Tips for Saving Money on Attorney Fees
This is a transcript of a podcast posted April 27, 2009.
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Rich Stim: Imagine this situation. You're sitting in court, and the judge is pounding the gavel, instructing your lawyer to stop fooling around. You're embarrassed, and what's worse, you're paying that attorney $250 an hour -- ouch. Not only did you pick the wrong attorney, but you're paying way too much for his incompetent services. Here are ten tips for choosing the right attorney and saving money on your legal fees. These tips are from the Nolo book Running a Side Business: How to Create a Second Income, by Richard Stim and Lisa Guerin.
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Attorney Tip #1: Start With the Right Attorney
The biggest waste of your time and money will be if you have to fire one attorney and hire a new one, so try to get it right the first time. Look for someone who's attentive and interested in your situation or business. Seek out someone who already knows a lot about the field or about your business, or who seems genuinely eager to learn more about it. Avoid the lawyer who's aloof, doesn't want to get involved in learning the nitty-gritty details of what you do, or doesn't seem to have a lot of experience in the field of law that you're dealing with.
Attorney Tip #2: Don't be Swayed by Attorney Advertising and Avoid Lists of Attorneys Provided by a Local Bar Association
Advertisements found in the Yellow Pages and newspapers, on television, or radio usually say nothing meaningful about a lawyer's skills or manner, just that that lawyer can afford to pay for the ad. You're better off doing research yourself, asking for recommendations from your peers, or working with a legitimate lawyer directory. [Nolo has a lawyer directory at www.nolo.com, which offers comprehensive profiles of the lawyers who advertise there, including each atttorney's education, background, areas of expertise, fees, and practice philosophy. Nolo has confirmed that every attorney advertiser has a valid license and is in good standing with the state bar association where the attorney practices.]
Attorney Tip #3: If You Are in a Dispute, Be Realistic
If you're looking for an attorney because you're in the midst of a dispute, you're seeking someone who can defend your turf against others who threaten you or your business. But don't assume that you need the biggest ape in the jungle -- sometimes a shrewd negotiator or a logical, methodical attorney can be the ideal choice to end a dispute amicably.
Attorney Tip #4: Try for Flat Fee Agreements and Get Your Fee Agreement in Writing
You may have heard the joke about the new client who asked the lawyer, "How much do you charge?"
"I charge $200 to answer three questions," replied the lawyer.
"Isn't that a bit steep?"
"Yes," said the lawyer. "What's your third question?"
When you hire a lawyer, it's important to get a clear understanding about how fees will be computed. As you bring new tasks to the lawyer, ask specifically about the charges for each task. Most lawyers will initiate fee discussion, but some forget, and some are shy about doing so, so bring up the subject yourself if needed. Insist that the ground rules be clearly established, and use flat fees whenever possible, especially for contracts and other types of transactional work.
Attorney Tip #5: Keep Your Phone Calls Short
If you're paying your attorney on an hourly basis, keep your conversations short -- the meter is always running. Avoid making several calls a day; instead, consolidate your questions and ask them all in one conversation.
Attorney Tip #6: Review Billings Carefully
Your lawyer's bill should be clear. Do not accept summary statements such as the single phrase "Litigation work" to explain a block of time for which you are billed a great deal of money, and watch out for hidden expenses; find out what expenses you must cover and what expenses the attorney will cover.
Attorney Tip #7: Educate Yourself
Learn as much as you can about your legal matter and the related law. It's not that hard, especially when you use online legal research tools such as those at Nolo.com, Justia.com, FindLaw.com, and the Legal Information Institute at Cornell Law School.
Attorney Tip #8: Use Small Claims Court
As long as the amount that you're seeking is below the small claims limit in your state and the court has jurisdiction over the other party, you can file in your local small claims court. If the amount you're seeking is higher than the small claims limit, you can reduce your claim and give up the difference in order to take the case to small claims court. Nolo.com has a small claims court area at its website that provides information about each state's limits, as well as suggestions on how to proceed in small claims court.
Attorney Tip #9: Use Mediation or Arbitration
Mediation works best when the parties have an interest in staying on good terms, as is generally the case with neighbors, family members, or small business people who have done business together for many years.
Arbitration is more decisive; it allows the party to avoid a lawsuit and instead hire one or more arbitrators to rule on your dispute. Arbitration, unlike a court ruling, is not appealable. That's why it's called "binding arbitration." Participants in arbitration often hire attorneys, so they may not avoid having to pay legal fees, though it is almost always less expensive than litigation.
Okay, so good luck with your attorney search, and with your fees, and keep in mind that Nolo has its own legal directory with listings of lawyers and their specialties throughout the country. You can find it at www.nolo.com.
For More Information
To learn more about working with an attorney, and saving money on attorney fees, see The Lawsuit Survival Guide: A Client's Companion to Litigation, by Joseph Matthews (Nolo).