Tara (00:57):
Welcome back and thank you for joining us at the Art of Estate Planning Podcast. This is episode 22, Paperclips, zombie clients & Australia Post – protect yourself against an estate planning lawyer's worst nightmare! Carrie, do you like how creative I got with that title?
Carrie (01:15):
Wasted on law, Tara Lucke, wasted on law!
Tara (01:18):
I might've had some help from chatGPT, I suspect I did it last year, but...
Carrie (01:23):
As creative as the heading is, I'm actually excited to talk about this. I have so much pain and suffering that comes from these issues that I'm ready.
Tara (01:32):
And look, the fun thing about this topic, right, is that there are just so many stories of things going pear shaped in the most crazy and unexpected ways that have inspired us creating our new cost agreement precedent. So I guess the very first thing I will just say, and this won't be a surprise to anyone because you and I have been talking about this in a lot of our past episodes, anything to do with pricing, we've given it a little plug. But in November, 2024, we released our estate planning pricing toolkit, and it's got a whole lot of resources in that. But I guess the headline resource that comes within the toolkit is our cost agreement clauses. So Carrie, you spent a lot of time, hours and hours and hours drafting up clauses to try and protect estate planning lawyers for the things that can go pear shaped on a matter.
(02:36):
And the idea is that you drop and drag our clauses that we've put into your existing compliant cost agreement and disclosure templates from your law society and really just to try and put you on the front foot when things go wrong on your estate planning matters. So we're going to talk a little bit about the kinds of things we cover in those cost agreement clauses and yeah, just some of the things are really obvious, others are not so obvious, and I think that's a good thing if it hasn't happened to you. But we have seen these things go wrong and they've been a disaster, and so we're trying to really just get all of our estate planning lawyers in our community on the front foot and protected.
Carrie (03:22):
So I'm so ready to talk about this today because I had one of these horrible scenarios happen recently, and because I'd updated the costs agreement, I was ready. And I say, I mean we're going to be talking a little bit about defending estate planning lawyers here, but obviously by doing that we are actually doing the right thing by clients as well. So when we're talking about this, this is a combination of making sure that we are protecting our practise so that we can go on and continue to serve our clients in a way that is right for them. So that's why I want to preface this conversation. When we went to design the cost agreement, we wanted to think about all of those horrible scenarios that happen with clients that make your job harder to do your job well. And this is everything from the legal stuff to the practical stuff.
(04:10):
Now today we're going to be focusing on the practical. We've talked a fair bit about the legal stuff before, but the practical stuff I find is the stuff that really hurts and it really makes the job not fun. So over the break I had a client return documents and they were stapled and they had obviously unstaple them to scan them and then rest stapled them. So I then had to explain the usual about how the court don't like that is my technical term, but because I had in my cost agreement that if there's kind of issues with the documents that, sorry, and I should say too, normally I would help clients sign the documents, but they were going away overseas and we didn't have time to see them. I made that very clear from day one that we would need to sign some documents before they go if they wanted them to, and I didn't have any meeting time available, so they would have to get them signed themselves. And yes, they had a staple that was removed. And so then I was able to say, guys, this is the problem. And then to fix this issue, this is what the fix is. So this is particularly important I think when we talk about this issue because this is, obviously, I'm talking about staples here, but I could tell you that it applies equally to paper clips and to bull clips as well. So I'm not discriminating between problematic pieces of metal.
Tara (05:31):
Don't let anyone tell you, being an estate planning lawyer isn't glamorous.
Carrie (05:35):
What would a estate planning lawyer is afraid of nothing except fixation methods that aren't staples done correctly. So I think that we talk about these things if your price point is designed to be lower, because that's what you're comfortable with and that's what you're charging. Okay, so let's just say you do a simple will for say $500 or $600, okay? Simple will by the time you add in a mess up with postage, let's do the maths. Okay? So express post is about $15 and the actual envelope depends on whether you buy bulk or not. Let's just say 10 to make it easy, okay, that's 25, okay? Then it's the pain and suffering of having to print the documents out, go down to the post. So it's the time and the product in doing that. Okay, so let's wind that up to 50, and then it's the emails backwards and forwards about the stuff up as well, especially if the client doesn't believe you that it's a problem, which is always my favourite issue when they don't say, oh, it's fine, and like, no, no it's not.
