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How to avoid inflated fees and other valuable tips.
In running a successful business, you typically need the services of three professionals — a good tax accountant or CPA, insurance agent and an attorney. Know that talent and skill levels are crucial for your success.
As I wrote in the Checklist – 10 Legal Basics for New Entrepreneurs, carefully research lawyers thoroughly before deciding.
As for obtaining the right counsel, analyze your possible reasons for hiring a lawyer. That includes matters from legally binding agreements to protecting yourself from customer or employee allegations and misbehavior.
Keep in mind these 10 tips:
1. Check to see if the attorney has a significant business-law practice.
Make certain your attorney practices business law. Business law must include all or at least most of the attorney’s practice.
Make certain your attorney practices business law. Business law must include all or at least most of the attorney’s practice.
Unlike some professionals who might have skills which are applicable in numerous industries, when considering a lawyer, don’t settle for a generalist. Hire a business attorney.
2. Research attorney experience.
In business law, experience counts. You’ll want an attorney who has experienced your likely scenario on numerous occasions.
3. Past performance is an indicator of the future.
In interviewing attorneys, ask about their pattern of results, and research their performance record.
4. Personality is important because the two of you will need to be on the same page.
When you meet for an interview, discuss more than just your legal concerns to determine if you two mesh well.
5. Evaluate the person’s communication style.
Is it compatible with yours? Whether it’s via e-mail or phone.
6. Continue your research.
Check four important resources — the attorney’s Avvo rating; whether the person is even listed at Super Lawyers; the lawyer’s record for possible disciplinary action with your state bar association; and even check to see if the person has been covered in the news media.
7. Get references from people you trust — preferably in your industry.
Attorneys can be persuasive even if they’re not skilled in the courtroom. Exercise due diligence.
Even if your research turns out favorably in tip No. 6, it isn’t always conclusive. You can usually get more specific, salient information about an attorney in a confidential chat with your associates.
8. Review the attorney’s aptitude and judgment.
Make sure you and the attorney have the same level of risk aversion. Some legal matters are only mole hills. Other matters are mountainous. You need someone who knows the difference.
You might also need an insightful attorney for a complex legal matter, so don’t hire an attorney who can’t analyze issues. Don’t assume anything. Not to be gauche, but like any profession, some lawyers can’t see beyond the end of their noses. On the other hand, I’ve encountered some excellent attorneys.
Note: I’ve had clients who were attorneys. One of them once told me that 50 percent of the lawyers in Washington state were destitute or close to it. That likely explains why I’ve had business associates who experienced either unethical or inept lawyers.
9. If you have no other choice and you anticipate going to trial in a serious legal matter, check out the attorney’s level of confidence and ability in such situations.
It gets expensive when a bunch of lawyers start gathering. But go to court if you must. Know that some lawyers are terrified of going to trial and to present arguments in front of a judge or jury. You’ll need analytical, tough and successful representation.
10. Beware and research the attorney’s fee structure.
Beware: Legal fees can vary considerably. Know in advance what you’ll be paying. Make certain there’ll be no surprises. There are attorneys who milk their fees. For example, they maximize their revenue by leveraging creative billing structures or they inflate their billable hours.
Be alert to these tactics to inflate fees
Before retaining an attorney, be forewarned:
1. Block billing — Some attorneys group several actions together in a single entry so the client won’t know how much or little time they spend on specific matters.
2. Aggressive minimum time increments — Many will charge a client in 6-minute increments but round it up to a quarter hour or half hour.
3. Padding or double-charging — It could include conducting research and billing multiple clients. Another tactic used is billing for internal communications, such as talking as a junior attorney to a senior partner.
4. Overbilling for clerical work — Some attorneys will charge their high hourly rate for simple tasks that are actually handled by a subordinate.
5. Reconstructing bills from their memory — By re-creating time records, some attorneys guess at the number of hours they worked weeks earlier.
6. Escalation of contingency fees — Instead of retainers, it’s common for personal injury attorneys to charge 33 to 40 percent of the settlement. If the lawyer wins right away, they still get the high percentage fee. But if the case takes a long time to settle, some attorneys increase the percentage of their fee.
Protect yourself
Take these precautions:
1. Negotiate flat fees — Instead of an open-ended hourly for writing basic simple matters, arrange for a flat fee.
2. In an engagement letter, obtain a detailed written agreement — Spelling out how you will be billed: Flat fee, hourly or contingency basis if the attorney wins on your behalf. Get in writing the minimum allowed billing increments.
4. Minimize communications — Be careful to avoid a massive set of charges. Refrain from multiple contacts via email or the telephone. Whenever possible, consolidate topics in just periodic single contacts.
5. Act quickly if you spot a discrepancy — Immediately and respectfully contact the lawyer for clarification and ask for clarification.
Conclusion
So do your due diligence. Ask lots of questions. Good luck.
From the Coach’s Corner, here are four legal-resource links:
How to avoid EEOC Discrimination Suits — Here are six tips for micro-companies and 13 strategies for larger organizations to avoid EEOC migraines.
10 Tips on Responding to EEOC Complaints — Despite all the court cases, warnings and complaints filed at the Equal Employment Opportunity Commission, a study shows big companies are guilty of favoritism in their promotion practices. It’s true that certain people are identified and groomed for promotion.
HR Tips to Avoid Legal Hassles with Immigration and Customs Enforcement — This includes strategies on how to respond to an ICE audit. Employers have been having problems with the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE).
6 Patent Tips to Protect Your Inventions, Intellectual Property — Whether you’re a new or existing business, take precautions to protect your inventions. Entrepreneurs are well-advised to consider ways to avoid legal entanglements over their inventions and intellectual property.
“A jury consists of twelve persons chosen to decide who has the better lawyer.”
-Robert Frost
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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
