Tips for minimising legal fees
Below are some brief, common sense ways in which it may be possible to reduce your legal fees. It is always difficult for small businesses to both understand and plan for legal fees which are generally unplanned for and which appear uncertain and very expensive on an hourly basis. However, whilst not solving the problem, if clients gain a better understanding of how and why lawyer’s fees are calculated, this of itself may help to save money, so these are our tips
- Understand your lawyer’s charges – be aware that if your lawyer charges a rate of £200.00 per hour, this is not £200.00 profit – generally lawyers have a profit margin of 30% or less. In addition to the usual business expenses of premises and so forth, lawyers need a lot of admin, such as secretarial. But they also have to pay very expensive indemnity insurance which protects clients, so you are also paying for that extra layer of protection. Many lawyers also would like to be more flexible in the way they can charge but are constrained by professional rules which may not allow or make easy the prospect of ad hoc or limited retainer advice (see further below)
- Do your research on your lawyer – not all solicitors are the same, the more experienced the solicitor is in your particular type of work, whilst the hourly rate may be higher, the efficiency may be much better. Put simply, if a lawyer has dealt with a lot of contracts like the one you need, he or she should be able to deal with the issues faster
- A lot of lawyer time can be wasted on the process of back and forth communications with clients to obtain all necessary information and documents to advise or to satisfy the counterparty’s lawyers on a transactional matter such as buying or selling a property or a business. The more of this work the client does, the less lawyer time should be needed. Use your lawyer for advice, not for information gathering. Ask your lawyer for a list of relevant documents and information he or she will need at the outset and take the initiative in this respect. With some types of legal matters, particularly litigation, you will need to provide all relevant documents for your lawyer, whether those documents help or hinder your case. It is also generally important to prepare a good chronology for litigation cases, and again, you need to be thorough with this
- Be clear on your objectives with your lawyer – if he or she doesn’t think these are achievable, whether they are expectations on legal costs, expectations of timescales, or expectations of results, for example with a litigation dispute, you should find out as soon as possible – this type of discussion also helps to flush out the good lawyers from the bad, this is advice based on the lawyer’s experience and it is that experience, just as much as legal knowledge that you are paying for.