Outrageous legal costs – Tips on Limiting your Bills
Q&A: Keep legal costs in check – Australian Financial Review 23 April 2012
My business just grappled with three legal issues: tax, employment law and then supplier contract. Then my lawyers invoiced me $43,938. What they did was comprehensive but, at this price, I feel gouged right down to each email and call. This amount has blindsided me. Any tips to prevent lawyers from doing this to me again?
Tonkin Corporation chairman Kenelm Tonkin offers these 13 tips for slashing legal costs:
1. Carefully match to law firm by size. Large firms are prohibitively expensive for small to medium enterprises
2. Seek out specialists. Repetition makes a lawyer fast, while generalists are slow. Remember, time is money.
3. Test accessibility. Before instructing a solicitor, call unexpectedly a few times. Accessible lawyers yield quicker results, cutting costs.
4. Assess efficiency. Visit the lawyer’s office. Is the firm well-ordered or chaotic? Eschew the posh conference room. Instead, ask to talk at the solicitor’s desk. Is it a muddle or competing files or is the professional in control?
5. Be clear. Proclaim your cost sensitivity. Say it first. Say it often.
6. Check commerciality. Explain your problem. Ask ‘’what will this cost overall?” Equivocation and obfuscation are red flags. A counsel who cannot articulate your cost trade-off will cost you dearly.
7. Cap your costs. Ask, ‘’Will you take my instructions on a fixed fee basis?” If the answer is no, beware.
8. Quiz a former client. Ask, “Did this lawyer honour his fee estimate and achieve the result you wanted?”
9. Insist on a cost agreement. Defining the scope of work unambiguously is a prerequisite. To save money, stick to that scope.
10. Maximise oral interaction and minimise writing. Unnecessary emails, memos, written opinions and letters exponentially increase your costs. Demand a lean carriage of your matter.
11. Write notes. Legal issues recur. If you record your lawyer’s advice and learn the law, you need to revisit old ground in the future.
12. Select trustworthy lawyers. Trust, honesty and chemistry lead to lower costs.
13. Focus on results, not process. Do not become lost in the solicitors labyrinthine process. Diversions are costly. Stay true to the business owners’ creed of achieving the most efficient result.