Are legal fees for business too high? A strong majority — 74% — of PROFIT-Xtra readers who replied to last week’s Best Practices Poll say yes. And, whether they agreed or not, many readers shared their tactics for keeping legal costs down. Here are some of the best responses:
- “The answer is to ask your lawyer to make more use of the services of a law clerk or paralegal / legal assistant,” advises Vnazaire. “An experienced law clerk can save you a lot of money (fees are much lower than for lawyers).”
- “Most business-related legal work is ‘boilerplate,’ and as such quite reasonably priced,” writes Wwidla. “You can have a business incorporated for about $1,000, which is quite reasonable. If you are talking about defending a lawsuit, that is quite different. As with anything else, you get what you pay for.”
- “Complexity of the legal system (or lawyers making it too complicated) makes legal fees too high,” writes Hamid S. “In some areas, more standard templates and procedures can reduce legal fees. Should a problem rise, in some cases it is just more cost-effective to write it down rather than hiring lawyers to fight it in a court. Maybe paralegal professionals can play a more active role, if they are given more authority. Similar to what nurses do in a healthcare setting, and it is not competing with doctors.”
- “Legal fees vary depending on the law firm used, its reputation in the business community, the nature and complexity of the legal issue being addressed and the type of relationship you have with legal counsel,” says Mike Novosedlik. “Fees don’t become much of an issue when a high level of trust has been established between you and your lawyer.”
- “The total amount charged may in fact not be too high; rather, it is the way legal fees are charged,” suggests Ian Brown. “When a lawyer’s assistance is required in the course of securing business, a ‘success fee’ approach is more appropriate. Other consultants are often expected to participate on this basis by charging a reduced rate during the business development phase in return for a success fee. Until the contract is won, smaller companies in particular cannot afford to risk incurring costs for which there is as yet no offsetting revenue. Ironically, larger companies are the ones in a position to negotiate such arrangements.”
For his answer, Ian Brown will receive a copy of How To Grow When Markets Don’t. And for more ideas on how to reduce your company’s legal fees, check out “Pay your lawyer less!” at PROFITguide.com.
Watch for another Best Practices Poll in the next PROFIT-Xtra.
Originally appeared on PROFITguide.com
FILED UNDER: ProfitGuide strategy