(06:31):
So add on another 50 to a hundred dollars, alright? Your margin shrinks every time this goes down, which means that if that keeps happening and you are not making enough money to cover the costs, your prices are going to have to go up and everybody suffers then for the sake of a couple of people not kind of doing the right thing, so to speak. So we're talking about these items. The reason we're saying is that that eating away at your margin does have a flow on effect for the rest of your business and therefore the rest of your clients. So when we designed the cost agreement, we made it absolutely clear that if you return documents to us in their damaged, and we do explain that in certain ways in the cost agreement term too, not giving away the intellectual property for free, but there is kind of a cost associated with reissuing the documents or resigning the documents because should you have to bear that cost.
(07:26):
When we talk about this though, what I want to make it absolutely clear is that this is the base position allowing you to do that, but doesn't mean that you have to do that. So if for example, the client has instead paid a premium for their estate plan, they're an exceptional client, everything else has been smooth, you want to help them out, you probably don't mind bearing the 50 to a hundred dollars pocket cost of getting things reissued. So when we're talking about the terms in our costs agreement, everything that we're saying is to give you the baseline protection of if you need to charge money for the additional costs associated with doing something extra. Doesn't mean you have to, and also doesn't mean you should as well, because some of the issues that we raise in the cost agreement are ethical issues. We have in the cost agreements, some user notes that make it really clear that in some circumstances you should be reaching out to your ethics committee at your professional advisory body or even sometimes your insurer to talk to them about should I actually do this? Yes, I've got the power to, and yes, I think I should because of X, Y, Z, but really should I? So I think that when we're talking about paper clips and full clips and staples being incorrect, the cost agreement is not designed to be used as a weapon that gets to clients. It's a shield for you to be able to help your clients more effectively in the future.
Tara (08:48):
Totally. And I just think being clear with your communication is really kind setting the expectation. I mean, who's going to read it? I don't know. But if they do, setting the expectation upfront for all of this, or even just emboldening you as the lawyer to be like, oh, well this is covered in our cost agreement. And so I feel confident enough to have the conversation around yet this hasn't gone along the normal workflow and there's going to be costs. Or I mean, Carrie, you said the ethics thing. The ethics thing, ethics issue arise. I think over the holidays we had someone in the TT precedents club say they're acting for a couple out of the blue, the husband emails the lawyer and says, oh, I want to include this extra clause just in my will that if my wife enters in a romantic relationship after I die.
(09:46):
Instead, everything's going to charity. And obviously the lawyer's like, okay, we do not have mirror image instructions here. This is an ethics issue, and I'm pretty sure the ethics committee from the law Society will say, you can't act for either of them anymore. And in our cost agreement, we've got clauses saying exactly that. When you're a couple, when we're acting for you, your interests must be completely aligned. There must be total transparency of communication between you and if that stops happening, we will have to stop acting for both of you. You will have to go and get separate representation. There will be costs for all of this. And so I imagine it's not going to be a great conversation with the client, but at least if they start bearing off or saying, oh, you are not doing the right thing, you're like, well, I'm acting on the guidance of the ethics committee and it was in our cost agreement from the very beginning. I'm completely covered here.
Carrie (10:49):
It's funny you say that, Tara, I work with a few advisors and some of them I've been working with for a long time and one of them had never really understood why I make it really clear about who I'm acting for in the meeting when it's a joint client scenario, and I have a bit of a spiel about it, and it sounds, I try to make it as lighthearted as possible, but he said we had a scenario with one of his clients where we were in the middle of estate planning and the husband and wife couldn't agree on something. They both had children from previous relationships and it ended up causing them to separate. And so I then had to say, I can't act for either of you because they came back six months later, one of them said, I still want to continue, but I've separated from X, Y, Z.
(11:29):
And I said, I'm sorry, I can't help and this is why. And so he was actually really appreciative. He said, yes, you're right. Clear communication is kind to the clients. So I think that when we talk about this, you might be thinking, oh, that's never happened to me and good lord, I hope it never does. But certainly if it does, we want to give you the baseline protection inco agreement. And then again, as I said, it's everywhere across our documents when it's an ethical issue, please reach out to the resources that you have available through your professional memberships and through your professional bodies.
