The right way to hire a lawyer for the maximum benefit and desired outcome can be a daunting and expensive experience. Many people complain of the high cost of hiring a lawyer and the disappointing outcome. However, if you have little knowledge of law and legal process you may not have any alternative but to hire a lawyer to handle your legal affairs.
However, hiring a lawyer should be viewed the same as hiring any professional person, contractor or tradesperson that is going to perform work for you.
You need to clearly define and document the scope of the work. Document what authority you are giving to the person to perform the work, how long the work is expected to take to complete and what is the desired outcome.
The key point is to clearly define and document what you want the desired outcome to be before you hire a lawyer.
Legal Quotation
Always get an estimate or quotation first before any work commences.
Some industries are well organized and regulated. For example, engaging a building company to build a house is regulated and controlled by a governing authority. The builder must provide a detailed contract containing information about site works provisions, drainage plans, floor plans, electrical plans, inclusions, color scheme, fixtures & fittings, construction timeframe, allowances for poor weather, what happens if the builder goes into liquidation, construction insurance, etc. The owner, local council and financier approve the contract before the commencement of construction.
However, the legal industry is not as well-regulated although there are guidelines set out by the Law Society.
A lawyer may commence work for you before informing you of the likely outcome and cost of completing your legal matter.
A law firm will very quickly accrue legal costs for basic ground work activities relating to your matter. Considerable legal fees may accrue before you receive any tangible outcome. If you terminate the legal work before the legal matter is completed you will pay considerable legal fees for work that does not result in any tangible outcome.
Warning: Never ask a lawyer to commence work on a legal matter before you have provided a scope of work, what is the desired outcome and have received a costs estimate and timeframe for the work.
Generally, most legal professionals are required to provide a costs estimate of their professional fees and outlays to complete or resolve your legal matter. However, these estimates are designed for the most basic matter, fairly inaccurate and full of provisos. As a result, most legal matters cost much more than what is initially quoted to clients.
How Do Lawyers Charge Fees?
Legal fees will include:
- The complexity of the work required to complete the legal matter.
- The time for legal staff to complete the work.
- Professional fees of tax agents, valuers, solicitors, real estate agents or stockbrokers
- Transfer fees for property title or motor vehicle registration
- Advertising fees for Public Notices in newspapers or legal gazettes
- Document filing fees charged by Courts of Law
- The costs of postage, telephone, photocopying and other associated expenses
These costs can easily escalate due to:
- the complexity of the matter as it progresses
- delays experienced which are not the fault of the firm
- discovery of new information
- lack of full and proper instructions from you
- if your instructions change
How Do Lawyers Charge for Services?
Most lawyers will not work on a fixed price basis. They always bill on a time and material basis. The only exception is a “no win, no fee” agreement where the law firm will not charge a fee if they don’t win your case. These arrangements are usually only applicable to recovering a payout from an insurance policy for damage or injury. Usually they will only agree to a “no win, no fee” arrangement when they are fairly certain they will easily win the case especially when there are already similar case law outcomes in their favour.
The law firm know there is a potential lump sum payout and are guaranteed to be paid if they win the case. However, the law firm will ask for a high percentage of the payout, for example, 20% to 50% of the payout. This high payout ratio is designed to cover the costs of the cases they don’t win. In reality, law firms are profiteering on the public’s lack of knowledge of legal process.
What many people have experienced is that if one law firm agree to a “no win, no fee” agreement you can save a lot of money having another law firm take the case to Court on a time and materials basis. This is especially true for large insurance claims.
For example, your potential insurance payout is $300,000. Your lawyer will enter into a “no win, no fee” agreement at 40% of the payout. Why pay $120,000 legal fees when you could take it to court for a lot less on a time and material basis. Of course, only do this if you are very sure you will win the case.
Do Large Law Firms Charge More than Small Law Firms?
There will be no difference in the cost of engaging a large or small law firm. The applicable Law Society govern the charge rates which are the same for all lawyers. So don’t think that you will save money going to a smaller law practice – it usually makes no difference.
However, a prestigious law firm with highly sort after lawyers will charge more for their services than other law firms.
Please read Probate: The Right to a Deceased Estate
Don’t Pay Unnecessary Legal Fees
Law Firms charge huge amounts of money to complete simple tasks that you can do yourself.
Don’t pay for rorts such as:
- “Drafting legal documents” that are nothing more than simple template forms, freely available to the public, and downloadable from Government websites.
- “Filing fees” for lodging a form and paying a fee which you could do yourself.
- “Perusals of legal documents” which is the lawyer checking a law clerk has completed a form correctly (typically $30 per page).
- Charges for searching public records for items you already know about.
- Charge you for phoning your lawyer to enquire about the progress of your matter.
- Charge for a law clerk to attend your presence when signing a document.
- Charge for “typing a letter” to inform a Bank that their customer has deceased.
- Charge to receive an email.
- Charge to receive your phone call taking a message to return your call.
- Charge for receiving your phone call when you advise the law firm their services are no longer required.
- Charge $20 postage to mail a standard letter where the stamp costs $1.
- Charges for intra-office emails between employees of the law firm.
- Charge for their quotation of services.
- A charge for “Care & Consideration” which is up to 30% of the total professional fees added to the end of your invoice.
Other Rorts
Care and consideration is a charge in addition to set fees. The extra charge compensates for work done, for which the court’s cost scale doesn’t adequately provide given the nature or complexity of a matter. Care and consideration is not appropriate for routine tasks requiring basic legal skills. A lawyer, paralegal or clerk could perform those routine tasks.
