Counsellor’s management of money matters when working with fee paying clients

Literature Review

Financial planning is an important aspect of managing the counsellor’s practice (Baker, et al., 2016). Nevertheless, budgeting and financial management, including the management of fees, is usually an anathema for the professional counsellor (Baker, et al., 2016, p. 127). In particular, counsellors must design a strategy for day to day fiscal operations that take care of income, expenses and account (Baker, et al., 2016). As such, income in counselling practice usually comes from fees charged by the counsellor for providing his services (Baker, et al., 2016, p. 138). For counsellors who have fee paying clients, there are a number of important factors that become a part of their management of financial matters. These factors include contractual arrangements with clients, advance notification of the manner of payment of fees, the methods for recovery of fee in case of non-payment by the client, etc. Fee for the therapist may be described as follows:

“the basic parameter that defines the therapeutic relationship, differentiating it from social, romantic or other non-professional relationships (with money as) the boundary that defines the business aspect of therapeutic relationships” (Zur & Ofer, 2009, p. 86).

As per this definition, fee is a basic parameter that defines the relationship between the therapist and the client or the aspect that defines the business aspect of such therapeutic relationships. While fee is not the only parameter, it is undoubtedly one of the important parameters especially for private practitioners.

At the same time, within the field of counselling, fee has always been a controversial issue. However, Freud himself has accepted that the attitudes related to fee within the realm of psychiatry are misplaced. He described the therapist as someone who “has cast off false shame on these topics, by voluntarily telling them (the clients) the price at which he values his time” (Freud, 1913, p. 131). This is not to say that the counsellor should not treat those who are unable to afford the counsellor’s fee, but fee may be essential in effective psychotherapy (Freud, 1913).

Freud famously said: “"money matters are treated by civilized people in the same way as sexual matters-with the same inconsistency, prudishness and hypocrisy” (Freud, 1913, p. 131). According to Freud, the value placed on money is surrounded by powerful sexual factors. In the same way that people react to sex, with a prudishness and hypocrisy, people also react to issues of money (Freud, 1913). There is the same inconsistency in attitudes with respect to money as there is to sexual issues. The therapist on the other hand is trained to deal with sexual issues in a matter-of fact manner and it is this attitude that the therapist should show with respect to money matters as well (Freud, 1913).

Freud also wrote about the attitudes that related money to feces leading to the belief that money was dirty (Freud, 1913). Freud based the concept of money’s relation with feces on word association as he argued that the unconscious belief that money is dirty led people to not discuss it openly and to relate it to dirty unspeakable things such as feces (Freud, 1913). At the same time, Freud emphasised on the importance of money for self-preservation and therefore, the inability of people to talk openly about money because it is a taboo also leads to anxiety for people (Freud, 1913). The importance of this issue has also been recognized from the perspective of the private practitioner who in the present times that are economically turbulent, finds himself in a situation where there is a heightened anxiety and depression in the general population (Royal College of Psychiatrists, 2009).

Therefore, it is if importance to both the counsellor as well as the client that money issues are dealt with honestly as between themselves. This needs a management of money and a standard policy that would be applicable to the counselling relationship. Freud also suggested that clients should be charged for missed sessions because counsellors were leasing the hour, whether the patient came for the session or not (Freud, 1913). This may also lead to tensions between client and practitioner. The issue of tensions and conflicts faced by counsellors with relation to fee charging has been reported in some other studies as well. These tensions may arise from either one of the two reasons: first, because the counsellor may be conflicted between being a counsellor first and then a business person (Andrews, et al., 2003); and second, because there may be a conflict between ideas of altruism and professionalism (Doherty, 2012).

Festinger’s cognitive dissonance theory emphasizes on the dissonance that is resulted when there is a conflict between belief and behaviour (Festinger, 1962). Festinger demonstrated that the dissonance created by the effortful process of therapy that motivates a patient to reduce the dissonance by achieving the goals of psychotherapy (Festinger, 1962). Charging fees therefore leads to more effective therapy. The ‘essential’ aspect of fee in psychotherapy is also contended by some writers. For instance, Herron & Sitowski (1986) considered the impacts of fee essential in psychotherapy because then the client will value the process of therapy because of the sacrifice of effort (fee) put in for attaining it (Herron & Sitkowski, 1986). In the same context, some studies have found that the issue of fees and the question as to whether it should be charged is more likely to be important and therefore response eliciting when the therapist depends on the fee for his livelihood (Power & Pilgrim, 1990).

As such, it is seen that the issue of fee may be controversial from the perspective of ethics as well because attitudes towards money that is manifested in attitudes of counsellors towards fee, may be in direct contrast to what are the general standards of ethics as related to money in a client and counsellor relationship (Herron & Sitkowski, 1986). Similar ethical issues may be involved in other matters that are related to the business side of practice as counsellors, such as advertising and other matters related to billing and finances (Knapp & VandeCreek, 2008). This basically describes the general attitude to money and depicts the complication involved in the fee management for the private practitioner.

