Sometimes we get so focused on the pennies that we lose track of the dollars (or even the thousands of dollars).

I’m a big advocate of fixed fees. We’ve been using them for years.

I know that fixed fees aren’t for every practice. Some lawyers can’t charge fixed fees due to the rules in their jurisdiction. Others aren’t comfortable with the concept, based on the nature of their practice.

Recently, one of our lawyers came back from a mediation freaking out about the mediator’s bill. The mediator had billed our client, as mediators usually do, on an hourly basis. That’s fine with me—I understand that it’s challenging to apply fixed fees to mediation (although I believe it can be done). The bill was a couple thousand dollars for the day (split between the parties).

The mediator then added about $25 as an expense for lunch (they had sandwiches delivered).

The client wrote a check for his share.

Our lawyer was bothered by the lunch charge, and so was the client. The lawyer didn’t like it because she felt that her client was buying her lunch, and that’s not something she would have normally let happen. The client was bothered because he was already spending a fortune, and the extra $25 didn’t help. Were they being rational? Does it matter?

The mediator recouped $25 in exchange for aggravating the lawyer who had suggested the mediator. She also annoyed the client. Smart billing practice? I think not.

We spend a bundle in time and money getting clients. For most mediators, that means wining and dining other lawyers. For the rest of us, it means building relationships with a range of professionals. When we have one of these relationships, it has a lifetime value that can be worth tens, if not hundreds, of thousands of dollars. Do we want to risk that relationship for $25?

Don’t risk your referral relationships for the price of a lunch. It’s not worth it. It’s not a smart business practice. You’d pay $25 for the meal if you could convince the referral source to go to lunch with you. Don’t worry about spending it in the course of your work—it’s money well spent.

If you feel compelled to recover the cost of the sandwiches, then build it into your hourly rate or your fixed fee. Don’t add it on to the bill. Don’t give your clients or referral sources any ammunition for getting irritated. It’s not worth it.

Don’t get so focused on the pennies that you lose sight of the dollars. Don’t nickel and dime your clients.