Guitarsmith Richard Stanley says:
Stanley: If you work on fretted instruments you're going to spend a lot of time looking at frets and working on them. It's about the least sexy job you do in this business, but it is where the proverbial rubber hits the road. Frets are obviously important to the player — the pattern of the fret itself, how it's mounted in the fingerboard, and how well it's finished. Once you've trimmed up the fingerboard and resized the fret slots, you're still looking at maybe three hours to set the frets, clip the ends, bevel them, and such. It'd be hard to do it in less than three hours.
(after setting the frets)
You cut off the excess fret from the ends and I bevel them with a relatively coarse file at the edge of the board. You shape the end of the fret to blend into the fingerboard so that it's nice and smooth against the player's hand as they slide it up and down the board. I think everyone has owned a guitar with fret edges that could make you bleed. No good!
The next step is to level the frets. Fret wire specs vary — some manufacturers quote as much +/- 0.005" — and that means the crown heights might be off that much even if they're all set perfectly. So, using a relatively coarse file, you go over them, and knock down the high frets. Hopefully there won’t be one fret that's lower than all the rest and then have to bring down all the others. After leveling, the frets with flattened tops. So then you have to go over them with a dedicated fret file. These files come in many widths and grits. The best ones have diamond cutting surfaces.
Next you re-crown the fret by filing it. Get it back to a uniform shape, and get rid of the hard edges. The crown (all you see when the fret is mounted) of typical fret wire is roughly hemispherical in shape usually about twice as wide as it is high. Re-crowning and polishing is the most time consuming part of fretting, but if the frets seat uniformly less work is required at this stage. Even more work is required to properly shape and finish the ends. It's more than half the whole job — doing the ends the first time. It takes a lot of filing with several different types of files. This is why — of all the things about fret jobs — you just never see the ends done well.
Once the crowning and ends are done I use sandpaper, starting with a 320 grit silicon carbide paper, and moving on to 400, 500, 600, etc. I also use some 3M micro grade papers up to 8000 grit (one micron grit size!) for finer polishing work. The frets look great when they're done. You can see your face in them when you get close, but it's not for appearance. When a fret is in good playing shape, that's just what it looks like. They sparkle. It takes somewhere between two and three thousand file strokes per fret job.
My flat rate (in 2008) for just the fret job, fingerboard trim not included unbound boards, $375, bound boards $475, but it's always more than that because of trim/true, etc. Some in this business don't do that and you wind up with frets that show the unevenness of the fingerboard. Then you have to take it out of the frets, and you have an uneven fret job again. It's like everything else in that the prep work is almost more important. And as I said, it's a lot of unsexy work. You can work yourself sore. But it's so important. It's really gratifying to see a player who's been struggling with old frets come in and pick up their guitar and play it with the new frets. They're like: ahhhhhhhhhh (smile). I tell them: that's just the way it ought to be.