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Recently, I’ve made some significant innovations to more efficiently serve my clients in certain ways and to free up my time to focus more intensely on the kinds of things I do best – strategizing on complex corporate matters and building strong working relationships.Entrepreneurs want
results, service, expertise and value from their legal
counsel. But, business legal services are not commodities. A
sound working relationship founded on mutual respect and
trust is essential.
First, I’ve been working with a lawyer associate for shareholder agreements. Her name is Carol Heimbach, and like me, she was trained in corporate law at a big firm. I typically have 3 – 6 shareholder agreements on the go in various stages, and the problem is that they are very time-consuming and frankly, tedious. By delegating the bulk of the drafting to Carol, I can concentrate on the big picture issues instead of the cross-references, and greatly reduce the cost to the client.
Second, I’ve utilized a contract lawyer agency to do legal research at one-half of the rate I had been paying. The first project went well, so I will likely go back again.
Reducing legal fees to owner/operator business clients is not my prime goal with these measures: it is the delivery of better value while allowing me to do other things. I don’t think clients by and large really care about the internal workings of a law office, so long as they are obtaining the best value they can afford. I believe value involves:
- Reasonable, not surprising costs
- Expertise that includes business judgment as well as legal competence & creativity
- Excellent service = access, responsiveness, turnaround time that meets expectations
Not a new thing but an evolving one, is that I look for a retainer from new clients of at least $1,500 at the outset, with a likelihood of ongoing legal services being delivered, that is, not a one-off incorporation or contract advice consultation. I think this is a fair quid pro quo where the new client wants me to begin work right away, ie, give advice at the first meeting. As a solo lawyer, I have a limited number of hours in a day, and so I can’t afford to donate several hours a week to meter-off discussions.
Is the Meter Running? …Straight Talk About Fees
One of the benefits of being a small firm is that I can offer a
lot of flexibility. Sometimes, the basic $XXX per hour times
the number of hours formula is not appropriate for a matter, so I
work out a customized fee arrangement with the client.
For example, I can: |
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Set-up a regular payment schedule to amortize large upfront costs
over several months (e.g., a new business start-up, or leveraged
buy-out). |
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Establish a high-low arrangement, so the account is a fraction of
the normal cost if the deal does not close, and vice versa (high
risk, high reward for closing). |
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Combine a monthly retainer which reflects a lower cost per hour for
estimated legal fees over a year, with ad hoc billing for
extraordinary matters which may arise. |
Usually, I bill monthly in the conventional manner, by the hour, plus
HST & disbursements. My rate varies with the nature of the work from
$200-$360 per hour. If a new client provides a retainer, I'll usually reduce my hourly rate in return.
I work with a very skilled clerk for efficiencies on
corporate documents, searches and filings, and I hire a professional researcher for thorny or unique issues.
Disbursements: When Out of Pocket Isn’t Really Out
of Pocket
I believe that most so-called "disbursements" as billed by others are simply overhead, and
should be recovered only out of the hourly rate or fixed fee
charged.
Accordingly, I do not bill routine copying, faxing, stationary,
file opening or similar costs as disbursements. If a file requires
a lot of copying, I'll get the copying done at commercial rates, say 5¢
a page, not 35¢.
Genuine third party out-of-pocket expenses, such as Corporations Branch
filing fees, seals, long distance charges, PPSA searches or third party
agency fees are billed as disbursements.
Overall, I exercise judgment when I bill, and I don't nickel and dime
my clients. I expect the same treatment back, and prompt payment unless
special arrangements are made.
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