If you have a shop that sells widgets, your billing strategy is usually pretty simple. You put a price on your widgets and when a customer comes in, they tend to know how many widgets they want to buy. They look at the price of the widgets and if it’s reasonable in the context of the larger widget market, they pay for their widgets and leave with them.
Service-oriented businesses are very different – their widgets are the time they spend providing you with a particular expertise. Businesses that provide the same services over and over are able to set their billing strategies much like a regular widget shop. You, the customer, know what service you want and if the price is right, you pay accordingly and get your service.
Professional expertise services, like legal services, are a little bit different. Our widgets tend to vary greatly with every customer who walks in the door. There are certain things we do over and over, that are similar enough for us to be able to figure out (more or less) how much time, effort and expense it’s going to take to get the job done, there are also a lot of things that we do that are completely different each time we do them. The Small Claims Court work we do and a few of our corporate services are in the first group. For those things, we offer a flat rate and there is clarity for the client. However, the vast majority of what we do is to use our knowledge, experience and analytical skills to represent a client in work that is largely unpredictable in many respects.
For transactional matters, it is impossible to predict how much documentation is going to be required, how many searches are going to be needed, what the scale of due diligence is going to be, how intractable the parties’ positions are going to be with respect to negotiating the minutia of the deal.
For litigation we can’t predict exactly what steps a defendant will take that will incur time and cost, however, as we proceed through the matter we use our 18 years’ experience to help our clients take the most cost efficient steps possible.
For these reasons, clients are often faced with having to pay for our work based on the hours we spend on the matter. When that’s the case, there are so many factors that can affect you bill, that it is impossible to give an accurate estimate. We might be able to give you a ballpark estimate, but narrowing it down is difficult.
Knowing how lawyers bill should help to provide you with a framework for keeping your fees as low as possible. Working with the system, and not against it, is key. Here are some simple ways to reduce your bill:
• Use time wisely. Prioritize your needs and let your lawyer know what those priorities are. There is no sense in paying to have your lawyer go down an avenue of inquiry that isn’t that important to you.
• Communicate efficiently. While this is important in meetings, it is doubly so in written correspondence. Grouping questions together so that your lawyer can review the file once, or communicate with the opposing parties involved and report back to you, is much more cost effective than asking questions one at a time and paying for each subsequent correspondence.
• Review our reports. We try to put as much information as possible in our reporting letters, e-mails and conversations with you. Make sure you have reviewed them and understand the content before making a decision or asking a question. The only thing more painful than paying a lawyer to answer a question is paying them to answer it twice.
• Be organized. Bring all the documentation you have on a matter to us at the outset. Let us decide what is relevant. If we have to track you down, that’s going to cost you.
• Be on top of your bill. Know how much you owe and be aware of how the way a matter is progressing is going to be billed. If you have a budget, let us know about so we can tell you what you can reasonably expect from us. We don’t bill on a sliding scale, but there are different approaches that can be taken with an eye to costs.
Scott R. Young