Jerry Stern is a highly sought-after tax attorney, who bills clients at $250 per hour. He has just spent 20 hours researching a unique tax shelter for one of his wealthy clients and has billed the client $5,000. Jerry just received a call from another client asking about a similar tax shelter. He realizes that he can complete the work in 5 hours or so, leveraging his earlier work. Any other similarly skilled professional would take 20 hours to do the work (and would bill $5,000). Jerry is wondering about the amount to bill the second client. He knows that the two clients are good friends. There is a chance that any difference in the amount billed to the two clients would be discovered, potentially triggering the loss of one or both clients.
Required:
Discuss at least two billing options and their relative advantages. Advise Jerry as to his best course of action.