Tara (12:03):
They're there to help. Yeah. Another thing, like you said before, this is about maintaining profitability on your matters. And I love you've done a lot of work in their carry around timelines for when people have to deliver their particular things. So how long until the quote expires? How many times will you follow up on the quote once you get instructions, how long until they have to provide their full and complete instructions or the quote expires all of this stuff so it's really clear.
Carrie (12:39):
Yeah, I think that issue when it comes to couples is so salient for estate planners because we do see a lot of husbands and wives and reality happens. We hope it never happens to you, but certainly we want you to have the protection if something does happen. Tara, what if, I think too, that part about the timeframe, I just want to come back to that. I always used to be under this assumption that when you ran say a trust account and people put money into your trust account, that they all of a sudden become great at being quick with things because already kind of invested the financial. I don't think that's correct. So as you know, I've recently changed and merged my law firm with someone else, so to speak, and going through some of the follow-ups, and I think people are just, it's a slow burn no matter how your firm operates.
(13:23):
People are always going to be humans and be bad at doing things. And I've seen situations where they'll want to come back to something two years later and in two years time you've hired new staff, you've got a new office, your costs have gone up, so you don't want to be tied to a price that you gave that they accepted, they signed the cost agreement then just never kind of came to you. You don't want to be tied to that same cost if that's not what it's costing you to run an estate planning matter anymore. So what was it not last year, the year before 7% increase just with CPI do you want to be stuck with 7% less because that's what you're doing, unless you've kind of got some sort of expiry on the terms of your cost agreement. So people don't do estate planning quickly, don't always do estate planning quickly.
(14:08):
So we want to make sure that when life happens, it doesn't affect your margin. The other thing I wanted to talk about as well, and this might be something that is a bit of a pain point for people, is ye oldie changes to documents. Oh, I forgot my brother had a middle name. I dunno how people forget that. They forget to tell you their names. I do everything I can to make sure I have, when I send out post-meeting kind of lists everybody's full legal name and address. I say that very clearly, but the number of people that will just send you the first name and last name and then said, oh, I didn't think the middle name was important. And then you go to sign the documents and then you've got to redo it all. So I think that that's something that again, is a really big profit eater because when you draught up documents, it's not just the drafting, it's the going back and editing, going back and editing obviously has a time cost, but it also has a risk cost.
(15:09):
Manual editing increases the risk of making errors. So when we talk about that kind of changing, there might be people listening going, oh, what are these women talking about? It's just easy. Just put the bloody middle name in. Okay, mate, you go and do that, but you spell that middle name wrong because you've been hurried in the meeting trying to update it, that's on you. So you want to make sure that your costing documents cover that. And then also things like if a client just changes their mind about who they want to a point at the 11th hour and you have to go and make changes to the documents after you've signed everything up and they change their mind a week later. So I think when we're talking about changes, they might seem small, but there is a cost associated with that, whether it be an actual practical cost or a risk cost.
Tara (15:56):
Or they forgot to disclose something important like an asset overseas, self-managed super fund...
Carrie (16:03):
Secret child, all those favourite ones. So when we're talking about this, as I said, the cost, and it might seem simple, there is a cost associated with it. But again, it doesn't mean you have to charge it. You have the discretion, but you've got to start with having the ability under your cost agreement and then you get to decide if they're a good client, if it's a small change, if it's X, y, z, you get the ability to make that choice. But I had a lady in a meeting just the other day, I stress tested her in the planning meeting about adding an extra backup and she said she didn't want to do it. And then when I went through the document with her on Monday, she's like, oh, actually I do want to add that back up. And because of the ways the Queensland power of attorney acts, we would have to do a whole new document.
(16:47):
And I was like, okay, well we can do a whole new document, but here's the extra cost to doing it or we can do this. So it gives me that ability to do that because it wasn't my fault. I gave her all the preconditions and warnings in that first meeting, have to totally redraft that power of attorney. And I'm not going to do it there on the fly in the meeting because getting a power of attorney wrong is a big, big. So when we talk about it, there is a very, very real consideration here.
