up front too how much a painter is going to charge to paint my apartment. If the guy told me “it depends on how long it takes,” no way in the world would I agree to that. So I understand why couples are reluctant to engage an attorney before knowing upfront how much it’s going to cost. Fair enough.
But from my standpoint, since I’m probably not going to make a profit anyway, I’m not really so put-off that people want to do their estate planning using LegalZoom or Suze Orman or LegacyWriter or Build A Will. Those clients are just not a good fit for my practice, and vice-versa. I provide legal advice and counsel, not pre-printed forms which are ‘fill in the blanks.’
And the harsh and honest truth is that when it is discovered, almost always when it’s too late, that either the documents are defective (because New York is quite strict on adhering to the formalities of Will executions), or the documents don’t meet the clients’ needs (because there was no attorney to have an in-depth conversation to flush out those needs in the first place), or significant tax and probate issues were created, or usually ‘all of the above’ . . . the honest truth is that I profit much, much more by straightening out someone’s affairs after death or incapacity. And at that point, there’s no negotiation involved: the family pays my full hourly rate with a minimum billing increment of two-tenths of an hour. Legal fees and taxes and probate costs and accounting costs can skyrocket, and the family suffers because mom and dad chose the wrong place to be penny wise and pound foolish, or were led astray by television personalities who where either ignorant themselves, or worse, intentionally mislead people to line their own pockets. It’s a really sad state of affairs.
But the bottom line is that I am always honest with people, in person and here on my blog, and I am honest with your referrals as well when you guys send clients over to me. You get what you pay for; that’s a truism in life that most people understand. Yes every now and then you can find a ‘steal’ on a 42″ Sony AQUOS, or the like, but generally if you pay $7 for a haircut on 14th Street, you come out with a $7 haircut. That’s just the way it is. So my ethical dilemma involves telling people the truth as to being mislead and wrong as to being able to get their wills done over the internet for a few dollars, or not saying anything and waiting to scoop up the profits by cleaning up the mess afterwards. But, I don’t live my life that way, so I’ll tell you please, help me help your clients understand that estate planning is just not the area where they want to bargain shop.