How to Maintain Legal Costs

Business companies need legal service in order to continue its operations. Lawyers provide the legal protection against the threats of litigation. They also help secure the assets and properties of business as well as provide the framework for its existence. Lawyers are the indispensable partners of businesspersons.

It is an assumption that the bigger a company grows, the more legal representation he needs - which means greater legal costs. That should not be the case.

Companies can actually keep legal costs under control while increasing the quality of legal services that they receive. Here’s how:

• Get the right lawyer for the job – Getting a specialist for your company’s specific needs saves you time and money.

• Maintain contact with your lawyer – Keeping in touch with your lawyer to update and report current events in the company. This could help him assess situation and prevent potential lawsuits or trouble.

• Keep you lawyer informed of your goals

• Avoid litigation – If possible, make all necessary means to prevent lawsuits and litigation, which are costly and time-consuming. Regular communication with your lawyer can help prevent this.

• Hire a law firm with appropriate resources

• Look for alternative fee arrangements – Ask your lawyer about fee arrangement and try to agree on a method of payment other than hourly basis. A fixed fee arrangement or a contingency fee may be suggested.

• Get an estimate of legal fees - Asking your lawyer about an estimate of legal fees may help you set allocations for it and avoid “surprise” billings.

• Focus on the lowering the total bill, not on the individual bill of lawyers

• Check Your Insurance – Make sure your lawyer checks your insurance coverage to determine the limit of liability and its coverage.

Typical Fee Arrangements

A lawyer’s reputation and experience often determine the price of his legal services. However, not all good lawyers are expensive, although these matters are all subject to negotiations. To better understand legal fee arrangements, it is necessary to know the structure of legal fees.

There are four categories of legal fee arrangements:

1. Retainers’ fee – It is a lump sum payment to a lawyer, made in advance of any work performed in your behalf, which is often asked by the lawyer. The specific amount is often requested before the work but it is also negotiable.

2. Flat fees – Often billed after doing simple, well-defined issues like preparing a will and other less important documents or drafts.

3. Hourly billing rates – A predetermined payment charged by lawyers over the amount of time spent on the case.

4. Contingency fees – In this case, fees are often collected after the results or outcome of the case. The attorney takes one-third of the recovery or settlement.

Fee agreements are often done in writing as required in most states. The agreement must specify the items and the charges, including the expected payment for the legal service package. You can ask your lawyer’s approval before agreeing to a deal. In this way, you will avoid erroneous charges and unexpected expenses.