Tara (17:14):
I mean, I also like what we've done in the cost agreement around the scope of work because the ring fencing what's in and what's out, and most importantly, what you are liable for is really important. And with estate planning, it sounds simple, just the will and the power of attorney and you're good to go, but actually there's a whole heap of these peripheral issues. Are you responsible, maybe you've updated the B dbn or told them how to update it, but are you responsible for lodging it and making sure the super fund has accepted the BDBN? What about land tax advice on an asset going into a testamentary trust? Is that on you getting the attorneys to sign the acceptances and follow all of them up? What's in and what's out? And I mean, I don't care what you decide to do, I just think it's really important that you think about it, make a decision, and then communicate that clearly with the client. Because I feel like I know traditionally when I used to practise with clients, we didn't really ringfence a lot of those issues. And potentially there's exposure.
Carrie (18:30):
That's actually really important. Tara, we talked about this in, I think it might've been in the TT priesthoods club, this issue now we have with super funds using that separate part. It's like a letter A, not the not letter A one. It's two different parts of the super law. You'll be able to remember it. She's better with super law than I am, but it's not a traditional BDBN. And so there is this position now we are in with estate planning where we might fill out what we think is the BDBN form, but the actual terms of that superannuations funds deed say that it's not binding. They have ultimate discretion. So are you going to go through the terms of that superfund's deed and read it word by word? If you're not, you need to make the client aware that you are not going to be doing that.
Tara (19:17):
Yeah, I think you're talking about 59 1 sub A versus 59 1, capital A.
Carrie (19:27):
That's right. Yeah. If anyone listening, that's the areas, but they're calling it a non lapsing nomination. I see is probably the terminology they're using now to get around the kind of lapsing requirement, but doesn't necessarily mean that they're binding it unless the terms of that super funds deed say that they find it binding. There was a case I read about how there was this ultimate discretion to the trustee that if any of these circumstances had changed, they could basically not follow the nomination.
Tara (19:57):
Yeah. So Carrie, what about clients requesting word copies of their documents so they can just pop in a few changes?
Carrie (20:04):
Just pop in. Oh, it'll just be easier for me to make changes. Alright, mate, go and do it. No. Yeah, it actually happens probably not as often as sometimes I'd like to have the fight, I think, but certainly often enough that it's a problem, particularly where your client is another lawyer. Oh, I love other lawyers as clients. My three most challenging clients, teachers, engineers and lawyers, they're the ones that want to get in. They're the grammar. They're absolutely cross your spelling and grammar. They're sometimes the best clients for your precedent. They will pull out of it any error that you've done and you will learn the most on those matters that you ever have. But they're also the most in ways that make your job more difficult sometimes. So when clients are asking for Word documents, you don't want to give out your Word document because then what are they going to do with it?
(20:56):
And then it'll have potentially be on your back saying, oh, Tara Lucke helped me prepare this, but they went and did changes after you've done everything that aren't your changes. I mean, I know people can use OCR and create their own document, good on 'em. If they're that committed to it, go and do it. But any document that leaves your office should really be a PDF so that that's what left your office. Again, if you are the sort of person that wants to give the word document up, that's up to you. But have it in your cost agreement that you don't have to if you don't want to.
Tara (21:27):
Yeah, I mean I just like that it's in the cost agreement. You can just say, sorry, it's not allowed in our terms and blame it on the law society or whoever. But you are like, sorry, it just says that I can't do it. And I think Carrie your clause also says if you go rogue and OCR and amend this document, we are not responsible for it. You really express about where our responsibility ends.
Carrie (21:55):
Had the pain and suffering, Tara, that's why I've had that happen where someone has OCR to document and then gone in and changed it themselves. So sometimes, but I think too, when you say who to blame, I actually think I've talked to this about, I think I've talked to someone at LEXION about this, they don't like 'em going out either. So when we talk about those documents, it's not blaming anybody. We're saying, this is not something that I'm encouraged to do by the people that allow me to continue to work as a lawyer. So when we talk about that, it's actually something that's protecting you, but again, protecting the client because if they go on OCR and they make a small change that has a dramatic effect. I mean, we have one in the moment. At the moment, we've got to question, we're going to be talking about one client that wants to limit all the investment powers of the testamentary trust so that they can only go into a SX shares and one other type of investment. I mean, you've got to be able to explain yourself down the track. So if you are letting the client go and amend them, if they go make some small change and it has a dramatic effect for the beneficiaries, you want to be able to cover your behind.
