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Leash Your Lawyer! How To Control Legal Costs.

I was hiking in the Washington forest last weekend with my good friend Jeff Merrick, whining about lawyers. I told a few of my favorite lawyer jokes, complained about how expensive and incompetent many of them are, and even pontificated a bit on how lawyers might ultimately be responsible for spreading rampant immorality in society (I will save the details of that one for a later blog entry.) I should point out that Jeff is a lawyer, so his patience with my ranting is indicative of his generally low-key and likable demeanor. (Qualities unfortunately not normally found in the legal profession.)

Like most business people, I have a love/hate relationship with lawyers. The good ones have been a tremendous help to me over the years. The bad ones (both those that have worked for me, and those that oppose me) have made my life miserable. And while lawyers are certainly necessary, it seems that society has somehow created a legal maze of bureaucracy with lawyers directing the traffic. And unfortunately, we have incentivized the lawyers to create traffic jams!

In any case, I will whine about the legal profession in detail at a later date. I do acknowledge that it is easy to complain from the outside, and since I am not an attorney I really can’t understand the pressures and situations they face. Accordingly, I asked Jeff to pass along some advice from a lawyer about how to control lawyers, and his guest blog follows. Here is his sage advice:

Leash Your Lawyer by Jeff Merrick

Legal bills are high, sometimes higher than they need to be. I’ll tell you a few reasons why and what you need to do to staunch the bleeding.

Why?

1. Unnecessary work (honest). Law students score points by noticing every possible problem, however unlikely, and addressing them on law school exams. That mindset is hard to erase, especially among young lawyers. Consequently, lawyers will sometimes work hard on things you don’t need. Think of a painter hired to paint the interior of your house. He notices that your exterior needs work. He paints the exterior and expects you to pay him.

2. Unnecessary work (dishonest). As a newly-minted lawyer in the 1980s, a partner asked me to research a particular legal question. I found the answer promptly. He asked, “Did you research all the way back to the date of the enactment? (40 more years)” Having found a recent case on point, I said “no” with a tone that questioned why to do more. He answered, with a tone that implied I was an idiot, “We’ve got a paying client.”

3. Unnecessary work (miscommunication). Sometimes, when lawyers do not know your business, they can make assumptions and go off on tangents.

4. Unnecessary work (one size fits all). Some lawyers and law firms have one style. If the style is that they fight every lawsuit like Attila the Hun or if they prepare every business deal as if it is a multi-billion dollar transaction, that will cost you. If that style matches your needs, that’s great. If not. . . .

5. Unnecessary work (training associates). Big firms use younger associates. Do you know who is actually doing your work? Do you know his or her qualifications and experience? The partner will say, “It’s cheaper to use Ms. Associate because her hourly rate is one-half my rate.” However, if you get a green associate, no matter how high their class rank, they might spend three times the number of hours on the job as a more experienced lawyer with a higher rate.

Solution. Leash your lawyer!

  • Define the project precisely.
  • Get estimates in advance – as you would with a bid from the painter. Then have the lawyer explain why their estimate was wrong.
  • Identify and approve of who will work on your matter in advance.
  • Identify check-in points to make sure everyone is still on the same page as the work progresses. Say, “Go only this far, then tell me where we are and what else you think we need to do.”
  • If oral reports will suffice, then don’t spend money on a well-crafted letter to yourself.
  • If every job the firm does for you is expensive – shop around.

About the Author – Jeff Merrick is an attorney practicing in Lake Oswego, Oregon. Having worked at big-time firms, he now practices on his own, helping people who need to sue insurance companies and others who are trying to screw them.

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One Response to Leash Your Lawyer! How To Control Legal Costs.

  1. Grant says:

    Jeff, I’m arriving a little late to the party (I see that this post was quite a while ago!) but here’s a few tips I recommend for small and mid-size businesses who think they might be getting fleeced by their lawyers:

    * Require counsel to follow written billing guidelines that prohibit block billing. Our company (shameless plug) Litigation Limited helps companies of all sizes put together billing rules for outside counsel to stop lawyer overbilling. But even if you don’ take the step of preparing billing guidelines, you must get your lawyers to stop block billing.
    * Keep an eye out for lots of billing entries that end in “.0″… this suggests that the lawyer is billing exclusively in one hour increments, as opposed to the actual amount of time worked.
    * Question vague entries that lack detail or that you don’t understand. “Legal research”? Not good enough.

    Most legal bills are inflated by at least 10-30%, and clients who don’t question their bills are most likely to be overbilled. Hopefully this will help someone (or at least set them down the right path towards fewer billable hours and lower fees).

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