How You Can Corral Legal Costs

Nation's Business, Feb, 1999 by Michael Barrier

Don't hesitate to guide your lawyer's attention in the direction you think it should go. "Sometimes there are legal developments that are industry-specific," Steingold notes, "and it's good to follow those things through trade journals and other publications and keep your lawyer informed. You may know something before your lawyer does." Send a clipping to your lawyer if you think it might apply to your company

Recycle your lawyer's work.

"If you're going to have transactions that are going to be repeated," Steingold says, "talk to your lawyer about designing something that can be reused just by filling in the blanks. That way you don't have to go to the lawyer each time you have a new contract. These days you can ask your lawyer to put it on a floppy disk for you."

Says Toothman: "Customizing services is extremely expensive. If you can use something that is reworked from a prior situation, not only does the lawyer spend less time doing it but it's also more likely to have been tested by time. If something is drafted from scratch, there may be flaws that don't show up until you're the victim of them."

Morrison, Mahoney & Miller, the Boston law firm, carries the recycling idea a step further. It distributes to Emerging Businesses Practice Group clients, without charge, documents that were prepared for other clients but that the small businesses can adapt to their needs. (The original client's name is removed from the documents.)

For example, Nicholas Alexander provided Hawthorne Associates' Sullivan with a model sexual-harassment policy at no charge. He says he has never encountered any resistance to such sharing among his clients.

Be prepared for litigation and its uncertainties.

Part of what makes litigation so disturbing is its apparent unpredictability. A company may go from paying perhaps $1,000 to a lawyer for "routine stuff," Toothman says, getting a steady stream of bills for $5,000 or $10,000 a month, if they're in serious litigation. They don't know when it's going to end or how much it's going to cost."

Although litigation is inherently more unpredictable than other legal activity, Alexander says that at his firm, "we always have a budget, in writing, which includes our best guesses as to the costs and the likelihood of success." Such budgets can predict with reasonable accuracy only the costs of the next stage of a case, but at each stage the client company will have enough information to know whether it wants to proceed.

Lawyers should welcome opportunities to prepare such budgets, Alexander says; his firm encourages clients to ask for them. The lawyers will do their jobs better, he says, by concentrating on getting the work done within the time prescribed by the estimate.

If there's one key to getting value for what you spend on legal advice, it may be to regard a visit to a lawyer as an-other opportunity to help your business grow. "Small-business owners wait too long to go to lawyers, until they're already in big trouble," Jacobs says. "Then it's like going to the dentist--you close your eyes and you open your wallet."