Tara (22:59):
And Carrie, that's a really good example too, because you've put in a clause in the cost agreement terms, which are like when you accept this quote, you are accepting that it has been prepared factoring in our standard terms. And if you want to customise those standard terms, then there will be additional costs. And if you think that you might be wanting to customise them, let us know. We'll send the standard terms to you and you can tell us what you might want to change, and we will factor that into the price. So if you've got that in your cost agreement and then three quarters of the way through your matter, after you've prepared and sent out all the draughts, the client's starting to ask for all these cowboy changes, you can point to that clause and say, look, we can do it. It's going to cost more in accordance with your cost agreement. How badly do you want these changes?
Carrie (23:58):
Yeah, yeah. I think when we talk about those clients, I sometimes call them grave rulers, you can often pick them out early on. I have lots of touch points before we get to the point of drafting documents and even often sometimes before providing a cost, you can sometimes pick those people early on, but then there are people that surprise you. So for those surprises, we want to make sure that you are not on the hook for having to give advice on why this particular power is removed if you're not comfortable doing it at the price range that you quoted the client for.
Tara (24:29):
And look, we are giving these people a hard time. I actually love it, right? Because they're engaged, they're paying attention, they've read the document and they've thought deeply about their estate plans. So that's great, but unfortunately, it really can undermine the profitability of your matter as well if you don't reflect your pricing. And I think a lot of us feel self-conscious about having to change our pricing to meet those needs. And it's not necessarily about, oh, shutting down their ideas or disengaging. It's just about they want more than an off the shelf solution. I mean, I feel like funny saying off the shelf, everything is highly customised anyway, but they want super duper bespoke customised and the cost more.
Carrie (25:17):
It's like buying a car, Tara, when you buy a car, if you want more additions, if you want tailored changes, it costs you money.
Tara (25:23):
Yeah, exactly.
Carrie (25:25):
Yeah. I think too, with those changes, I just want to reiterate what you said. Those people will be your biggest challenges, but they'll also be your biggest teachers. So when we talk about those clients, don't be afraid. But on the other side of that same coin, people that are doing estate planning, you'll know what your love language is and what it's not. So if you are a person that doesn't, you're not comfortable or you just don't like doing those tailored changes, making sure that you'll be able to pull out of that matter if it's not something that you're comfortable doing. Everyone's got, most of us I know in the TT Precedents Club have been in law for some time, and so we know what we want to do. We want to make sure that we're setting you up for success in that same area. We don't want you to have to go branching out to areas that you're not comfortable. Obviously, we also want you to keep progressing as a practitioner, but we're not going to beat a dead horse, so to speak, if that's not an area you're interested in.
Tara (26:21):
So I mean, Carrie, you and I could talk all day about things that have gone wrong. Do you have a couple more examples that you really were itching to share?
Carrie (26:30):
I think just one more around, and again, this is a very practical thing, is about storage of documents. So in our cost agreement, I spend a fair bit of time about storage, both from a cost perspective, so the client understanding what your secure storage term cost is. Is it bundled in or is it a yearly fee or whatever else, or how long that is. So if you have bundled it in, how long you're agreeing to keep those documents for? Because storage of original documents is probably the biggest cost hidden cost of estate planning, but also the access to those documents. So what those terms are, and again, that comes back to that clear communication is kind. If the client ever wants to come and get those documents out, they'll know exactly what the process is so that when they do want to come out and they're like, you didn't tell me that I'd have to show all this stuff on X, Y, Z, you can be like, yes, I did here.
(27:28):
I think that when we talk about those things, people need to know what they're signing up for. You don't just sort of drop it at the end saying, here's the secure storage rules. You want to know that this was the process from the beginning. And I think that actually helps them understand too, when you go to talk about the storage later on in your subsequent meetings, you can be like, this is our secure storage terms. We're not hiding it. It's there. We've given it to you from day one. And I just find that then enables you to set the client up for the success in understanding what your actual terms are around storing those documents.
