How much does a lawyer cost? How will I be charged? How do I know if I am being overcharged receiving legal advice? Understanding the legal aspects of your business are crucial for your success. All too often we see business owners spend thousands, tens of thousands and even hundreds of thousands of dollars trying to solve a legal problem in their business. Sure some of those problems are unavoidable depending on who you deal with but the vast majority of problems within a business can be solved if you take a proactive approach to protecting your business.
At Business Legal Lifecycle we know that dealing with a lawyer can be difficult, it can seem daunting and costly. That is why we prepared this article to give you a guide on how lawyers should charge so you know what they cost.
Cost of a Lawyer
Generally lawyers charge their clients on one of two basis, firstly is a fixed fee for a service and second is an hourly basis based on how much time they spend doing the work.
Time Based Charging
Lets start with charging based on time. These costs 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 (i.e. they will track all of the minutes that they work on our file but more commonly they work this out in 6 minute increments). 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. Imagine you are on the phone to a lawyer and the call goes for 6 minutes and 30 seconds, all of a sudden you are up for 2 x 6 minute increments (also known as power billing);
- 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;
Fixed Feed Based Charging
The second way of charging for the work performed by a lawyer, a fixed price, is a much better way for you to understand what you are being charged and control the expenses in your business. Frankly this is a much better business model for you to engage a lawyer through so that you know exactly what you are being charged and if a lawyer can’t give you a fixed price then they don’t understand the work that they need to do well enough.
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.