Legal fees are a cost of doing business. While the Web has made it easy to do some of the very mundane work on your own (say, filing for incorporation or ginning up a bare-bones operating contract), do-it-yourself lawyering has huge limitations.
The trick is finding and hiring the best, most trustworthy professional help for the buck. I'm going to help you.
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First,
start with your inner circle: friends, neighbours and colleagues. This initial search may not turn up any attorneys with the specific expertise you need, but don't despair. While your sister's divorce lawyer may not be much help when it comes to selling your business, he may know a few attorneys perfect for the job. Lawyers know other lawyers—use them for recommendations.
Don't want people to know you need legal help? You can hunt on the sly by contacting local bar associations. They have lists of attorneys. Beware, though: The bar association hasn't blessed those attorneys, beyond perhaps assuring they are licensed to practice and have not been disbarred. Further due diligence is still required.
Next step:
Hit the Web. To be fair, there are still a few accurate rating systems for lawyers. One useful online resource is martindale.com, which rates lawyers on a scale of A, B and C. Those ratings are done by other lawyers and are fairly reliable. Martindale also offers additional information on attorneys, but be aware that the attorneys themselves prepare those write-ups. Lawyers.com and findlaw.com can help too, but understand that attorneys pay to be listed there.
Once you assemble a short list, remember that
size matters. Law firms range in size from one lawyer to over 3,000. If you are Gordon Gekko and want to do a hostile takeover of Bluestar, think big firm. If you are looking for someone to negotiate a lease for your new office, a small shop will be able to handle that as well, if not better. (After all, you don't want a marquee firm letting its younger, more inexperienced staffers learn on your dime.) Remember that letters to legal opponents from big shops tend to carry more weight.
Next step: At this point you're ready to set up an initial consultation. But before you pick up the phone, do even more homework. Check each attorney's Web site. Does it look cheap or professional? Is there a lot of sizzle but little substance? Next,
check their track records—as in how they fared in specific decisions. While subscriptions services, such as Westlaw, Lexis or PACER, are happy to sell you this information, your local law library can probably get it for a lot less.
At your first meeting, be ready to
ask a lot of questions regarding both your particular matter and the lawyer's practice. Some good ones: How many similar matters have you handled? What were the results of those cases? Which lawyer in the firm will be working on your case? Will there be any limitations on the scope of the representation? How will you be kept informed about the progress of the case? How quickly do you respond to phone calls and emails? How can I reach you after normal business hours?
The lawyer may charge you for the initial consultation. Don't take this as an affront. Many potential clients use these get-to-know-you sessions to get free legal advice. (If you owned a grocery store, you wouldn't let someone try a brand of paper towels to see how they work and then, maybe, pay for them.) If the attorney does charge, simply ask if the amount will be credited to the bill later on.
Which brings me to fees. Whatever you do,
understand precisely how you will be charged—this will save you all sorts of headaches later on.
Lawyers generally charge one of three ways: by the hour, a one-time flat fee or by contingency (percentage of the amounts recovered). Not every fee structure is permitted for every legal situation. For personal injury cases, most lawyers charge a contingency fee; for certain business transactions (such as incorporation), they'll charge a flat fee; and for most other matters, they will ring up by the hour.
Hourly rates can range from US$100 to US$1,000. (Generally speaking, you get what you pay for.) Bear in mind, too, that an attorney who charges US$200 per hour may take twice as long to do the same thing as an attorney who charges US$300 per hour.
There are additional questions you should ask, depending on the type of fee structure. Example: If the engagement is on an hourly fee basis, you will want to know (1) the hourly rate, (2) the minimum billing increments, (3) whether there is a charge for every phone call, letter and email, (4) an estimate of the number of hours the case will take (I find this question very difficult to answer), (5) what expenses might be required and (6) what happens if the case takes longer than anticipated. (Many of those same questions are relevant in flat-fee agreements too.)
If yours is contingency arrangement, you will want to know (1) the likelihood of recovery (remember, there are no guarantees in the law), (2) an estimate of the recovery (same warning), (3) the percentage being charged, (4) the percentage most lawyers charge for the same type of case, (5) anticipated expenses and (6) what happens if the case settles immediately.
Get a handle on all of that and you'll be ready to
ink an engagement letter. This is your working contract between you and your attorney, so read it carefully. The engagement letter should describe the nature of your legal matter, as well as all of the terms and conditions of the relationship, including the hourly rate, the minimum billable increment (you should always insist on being billed in six-minute increments, not 15), the expenses you will be responsible for, the amount of the retainer and any other matters you agreed to.
If you are unsure about something in the engagement letter, call and ask. Otherwise, if you sign and return the letter, you will be bound by it.
The work doesn't end after you ink that contract, of course. Ask your lawyer to provide you with copies of everything that goes out relating to your case (the cost of the copies will most likely be passed on to you). I find that providing too much information is better than not providing enough.
Think your attorney missed his calling as a golf caddy? Fire him. After all, you control the relationship.
If you owe money, your lawyer may insist on being paid before turning over your file to you or his replacement. And don't think you are at a disadvantage because lawyers run the bar associations—attorneys do a good job of policing themselves.
Happy hunting.
Rob Bovarnick is the managing partner of Bovarnick and Associates, a Philadelphia-based business law firm representing businesses and entrepreneurs in general corporate and business matters, litigation and business bankruptcy. He can be reached at rmb@rbovarnick.com.
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In Pictures: Eight Tips For Hiring A Great Lawyer
