How do lawyers calculate their hours

How did my lawyer work out the hours that they worked on my matter? I can’t seem to get this invoice to add up? How do I know if I am being overcharged receiving legal advice? These are all questions that we often see coming up for business owners when they receive legal advice. Sometimes it is difficult to understand just how a lawyer has calculated their hours and their fees.

If a lawyer charges you based on a fixed price quote then the hours that they worked for you don’t matter so long as you receive the outcome that you are after from the lawyer. This can be difficult to realise for some people especially those who are used to being charged by their lawyer based on the number of hours that they worked.

Time Based Charging

The cost per hour can vary from $200 per hour to as high as $1,200 per hour. Some law firms will calculate this on the actual time spent. This is an antiquated way of running a business and creates a lot of problems between lawyers and their clients.

The problems with this approach are numerous, some of the key ones are it:

  • Disincentives you as the client to get legal advice and to carry on a discussion because you are worried about the time you are being charged;
  • Incentives your lawyer to spend more time doing the work on your file and not find the more efficient way to deal with your opportunity or problem;

What our tool is not designed to do?

The tool is specifically designed to produce a report that you can take to your lawyer so that they can help to implement the legal risks. Generally to obtain this type of advice from a lawyer would require an investment of around $1,000.00 (or 1,000.00 pounds) so that the lawyer can interview you, obtain all of your information and then write the report. Alternatively often lawyers may try to do this advice for free and then charge you more when they implement and do the work.

Either way the report is designed to save your time and money to find out this information and then have your lawyer do the work. We have also designed it to explain to you, in plain English, what all of these legal terms mean and why they are important. This means that when you go to see your lawyer you will not need them to explain what you need to do, you will already understand.

Calculating the hours

When you are being billed based on time the lawyer needs to count the number of hours that they work on your file. To do this, they will track all of the minutes that they work on your file but more commonly they work this out in 6 minute increments. This means that if you are on the phone to a lawyer and the call goes for 6 minutes and 30 seconds, all of the sudden you are up for 2 x 6 minute increments (also known as power billing). This is how a lawyer’s bill can really add up and you can feel as if you are being ripped off.

These charges are often out of reach for many business owners. That is why we created the Business Legal Lifecycle Legal Risk Assessment. It is a tool that takes about 10 minutes to complete online by answering 31 questions about your business and costs $97. It provides a report that sets out the legal risks in your business and what you need to do to protect them. For a lawyer to prepare a similar type of report it will take generally between 2 to 4 hours. That means that the cost of obtaining this advice from a lawyer could be as little as $400 and as much as $4,800.

The Business Legal Lifecycle Legal Risk Assessment gives you a report that sets out what is missing in your business, why you need to prevent those legal risks and a plan for the future of your business. Importantly you can take it to your lawyer to then do the work that they are good at, preventing those legal risks within your business and you get all of this without the cost of a lawyer preparing the report in the first place.

By working together with the Business Legal Lifecycle lawyers can help their clients to prevent legal risks within their business and prevent so many problems that commonly afflict small to medium sized businesses.

Get your Business Legal Lifecycle Legal Risk Assessment by clicking here now.

Start here to discover your legal risks
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