Fenichel spoke about social forces that have a great impact on societal attitudes including on money and there are many symbolic ways in which money is dealt with in a society (Fenichel, 1938). This also impacts counselling practice as the private practice depends on the fee charged by counsellor but the attitudes towards money impacts the attitudes towards fees as well. Lacan too spoke about attitudes to money within the field of psychotherapy. Money according to Lacan is a signifier of the other and therefore money has a value because of what it signifies and not just for itself (Fink, 2017, p. 51).

Friery too wrote about money matters within therapy saying that “counselling is not immune from the economic realities of life” (Friery, 2003). This signifies that counsellors too are impacted by the practical realities of money matters. However, he also pointed out that therapists and counsellors generally suffered from the lack of clarity and regulation on how to set fees (Friery, 2003). There is also a problem with the issue of fee being a taboo and this gets perpetuated by the fact that the counsellors do not have any business training which helps them in changing their world view in context of charging fee from client being a practical necessity rather than something to distance themselves from (O’Dea, 2009). At the same time, some clients may report that high fee increases their confidence in the efficacy of therapy (Friery, 2003). In other clients, higher fees may indicate either anger with, or contempt for, the client and this may have a negative impact on counselling and therapy (Friery, 2003).

Within psychotherapy, charging of fees by the counsellor remains a contested and relevant issue because of the attitudes towards money, which also has an impact on how the counsellor and the client both view the issue of money and the related issue of fees.

Setting the fee can be a difficult task for the counsellor, as primarily he or she is a service provider and financial planning may not come naturally to the counsellor. Therefore, setting professional fee is one of the most “vexing problems” for a practitioner (Bor & Stokes, 2010). However, it is essential to do so, because setting of fee is akin to conveying the relative value of the counsellor’s professional services. The beginning time is the best time to convey the fee structure and schedule to the client. This is also important because the therapy provided by the counsellor is essentially a service contract with the client, and the details of fee (that is, consideration of the contract), has to be done at the very outset.

It is true that attitudes to charging fees may vary as between different counsellors. However, for the counsellors who are in private practice, the taking of fee paying clients is the basis for such a practice to continue as that usually is the only source of income. Therefore, counsellors must have a clear policy on fee management, including the method of payment, as it may be in cash or by cheque. Counsellors also have to be vigilant while accepting cheques from clients because these may signify deep seated feelings about the manner, amount or payment of fee or the client perceptions towards the counsellor (Tudor, 1998). For instance, if the client does not put the amount of payment onto the cheque, this may signify the client’s resentment about the money being charged by the counsellor for his services (Tudor, 1998). This may also lead to future problems with the payment of fees by the client or delays in payment or non-payment, altogether. Therefore, it is always desirable from the perspective of both law as well as ethics that the understanding between the client and counsellor with respect to the payment of fees is clear right from the beginning (Bond, et al., 2012). Therapeutic, legal and ethical considerations require that the counsellor must formulate his policy regarding fees prior to the offering of the therapy. Counsellors can set a fixed fee, variable fee, fee waiver for clients who cannot afford therapy (Bond, et al., 2012, p. 143). In any case, counsellors will have to decide in advance, that is, before starting the therapy as to whether they would take a single method of payment, that is payment only in cash, or payment only by cheque, or whether they would let the client negotiate as to the payment method as and when necessary (Bond, et al., 2012). Counsellors should also avoid the accumulation of payments as this may impact the therapist and client relationship and also increase the risk for the therapist that he may not be paid by the client (Bond, et al., 2012, p. 144).

Bor and Stokes (2010) say that fee management is not just an essential aspect of practice, it is something that a responsible and prudent counsellor will think carefully about and plan well in advance, even before setting up the practice. Fee management is an important component of financial planning for the counsellor. This planning will include the counsellor’s preferences of how he or she would like to bill the client, what the billing cycles would be and what mode of payment the counsellor would prefer to be paid in. Bro and Stokes (2010) especially caution the independent practitioners to give thought to these matters of financial planning, if they want the practice to sustain itself. They say that private practice is generally not established for charitable purposes, therefore, counsellors would have to think carefully about their expenses and structure their fee payments accordingly.