One of the biggest rorts is lawyers charging clients for “drafting” legal documents that are nothing more than template forms easily downloaded from any government or court website (or visit the government or court office to pick up the forms and instructions) . Anyone can complete these forms when following the instructions.
Law firms also like to charge for “drafting” an agreement or contract, such as, an application for probate as though they have drafted the entire document just for you. The reality is they have used a template document or drafted the document years ago for one client and have been reusing the same document over again with some very minor changes for each client.
First Consultation to Hire a Lawyer
Usually, depending on the lawyer, you can have a complimentary first consultation with a lawyer to discuss your issue and determine if a lawyer can help you.
Make sure you inform the lawyer (or the receptionist) when making an appointment that you are only wanting to speak with a lawyer and you are unsure as to whether you actually need a lawyer. Typically, this meeting will only be 10 or 20 minutes maximum.
This free consultation can be very useful to discover what a lawyer can do for you and roughly how much it will cost. Prepare yourself to ask the right questions to extract information that will be valuable to you.
The real purpose of this meeting is to try to uncover the first steps you need to take to resolve your issue. For example, your relative has died without a Will and you want to know who is legally entitled to the assets of the deceased estate.
Don’t Disclose Unnecessary Information
At this first meeting, do not give the lawyer your personal details or any details about your legal matter. You may tell them your name but do not give them your address, place of work or any other information. This prevents the lawyer from taking your visit to mean you have engaged their services and they have the job. Many lawyers may commence preparing legal documents, contacting related parties (and other legal nonsense) and invoice you for this unauthorized, incomplete work that is of no value to you.
They may also try to invoice you for their time. Lawyers often inform potential clients that the first meeting is complimentary. Later the client finds out that the lawyer has invoiced the client for that meeting.
Define Your Desired Outcome
What you need to do is clearly define your desired outcome and work backwards to find out the legal processes to attain that solution. For example, a relative (eg your parent) has deceased and you want to wind up the deceased’s estate and distribute net assets to the beneficiaries. You want to know what your options are for managing the estate.
When meeting a lawyer for the first time, concisely state what your issue is and ask whether the lawyer can assist you. For example, “My sister has died and I need to administer her estate”. “How should I go about administering the estate or can you perform these duties on my behalf?” Do not give the lawyer any information about the deceased. Do not tell the lawyer about the deceased person or what assets and liabilities exist. It is way too early in the process to discuss any details. All you are trying to do is establish what the lawyer can do for you, the legal process how long it takes and how much it costs.
Always Ask for a Quotation
Always ask for a written quotation for the work with details of each step in the process. It is important to get a detailed quotation because we are trying to learn what steps to take to resolve the matter ourselves.
Indicate to the lawyer that you may be able to perform some of the work yourself.
Ensure that you inform the lawyer that only on your acceptance of the quotation will he/she be awarded the work. At this stage, you have not given the lawyer authority to represent you or perform any legal work. All you have requested is a quotation.
Legal Invoices
Legal invoicing usually lacks line items for each task performed in a process. Instead, most legal invoicing will simply contain one line for work performed to date and the total amount due. This prevents clients trying to dispute an amount charged for a particular task. Lawyers frequently try to overcharge their clients especially for deceased estates because they know the client is inheriting money. Most quotes from law firms are inaccurate and almost always understated. They encourage you to sign up and let the law firm handle the matter. What most people don’t realize is that lawyers will charge high fees for performing simple administrative work that almost anyone could do themselves.
Now remember, all we are trying to do here is find out, without charge, the legal steps to resolve your issue.
Multiple Interviews to Hire a Lawyer
If you cannot learn much from one lawyer speak to another lawyer. Sometimes you may have to interview several lawyers and conduct some basic research before you have gained enough information to feel confident to handle some or all of the matter yourself. This process of discovery gives you the power and knowledge to understand what legal steps you can perform yourself. This will help control how much it will cost you.
The few hours it takes to interview a few lawyers and conduct some research on the internet will save you thousands of dollars in fees. Many people who engage lawyers to perform work, receive an invoice for thousands of dollars, only later to find out they could have easily performed the work themselves.
Fixed Fees to Hire a Lawyer
One approach to hire a lawyer is to try to negotiate a fixed fee for your matter. This may be more difficult to negotiate as most lawyers only work on a time and materials basis. Also, the lawyer may not be able to easily ascertain the level of work involved until more details of the issue are given.
Another approach to hire a lawyer is to limit the lawyer to only a specific piece of work. For example, the application for probate of an estate where there is a valid Will. Once you have the court order for probate you can carry on with managing the deceased estate yourself.
Engagement Letter to Hire a Lawyer
If you have decided to engage the services of a lawyer you need to control every step of the process. You need an engagement letter to outline the basics of your relationship with the law firm.
Always provide clear instructions in writing to your lawyer as to what work you are authorizing the lawyer to perform. State that your lawyer needs your express authority before performing any work.
For example, you are administering a deceased estate and you want to perform the simple tasks yourself.
Do not give the lawyer any information regarding beneficiaries, assets, liabilities or distribution to beneficiaries. Only give the information when the lawyer needs it to perform a step in the legal process. Try to perform the step yourself first. Only if you run into problems then you can hand it over to a lawyer to complete the task.
Conclusion
Remember before you hire a lawyer they are really just “middlemen” for dealing with Government agencies and Courts of Law.
A good lawyer will know the best course of action for your matter. It is a myth that a good lawyer can somehow circumvent the legal process, speed up an application or dismiss charges when you are guilty.
Many people tend to avoid lawyers as much as possible. The effort required to deal with them (engagement, meetings, providing information, negotiation, follow up) is usually the same or more work than just doing it yourself. And it’s better to control the process yourself so you know what is really going on.