Tara (28:00):
And the risk to us as well. Taking on secure storage is a long-term commitment. So we've put a lot of detailed clauses in there around are we searching death notices and reaching out to the family or not? What happens if we can't track you down? Where will we send your documents perhaps after a certain amount of time? How long is it free and when will we start charging all of that stuff. So obviously this will be personal on what you decide to do with your firm, but we've got the prompts and the clauses in there so that you can customise it to reflect what you've decided from a business perspective. Because yeah, secure storage is not for the faint hearted, but it comes hand in hand with estate planning.
Carrie (28:53):
And again, just stressing what we've talked about before, just because you've got the ability to do something doesn't mean you do it. I mean, Queensland Law Society have made it pretty clear on one of their readings, which we also in our cost agreement user notes, we've given you all the things we've looked at, all the relevant resources so that you can go and check them yourself and see what you are comfortable with. But they've made it pretty clear that if you've got an original will, you kind of got to keep it for a hundred years. You can't really destroy it until that point. So just because you said we are only going to store it for seven years, let's say, and at the end of that seven years you can't burn it or anything like that. But that would be your point to say, okay, well the seven years has come up. You've done everything to try and contact these people. That's when you might reach out to your ethics team to say, what are my options here in your view? And what can I do? Can I back charge if I do later get ahold of them, et cetera, et cetera. So talking to your ethics team about what you actually should do.
Tara (29:47):
Yeah, so we've name dropped Queensland a few times, but these are national terms and we have looked through all the guidance nationally. That said, we do have a bit of responsibility on users to also be familiar with the guidance that maybe isn't publicly available for us to read in your home state, but this is not just a Queensland specific solution. Now, if listening to all of this is just making you want to break out in hives, we actually have a checklist that you can download for free. I'll put the link in the show notes. It's called the Top 15 Essential Clauses that we think you should include in your cost agreement if you are doing estate planning matters. So that is a really helpful resource. And what I recommend from here is that you go and download that checklist. You get out your cost agreement and just do an audit to see, have I dealt with this issue?
(30:44):
Am I exposed on this one? Am I covered? And after going through that audit, if you are not feeling confident about your cost agreement, then we have our estate planning pricing toolkit for you. So I'll put the link to that in the show notes as well. So as I mentioned in the estate planning pricing toolkit, we have our cost agreement clauses. We've been talking about them today, and it also has a lot more broad resources around pricing your estate planning surface. Not only do you get the cost agreement clauses that you can drop and drag into your cost agreement, we've got your break even calculator Now. That is a really magical spreadsheet that you can use to work out what is the minimum you should be charging for your matters so that you can earn the profit that you need so that you can pay all of your tax, your GST, your super contributions and still have enough profit remaining so that you can hit your desired take home pay amount.
(31:48):
We also have guidance and training on what we think you should be charging for your estate planning matters, comparing that against a whole range of law firms nationally. We've got training on what is value pricing, how to work out your prices using those principles of value pricing. And lastly, we have priceless templates that you can just plug and play. So they come in word and Canva format. You can customise what's included in the packages, throw your logo on, and then start using them with your clients. So our estate planning pricing toolkit is really meant to help you hit the ground running with your pricing in terms of both the client facing communication, getting the numbers right in your business, and also protecting yourself from a risk perspective.
Carrie (32:33):
Well, Tara, that's all I had on my list. Obviously there's a lot more in the cost agreement, but we're going to let you find out through the checklist and through the actual priesthood itself. But unless there's anything you want to add?
Tara (32:44):
No, we could talk about this all day. Couldn't we? I just want to say Carrie has spent so long putting this resource together, she has researched so deeply and thought in so much detail about all the things that can go wrong. I think you'll be really surprised about what's in there that you go, oh gosh, yep. Another thing, another thing. So it is really a really practical resource. We're really proud to have delivered this and brought this to our community. I don't think there's anything out there like it. And so the reason we keep talking about it is it's just so important to protect yourself. We want you all to be having joyful and abundant estate planning practises. If you've listened to our previous episodes, that because we go on about it all the time and protecting yourself from a pricing perspective is a big part of that.
(33:35):
So yeah, thanks for tuning in. Hopefully this episode was a little bit more interesting than it sounded from the advertisement and you got a little bit of value and some practical takeaways out of today.
