NFIB

Tips for Reducing Your Legal Fees
12/ 19/ 2003

by Jeffrey Moses

Although many legal matters involving small businesses can be resolved through small claims court without the presence of attorneys, there are situations in which attorneys should be consulted. Many of these are normal to the course of everyday business, such as the start-up of a new business entity or the creation of an important contract. In general, it's wise for a small-business owner to maintain a relationship with an attorney who is experienced in the unique needs of small companies. Sometimes even a quick call for advice can be beneficial.

However, many small-business owners avoid even calling an attorney, fearing that charges will escalate. Working with an attorney does cost money, but there are ways to reduce legal expenses, without sacrificing the quality of service received.

To monitor and control legal expenses:

Shop around for an attorney, as you would for any other service. Discuss the attorney's experience, hourly charges, cost estimates for specific work that needs to be done and setting limits for charges.

Remember that a good, experienced lawyer may charge more per hour, but could save you in the end by working more efficiently.

Always store up your questions for an attorney so you can ask them all at one meeting or during one phone call. This will save you money when your attorney is working on the clock.

Speaking of the clock, ask your lawyer to consider working on contingency, which means you pay nothing unless an action is successful.

Ask your attorney if the firm's paralegals can do some of the work. Paralegals normally work at a lower hourly rate but may be completely qualified to perform some of the work done on your behalf.

Always ask for and carefully review a statement of time and services provided. Attorneys should break down their billing into quarter-hour segments or less.

Don't sit around chatting with your attorney. It might be pleasant to shoot the breeze for fifteen minutes at the beginning of a meeting, but you may be charged for the time.

The cost of many specific services attorneys provide can be quoted in advance. Even if the work isn't standard, ask for an estimate. This will at least keep the cost within a range that won't shock you.

Even better, try to set a specific limit to the charges. Attorneys usually are reluctant to do this because it's often impossible to know how much time will be required. If you can set a limit, it will keep the attorney focused and you'll know the limit of your expense. The downside of such an arrangement is that the attorney may end up putting in a lot of unpaid time if unforeseen events drag the work out. This can result in resentment or even poor quality of service.

Our society has become so litigious that a small-business owner should not avoid seeking legal advice because of the cost. An attorney can help you avoid legal problems and keep you out of court -- but only if you pick up the phone and call when you have a question. The cost of a few hours of legal consultation that saves you the expense of going to court will be a true value.

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