Keeping Legal Costs Down

First, let's take a look at the way lawyers bill their time, then we'll look at ways you can help keep legal costs down.

The billing method will depend on the circumstances and can often be negotiated. In any case, make sure you understand and agree to the billing method when you hire a lawyer.

Hourly rate
Most lawyers bill by the hour. Rates vary by location, experience, specialty and the size of the firm. Find out if you are billed in 10 or 15 minute increments (as opposed to the half-hour or full hour). Are you billed for telephone time? Does the billing start as soon as you walk into the office (even while you're exchanging greetings?)

Flat fee
Sometimes a lawyer will bill this way when preparing standard documents, reviewing a lease or something where the time can be easily estimated.

Monthly retainer
A retainer might be appropriate when you have a number of questions or expect to use an attorney on a regular basis. Monthly retainers provide a steady source of income to the attorney and thus sometimes you can negotiate a lower overall rate.

Contingent fee
Contingent fees are often used in litigation cases. The lawyer will receive a percentage of the proceeds (usually 25 to 50 percent) if they win the case or you receive a settlement. If they lose, you pay only their out-of-pocket expenses.

Now that you know how you will pay, let's look at some of the things that you can do to keep costs down:

  1. Become familiar with the laws you'll be dealing with most frequently. This means you will have to ask fewer questions, or when you do ask questions, the answers may take less time as you will already have the baseline knowledge.
  2. Ask the attorney if there are any legal guides for your industry. Also check with your trade association and see if they have any material that might help in this area.
  3. Be prepared with information and documentation before coming to see an attorney. Make a list of questions that you want to ask and write them down. It may help to provide a copy of these questions to your attorney in advance.
  4. Use the prevention principle! Having a lawyer review a contract before it is signed is much less costly than suing later because you didn't understand a provision or its consequences.
  5. Incorporate mediation or arbitration provisions into contracts and agreements.
  6. Always get a detailed billing from your lawyer. The billing should show each person that worked on your account, the time they spent and their billing rate. Don't hesitate to ask for explanations if something seems unfamiliar or unreasonable.
  7. Ask if there is anything you can do to help keep costs down. Sometimes you will be able to assist with preliminary research, summarize documents or do the copying to help keep costs down.

(from The Busy Woman's Guide to successful Self-Employment
by Women Incorporated, 7/97)