The Key to Keeping Legal Expenses Down

Attorney at Law  Click here for: Reasonable Legal Fees

(How to Minimize Legal Expenses for a Small Business)

To make the right business decision and hire the right lawyer, all you really have to do is go back to simple rules of business 101. Remember, every party to the transaction has to be properly incentivized from their own point of view. Look at the issue from the point of view of the lawyers.  Basically, you have to learn how to spot a secure lawyer; because a secure lawyer can be reasonable in keeping your legal expenses down. Insecure lawyers either cost you more money for their incompetence, or they just bill as much as they can without looking at the long-term. But there are concrete ways you can address this problem and as an attorney I can help you. 

I would like to tell you about a client of mine, let’s call him “Jim.” Before I became Jim’s lawyer, Jim used to do some perfectly reasonable things to try and get the most bang for his buck when hiring a lawyer.  Nevertheless, for years his legal expenses always got out of hand. For years everything he tried seemed to backfire. Jim tried to hire hungry but smart lawyers, with lower hourly fees, and they seemed to generate bills that included everything but the kitchen sink! Even if they had lower overall fees, they might bill him 8 hours for a 4-hour job. But, on the flip-side, when Jim took his legal business to a reliable business litigation firm, they would never fail to bill their way through 10K every week or two, whenever he had a problem. 

Jim’s thinking (which was not wrong) was to hire legal counsel that had low overhead, and when that didn’t seem to be working out, he tried to hire a reputable firm to handle his business. In both cases, Jim’s business budget was ruined by legal expenses. Jim’s companies do construction, supplies, materials, and regional transportation. He owns commercial property and he has about 25 direct employees and 30 regular contractors. Jim used legal counsel for planning and managing his legal entities, for writing and reviewing contracts, for collecting overdue accounts, and for defending or suing—but only when it became absolutely necessary. 

About two years ago, Jim reached out to me as an old college buddy, because a mutual friend reminded him that I had become a lawyer and that I was now practicing in his neck of the woods. What I explained to Jim was what I had heard years before from my marketing professor, and years before that from my own father. “If you want to do good business with somebody, understand how they do business first.” In other words, to have a good relationship with your lawyer, you really need to understand how the lawyer’s payables and receivables work. That, plus just some basic business 101, put him on the right track. Now Jim uses three different lawyers; but, for local litigation, he finally has one guy who does exactly what he needs, without breaking the bank. 

First, You Can Get More Bang for Your Buck by Hiring a Smaller Law Firm

The first thing that my old friend needed to understand about the legal business is that, although many firms appear reliable and well-established, there is usually just one singe lawyer who does all of the work for any particular case. That is usually true, no matter what their billing invoices look like. If that one single lawyer is part of a business litigation firm, then you can bet that several legal secretaries and paralegals and one or two other lawyers will heap on their own billable hours. That is how they pay for their nice office. But the lawsuit still had to be worked by one guy who understood the whole case, because he is the one who organized and prepared the whole case. This is why Jim tried to follow the rule that was handed down to him by his father: the “one-one rule.” The one-one rule means that he only hired law firms with one attorney and that officed in a one-story building.

So if the case was really all about the efforts of one lawyer, why shouldn’t Jim pay a fraction of the fees and have a solo practitioner do the job? The answer is, for the money, Jim should use a smaller law firm, just as long as he knows that a smaller law-firm is not so hungry that it is desperate to take on Jim’s single case. If that happens then you can believe they will find 30 hours of work for an 8-hour problem every time. But even worse than that, there is a kind of distortion in the analytical thinking of any desperate human being, and you just can’t have that in your attorney. No lawyer can do a good job if he is too desperate to pay his own bills-- even if he wants to.

But since that solo-practitioner can be such a money-saver, and since Jim really needs to save every penny, what Jim needed to do was to make sure his prospective lawyer passed what I will call the “desperation test.” The first part of the desperation test is to find out if the prospective lawyer will take on just any case, even when it is obvious that the client would just be throwing good money after bad, or if the case is frivolous. Any good lawyer will counsel against a frivolous or wasteful legal process, but there are plenty of desperate lawyers whose eyes will light up, and their voice will become passionate, and they will begin weaving a tale about justice and dignity and your constitutional rights! You should never lie to your attorney, but it might serve to ask his or her opinion about a case that you do not actually intend to pursue, just to see if the attorney proves that they can give sound advice about a bad case.

Next, will the attorney provide you with referrals who are competent to handle the same kind of legal matter? I always provide two or three referrals, because I sincerely want for people to have good representation, even if they don’t use me. The fact is, law is such a highly-specialized profession that the most normal reason in the world for consulting an attorney is to help you find the right attorney. Stay well away from any attorney who hesitates to provide you with reliable alternative referrals in the same field. It seems to me that if I really know what I am talking about, I want the client to hear what another good lawyer has to say about the same subject. That will give the client the kind of assurance and confidence that I want them to have—whether in me, or in another attorney. If the client goes with a trusted colleague, I will have that client’s goodwill and trust. No single potential case will keep me from making a living. Because I believe that, and because I live that way, I can be a secure attorney for my clients.

The next part of the desperation test is not really a test at all, but a challenge. I told Jim this, and he made a few phone calls and got it done. I gave Jim three solid referrals, and Jim picked out one lawyer, and, together with one of Jim’s business associates, Jim brought three cases to that lawyer. The challenge is to bring multiple legal projects to one lawyer at the time you hire him or her. This might involve talking to friends, acquaintances or business associates who have needs similar to yours; or, if you are like Jim, you may have several different needs for a business lawyer all within your own company. When Jim hired a new solo practitioner, Jim didn’t bring one single case to the lawyer—he brought three.

Bringing multiple cases to one attorney has several good effects.

First, you can be absolutely sure that the lawyer is not dependent on your one single case.

Second, you become an instant VIP.

Finally, everybody in every case has more feedback and information so that you can compare notes and determine whether you really are getting the highest level of legal services. Your attorney should be on his game. There is no second place in a lawsuit, and any legal document that is “almost correct” is completely wrong. It is a zero-sum profession. And so if there are any issues with your lawyer’s competency or work ethic, you want it on your radar. Having two or three cases with the same lawyer increases range of your radar.

To sum things up,

1) You can get more bang from your buck by hiring small law firms or solo practicioners;

2) Attorneys who are too desperate make bad attorneys;

3) Test an attorney to see what they think of an obviously bad case;

4) Make sure an attorney is willing to refer you to reliable alternative practitioners in the same field; and

5) Bring multiple cases to the same attorney the first time you hire him or her to work for you.

Using these steps has saved Jim and his business enough more than enough money for a private college education. I recommend careful consideration when choosing an attorney, and, no matter what you do, people can surprise you. But if you ever have to change attorneys in mid-stream, it can cost you so much more than it otherwise would have. These five steps are a way to minimize that need, or, at least, to learn about that need as soon as possible.

Your own lawyer’s business needs need to be symbiotic, not parasitic, with your business needs. Chances are, if you have read this far, then you or someone you know, may need an attorney, or, at least, you may need a different one than the one you have now. I practice Business and Family law throughout the Dallas-Ft. Worth metroplex region. I treat my clients’ businesses like family, and when I work on a family-law case, I am all business. I am pleased to make sure that you have the right lawyer, even if it is someone else. I don’t receive any referral fees (and I never have); however, I do appreciate your goodwill.

Ben B. Boothe, 2nd  Attorney at Law  972-692-8251  or 817 690-6755   email: ben@benboothelaw.com