It’s almost always smart to look at ways to reduce your legal fees. Here are some tips I’ve prepared. Reach out to me if you’d like to know more.
Discuss Fees in Advance. Don’t be shy about discussing fees. Although lawyers are in business for themselves, they are service providers. The best attorneys understand their role as partners and in helping a client succeed.
Find a Flexible, Creative, and Nimble Attorney. Tech is about more than jeans, sneakers and pizza. Tech is about creativity and finding ways to close deals that fuel possibilities, not shut them down. If your attorney isn’t suggesting solutions proactively, you should find a better attorney.
Consider Smaller Firms. Let’s be real. $900 an hour for an attorney is extreme. In most cases, it’s unwarranted. That’s far more than a Neurosurgeon or other medical expert makes, and we aren’t saving lives. While a smaller firm or solo might not seem to have the breadth of expertise of a national firm, many attorneys “cut their teeth” in-house or at bigger firms. Many choose to practice in a more collegial environment than some large firms provide. Smaller firms and solos also have the advantage of offering lower fees. They simply aren’t bound by the expenses of the partnership model, large marketing budgets and fancy offices.
Be Clear About Billing. Depending on the type of legal work needed, hourly rates or flat fee rates may be appropriate. Invoices should be clear, detailed and explicit. Don’t nickel and dime. Charges for long distance telephone calls, copying and so forth are archaic and raise questions about the efficiency of the firm.
Offer a Minimum Number of Hours. A lawyer may be willing to offer a significant discount in exchange for a minimum number of hours.
Have Your Lawyer Design Forms that You Can Reuse. The legal profession has moved toward the re-use of forms, such as the financing forms of the National Venture Capital Association, and the “Series Seed” investment forms. If your lawyer doesn’t have forms they can offer, you should consider finding a lawyer with more experience in your domain.
Provide Your Lawyer All Pertinent Documents in a Timely Manner. Clients often try to save money by providing limited information. That rarely works well; the attorney will end up spending extra time asking questions (sometimes in multiple iterations) about the situation.
Insist on an Itemized Statement Each Month. You should know exactly what services were provided. If something seems incorrect or unclear on the statement, contact your lawyer immediately (we do make mistakes occasionally).
Suggest Cost-Saving Methods to Your Lawyer. If your lawyer is proposing a three-way meeting in another city, ask if it could be handled just as well by a conference call. Lawyers are not always as cost conscientious as they could be. Because of your business expertise, you can often point out ways to save money.
Keep Abreast of Legal Developments In Your Field. Providing your lawyer with trade journal clippings that describe recently decided cases affecting your industry can reduce costly time spent on legal research.
Ask for Progress Reports During Prolonged Cases. As a part of these reports, your lawyer should estimate what the remaining legal expenses will be. This will help you decide whether to intensify your efforts at settlement or seek other ways to conclude the case promptly.
See Your Lawyer During Normal Business Hours. Some lawyers charge extra for evening or weekend work. Try to arrange for meetings in your lawyer’s office or over the phone. It’s often wasteful to pay for your lawyer’s travel time.
Consider Adding a House Counsel to Your Staff. This can save you money if legal fees to outside lawyers are running more than $300,000 a year.
Shop Around, But Don’t Lawyer Hop. Speak to other people who own or operate businesses in your area. Call or visit a number of lawyers and ask them about their fees. Comparison-shopping will help you avoid overpaying. But keep in mind that the cheapest hourly rate isn’t necessarily the best. For example, a novice who charges only $250 an hour may take three hours to draft a real estate sales agreement. A more experienced lawyer who charges $425 an hour may do the same job in 45 minutes. Clearly, the first lawyer is no bargain.
Once You Find a Good Lawyer, Stick With Them. A lawyer who’s familiar with your business can handle your affairs much more efficiently than a succession of lawyers, each of whom must start over from scratch.