Managing legal costs
THIS ordinarily would be a queer topic coming from a lawyer who is supposed to make money from the very same legal fees he is encouraging you to manage.
Legal fees, by their very nature, are by no means insignificant.
Depending on the size of your organisation and nature of your work, you may actually find that legal fees constitute a sizeable chunk of your monthly or yearly expenses.
In some instances, you may even suspect that some of the bills are inflated. Does this sound familiar?
This can only be picked if you have a bit of exposure in dealing with lawyers.
I believe that the role of a lawyer and a law firm in the 21st century should be to create value for their clients, even if that means being candid with them on approaches that can save costs.
Managing legal costs can be a challenge for organisations, but there are several strategies that can be effective in keeping them under control.
In this series, we are going to look at some of the approaches you can adopt to effectively manage legal costs.
Effectively managing legal costs is a vital aspect of any business or individual’s legal proceedings.
One crucial element that cannot be overlooked is establishing clear communication and expectations with your legal professionals from the very beginning.
By clearly outlining budget constraints and setting expectations regarding legal costs, you can foster a transparent and open conversation that helps ensure everyone involved is on the same page.
1. Establish clear communication channels
To effectively manage legal costs, it is essential to establish clear lines of communication with your legal counsel. This means identifying the preferred methods of communication — whether it be through email, phone calls or in-person meetings — and ensuring there is a consistent and reliable means of contact between all parties involved.
Clear communication channels are crucial to address any concerns, provide updates and share important information promptly.
2. Outline budget constraints
One of the first steps in managing legal costs is to clearly outline your budget constraints to your legal professionals. By openly discussing your financial limitations, you allow them to tailor their services to fit within your budget.
This discussion will help set realistic expectations and prevent any potential misunderstandings regarding legal costs down the line. Your lawyers can then provide effective advice and guidance that aligns with your financial capabilities.
3. Manage expectations regarding legal costs
In addition to budget constraints, it’s essential to manage your expectations regarding legal costs. Clearly communicate your desired outcomes and the level of investment you are willing to make for your legal matter. This enables your lawyers to provide guidance on the feasibility of your goals and devise cost-effective strategies to achieve them.
By aligning your expectations with your legal team’s understanding, you reduce the risk of unnecessary expenses and ensure that efforts are focused on achieving desired results.
4. Request terms of business and billing policy
When retaining a new legal firm, it is prudent to request their terms of business and billing policy. Understanding how they charge for their services and the applicable rates is crucial in managing legal costs.
Review these documents carefully to gain insights into their fee structure, billing increments, any additional expenses that may be incurred (such as court filing fees or travel expenses) and their preferred payment methods. By being fully informed, you can make decisions based on a clear understanding of the financial implications.
5. Avoid surprises through proactive communication
To avoid unexpected surprises in your legal costs, maintain open and transparent communication with your legal professionals throughout the process.
Regularly inquire about any potential changes in billing, the progress of your case and anticipated expenses. Timely communication allows you to address concerns promptly, re-evaluate your financial strategy if necessary and make informed decisions.
Clear communication and managing expectations regarding legal costs are fundamental in effective cost management.
By openly discussing budget constraints, outlining expectations and requesting the terms of business and billing policy from your legal professionals, you can create a solid foundation for transparent communication.
Remember, proactive communication throughout the legal process will help you avoid surprises, foster trust and ensure that your legal costs are well-managed.
◆ To be continued LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.