Recently, I’ve made some significant innovations to more efficiently serve my clients and to free up my time to focus more intensely on the things I do best – strategizing on complex corporate matters and building strong working relationships. Entrepreneurs want results, service, expertise and value from their legal counsel. But, business legal services are not commodities. A sound working relationship founded on mutual respect and trust is essential.
First, I’ve been working with a virtual associate lawyer for shareholder and other lengthy agreements. Her name is Carol Heimbach, and like me, she was trained in corporate law at a big firm. By delegating the bulk of the drafting to Carol, I can concentrate on the big picture issues, and greatly reduce the overall cost to the client.
Second, I’ve utilized a contract lawyer agency to do legal research at one-half of the rate I had been paying. The first project went well, so I will likely use them again.
Reducing legal fees to owner/operator business clients is not my prime goal with these measures: it is the delivery of bettervalue while allowing me to do other things. I don’t think clients by and large really care about the internal workings of a law office, so long as they are obtaining the best value they can afford. I believe value involves:
- Reasonable, not surprising costs
- Expertise that includes business judgment as well as legal competence & creativity
- Excellent service = access, responsiveness, turnaround time that meets expectations
Like most busy lawyers, I look for a retainer of at least $1500 from new clients. I think this is a fair quid pro quo where the new client wants me to begin work right away, ie, give advice at the first meeting.
Is the Meter Running? …Straight Talk About Fees
One of the benefits of being a small firm is that I can offer a lot of flexibility. Sometimes, the basic $XXX per hour times the number of hours formula is not appropriate for a matter, so I can work out a customized fee arrangement with the client. For example, I can:
- Set-up a regular payment schedule to amortize large upfront costs over several months (e.g., a new business start-up, or leveraged buy-out).
- Establish a high-low arrangement, so the account is a fraction of the normal cost if the deal does not close, and vice versa (high risk, high reward for closing).
- Combine a monthly retainer which reflects a lower cost per hour for estimated legal fees over a year, with ad hoc billing for extraordinary matters which may arise.
Usually, I bill monthly in the conventional manner, by the hour, plus HST & disbursements. My hourly rate varies with the nature of the work and is competitive with other business law lawyers in the region. I now have an associate in the firm which allows me to delegate some tasks and focus on the big issues and projects, while maintaining supervision and control. I work with a very skilled virtual clerk for cost efficiencies on corporate documents, searches, annuals and filings.
Disbursements: When Out of Pocket Isn’t Really Out of Pocket
I believe that most so-called “disbursements” as billed by others are simply overhead, and should be recovered only out of the hourly rate or fixed fee charged.
Accordingly, I do not bill routine copying, faxing, stationary, file opening or similar costs as disbursements. If a file requires a lot of copying, I’ll get the copying done at commercial rates, say $0.05 a page, not $0.35. Genuine third party out-of-pocket expenses, such as Corporations Branch filing fees, seals, long distance charges, PPSA searches or agency fees are billed as disbursements.
Overall, I exercise judgment when I bill, and I don’t nickel and dime clients. I expect the same treatment back, meaning prompt payment of my bills unless special arrangements are agreed to in advance.