Some readers know that I used to be a corporate attorney. As a General Counsel I have hired literally hundreds of outside law firms to represent the company I worked for. Trademarks; patents; litigation; transactions; collections— you name it, I’ve probably hired a law firm to handle it.
I’ve managed counsel in law firms ranging in size from solo practitioners, to the largest law firms in the world, such as Jones Day, Mayer Brown, and Squire Sanders& Dempsey, to name a few.
As a General Counsel a key responsibility of mine was to hire the outside counsel; oversee the matters for the company’s best interests; and most importantly, manage costs. And I can tell you that managing costs is something that can be done with simple steps. Many steps work just as well in a small business as in a large corporation.
Interestingly, the same steps that you use to manage costs also help you avoid many of the frustrations that clients often feel. Those frustrations include unpleasant surprises from fighting litigation for years only to be pressured to settle on the courthouse steps (when you could have done it much earlier and saved countless dollars and hours), to transactions that die a slow death from overlawyering, to misunderstandings between counsel and clients (often due to the client’s unrealistic expectations caused by the failure to discuss expectations up front).
That’s why I was so interested in a new survey by Rocket Lawyer. Asked what poses the biggest risk to their businesses, one-quarter of small business owners said“legal issues.” But even though they’re worried, business owners aren’t turning to lawyers as often as they should. The reason? More than half of small business owners (51 percent) contend that legal help is too costly.
Failing to consult a lawyer is often penny-wise and pound-foolish. In fact, getting legal help is actually a smart way to save money for your business. A good lawyer can help you prevent costly problems later, spot loopholes in contracts and agreements that can cost you money, help you save on commercial leases and more.
Fortunately, it’s possible to use a lawyer without spending a fortune. Here are five steps to keeping your business’s legal costs down.
1. Understand how the lawyer bills you.
Some attorneys bill hourly, some by the day (per diem), and some on a monthly retainer. Attorneys may also charge flat fees for standard jobs like contract review. No matter what method your lawyer uses, ask questions to be sure you understand the details. For instance, if the attorney has assistants, are you billed for their work at the attorney’s rate? Also ask about extras — some lawyers will pass the cost of faxing and making copies on to the client, while others won’t.
2. Use time wisely.
Time is money for a lawyer, so when you meet with or talk to your attorney, plan ahead to keep the time as brief as possible. Make a list of questions so you don’t forget anything you need to ask; then focus on what you need to do.
3. Keep it simple.
The less work the attorney has to do, the less you’ll get billed for. Provide the lawyer with documents he or she will need to review before the meeting. Have your information in order. Send one detailed email rather than 17 short ones with question after question. Like any businessperson, lawyers appreciate it when you make their job simpler.
4. Review your legal bills.
If you’ve got a complex project with an attorney, ask for an itemized bill. Go over it in detail to make sure you weren’t overcharged and that you understand what you’re being billed for.
5. Be proactive.
Some entrepreneurs are scared to talk to their lawyers for fear of incurring a fee… so they let small problems spin out of control. Make it a point to communicate with your attorney briefly every month or so and bring up any issues of concern. This way, you can nip problems in the bud and take advantage of opportunities for growth when they arise.
Editor’s Note: This article was previously published at OPENForum.com under the title:“5 Ways to Keep Your Legal Costs Under Control.”It is republished here with permission.
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