Call it a deposit; call it a retainer. Magnus doesn’t start work without one (except in rare circumstances beyond the scope of this post). We need money, we want money; importantly, other people want money. We learned, the hard way, that clients need to “show us the money.” One of our first cases blew up on us and the client pulled the plug after we started spending our money on his behalf (and we had little to spend in year 1). He cost us what seemed like a fortune at the time and we never heard from him again. We learned our lesson, and thereafter, we never undertook any client work that required spending our money. Our advance expenses include the mock jury recruiter, hotels or facilities and airline tickets, all of whom require a deposit! This has been standard operating procedure for us since that fateful experience. Imagine my surprise recently when we were getting geared up with a new client from one of the largest law firms in the country when he emailed me to say “We don’t pay retainers…we’ll pay you after we get your report.” Whoa! Red flag alert. We deal with all kinds of people who perform all kinds of work; everyone works by retainers and deposits. That’s the norm in our personal and professional world. But, “We’re not paying”??? In construction work, such as the roofers we’re dealing with at present, if we don’t pay, they don’t work. Or, if they do work and we don’t pay – they get a lien on the house. Our professional work is largely intangible. Once we send the report, we have zero leverage to obtain our fees; there’s nothing to hold back. For that reason, we try our best to be paid in full before sending the report, but much more importantly, we must get the initial deposit/retainer. I don’t think it is too much to ask and I am certain that the lawyer/law firm in question was paid a substantial initial payment when his client hired him/the firm. So, why not us?

No one works for free.  By definition, work is performed in exchange for compensation.  (The obvious exceptions, such as slavery, human trafficking, etc., are beyond the scope of this post.)  The fact that one of the largest law firms in the U.S.A., as well as its client, one of the largest corporations in the world, would refuse to pay a retainer to Magnus was quite shocking to David and me.  As David mentioned, we learned the hard way, way back in 1994, never to begin spending money on a client’s behalf absent receiving a retainer from the client.  We have a lot of “up front” expenses in every case we undertake and, just like everyone else, Magnus’ vendors require a retainer in order to begin their work on our clients’ behalf.  Why should Magnus be any different?  Why should Magnus fund its work on its own, instead of being retained by a huge corporation or law firm for our work?  Why should Magnus be placed in the position of acting as “the bank” for anyone?  Ironically, just as I finished reading David’s part of this post, I received an email from someone in the accounting department of the roofing company I hired to replace David’s and my roof.  The sole purpose of this email was to request payment of approximately 2/3rds of the total cost of the roof prior to commencement of the project?  Why?  Because the roofing company needs to buy materials, pay its employees, and cover other expenses on David’s and my behalf.  It is not difficult to imagine what would happen if I told the roofing company’s accounting person “No, I think I’ll just wait to pay for everything until the new roof is installed.”  Needless to say, I was relieved when David and I got the ubiquitous “We’ve decided to move in another direction” email from this potential client.  And, as a side note, you should have seen how fast I sent the check to the roofing company!  Now, let’s all get to work!

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