Counsellors are advised to consider the setting up the full fee for services rendered. Although, it can be daunting at first to set up the full fee for their services, counsellors can do so by having regard to the fees charged by other counsellors with similar credentials (Baker, et al., 2016, p. 136). The amount that the counsellor charges for his services is an important business decision for the counsellor. The counsellor would generally see the locally prevailing fee structure before making such a decision (Reeves, 2012). The three decisions that the counsellor would have to make in the initial stage of his practice, are related to: (a) whether he would charge per session, retrospectively or in advance; (b) whether he would charge fees for missed sessions, cancelled sessions and holiday period; (c) whether the initial and assessment sessions would be charged for by him or would they be free of cost (Reeves, 2012, p. 259). These decisions are important as they will set the tone for the practice or for the therapy of a particular client. As such, the therapist is required to inform the client about these prior to the first session. It is important to point out that the legal relationship between the therapist and client is also a contractual one. Therefore, important elements of the contract, in this case fee (consideration for the services rendered by the counsellor) must be clarified at the outset. This is also a good practice with respect to therapy and counselling. The argument for this approach in case of fee-paying clients is that this is part of good contracting, which provides the client with all the information needed by him to make an informed decision before the starting of the therapy (Reeves, 2012). Another factor to keep in mind is that if there is a lack of clarity on the subject of fee arrangements, then the client may later feel that the counselling has been exorbitant. This has a negative impact on the therapy and can ultimately destroy the trust in the counselling relationship (Bond, 2009, p. 138). At times, the counsellor would have to consider the ethics of charging fee to a client who is not in a position to pay but needs the treatment. Counsellors can also use the sliding scale policies to ensure that those of their patients who do not have insurance policies or are otherwise not situated to afford treatment can receive the benefit of reduced fee (Baker, et al., 2016).

Counsellors do face cancellations, bad debts and delayed payments of fees, which may create a problem in their fiscal planning and budgeting. It is imperative that counsellors establish some method or system of reimbursements for their services rendered because, it is seen that counsellors may develop resentment towards clients who do not pay their fees on time (Baker, et al., 2016, p. 136). As such, counsellors with fee paying clients may also become vulnerable to suspicions that they are keeping the client on longer time than necessary (Bond, 2009, p. 139). Therefore, in relationship between fee paying client and counsellors there may be such adverse factors that go to the root of the trust in the counselling relationship. Therefore, it is imperative that counsellors with fee paying clients have a clear and well informed policy on financial management. Essentially, when the client comes to the counsellor for therapy, and he is a fee paying client, he is buying a service, therefore, he needs to make a well informed decision about the values of the service, including the fee paid by him (McLeod, 2013, p. 526). For the counsellor, payment is a hidden but meaningful dimension of the counselling relationship (McLeod, 2013, p. 424).

Counsellors who have fee paying clients must also be aware of the law of contract, as the ignorance of the law could result in breach of contract. The fact that the client pays a fee for the service rendered, makes the relationship a contractual one, as the payment of the fee is a consideration (Bond, 2009, p. 53). In effect, this means that the non-performance of the counsellor’s obligations would lead to breach of contract. Similarly, the non-payment of the fee will lead to a breach of contract by the client, upon which the counsellor will have to take a call on legal measures, which may be a difficult decision for some counsellors. In theory this recourse is available, but in practice, it is rare to see a therapist taking a client to court for non-payment of fees (Sills, 2006, p. 21). Therefore, counsellors must have a sound financial management plan, including fee management, in order to avoid situations, such as accumulation of fees and the possibility of non-payment of fees, due to which, the counsellor may have to take legal steps, which may not be easy for the counsellor.

It is important to note that there is a legal obligation on the client to pay the fee in consideration of the services rendered by the counsellor. Mitchel and Bond (2010, p.48) write that in private practice, therapy is given in return of consideration, that is fee, by the client (Mitchels & Bond, 2010). This fee structure, like any other consideration must be discussed and agreed upon by the counsellor and the client at the beginning of the therapy. At this time, the client and the counsellor can even agree upon the mode of payment. Thus, payment can be per hourly session and will also depend on the frequency of sessions and the duration of the treatment (Mitchel and Bond, 2010, p.48).

Important questions that the researcher hopes to get answers to are related to the method or process that the counsellors follow in setting their fees and billing fee. The steps taken by counsellors in case they are not paid by the client are also a point of interest. As counselling is primarily a service provided for the benefit of the clients, there are important ethical issues also involved in fee structuring and payments.

There are some options available to counsellors for structuring their fee payments. One option is to only accept private pay patients and collecting payments before providing service (Baker, et al., 2016, p. 138). However, the drawback of this method is that the client pool will be limited as the clients whose fees are paid by the government or insurance companies will not be taken by the counsellor.

It must be remembered that a private counsellor is in effect, running a business. As such, all the responsibilities and liabilities that are incurred for running such business is incurred by him (Wheeler, 2003, p. 69).

The majority of the work that reflects the relationship between counsellors and fee paying clients does demonstrate the importance of informing the client about the amount and method of fee payment in advance, sets out the contractual law underpinnings of fee payment and sets out the significance of fee to the therapy experience and process. However, for a counsellor who wants information about how other counsellors deal with clients who defer on payments, there is little information or research that is provided. There is a gap in the literature with respect to practices and methods of fee recovery. However, knowledge of such practices will be useful for setting up guidelines for counsellors with private practice, which depends on fee paying clients.

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