Meeting a Small Company's Legal Needs
There is a love/hate relationship between lawyers and business folks. The need for outstanding legal service is understood, but the combination of cost and the perception that attorneys slow companies down lead many small businesses to "go it alone", with the plan to add legal support once it can be supported.
This approach is fraught with dangers. The legal needs of small companies are vast and significant. These include; formation and governance issues, finance issues, IP protection issues, form document production, commercial transaction support, HR support and dispute management.
But the cost of obtaining high quality legal support is high. Partners at major firms hourly rate is now above $1,000, and this is not the main driver of high legal bills. New lawyers are billing at $400-$600 per hour, and they have minimum billing requirements that mean efficiency is not a primary driver in delivering their services. Without experience, junior lawyers take much longer to complete even basic tasks.
There are solutions to the problem of obtaining excellent legal support while not breaking the bank. With technological advances, lawyers no longer need a large firm behind them to support many legal needs. By keeping overhead low, lawyers that choose to work this way can provide their years of experience while keeping rates low.
There are a number of ways to control legal spend while getting outstanding support. A few examples:
--Monthly retainer. Many new attorneys are willing to greatly discount their hourly rate in exchange for consistent monthly payments. If this solution is chosen, it is important to estimate the work load for the attorney, and for the retainer to reflect this work load. If it turns out that there is either a consistent overuse or underuse of the attorney's time, then adjustments can be made.
--Volume commitments to reduce hourly rates. Some attorneys are willing to lower already reasonable hourly rates if they can count on a minimum number of hours being utilized by a client. This can be monitored either with an understanding that can be adjusted, or offering a volume discount of hourly rate depending on hours used.
Either way, the real key to obtaining outstanding legal support at a reasonable cost is to develop a strong working relationship with your counsel. There should be no hesitation to pick up the phone and discuss a bill. My standard belief is that a client should be able to look at a legal bill, and while not happy to be spending money, believe that they received real value for the money spent. By building a real connection with your counsel, you can create an environment of trust.