Every great entrepreneur knows that lawyers are a vital component to the success of any business venture. They help the corporation or entity through its formation process; establish corporate governance policies and procedures to ensure compliance with state and federal law; draft contracts which protect the critical interests of the organization; and negotiate deals, on behalf of the client, that are designed to move the company in a positive direction. All of these services come at a direct expense to the business. Contrary to what lawyers believe, they do not make businesses money, they are purely on the expense-side of the general ledger. With that said, then why on earth would a solo practictioner, like myself, whose revenue is entirely dependant on hours billed want to talk about the subject of lowering legal expenses.
Every lawyer should at least mention ways of off-setting legal costs to their clients. It all comes down to how the client "views and values" his or her TIME! Some entrepreneurs envision themselves as the innovator/salesman of their widget, and not a legal scribe – those are the ones who will want their lawyer to handle everything from soup to nuts. Other entrepreneurs feel like a contract is a contract, and there is no reason to pay for a lawyer to write something they can do themselves. Forbes.com published an excellent article that advises its readership on ways to minimize legal expenses. As I began to read this, my first thought was "oh my gosh, here is another one of those you-don’t-need-a-lawyer-to-do-that suggestions."
The article mentions (probably at the request of its legal counsel) that the "do-it-yourself" approach is a "you-get-what-you-pay-for" result, but there are a few suggestions that are worth reviewing. I take a much more different approach – call me bias, but one only need sit at my desk to see all the "sophisticated" entrepreneurs who thought they could do-it themself. Any cost-cutting measures an entrepreneur makes, in relation to his/her legal expenses, should be done in collaboration with an attorney (huh?). When first meeting with an attorney, ask them if there is anything they can do to assist in the process, in order to minimize costs. An attorney worth his/her salt would be encouraged, and appreciative, of the assistance. For example, filing articles of incorporation with the Secretary of State’s Office can be collaborated on – have the client enter in the information, and right before submission, have the attorney review it. In this way, the client is getting exactly what he/she wants – expert oversight to ensure that all rules and regulations are complied with. The attorney is in no better position than the client to go online, click on the website of the Secretary of State, and begin to fill out questions that the client can answer.
Collaborating with the client also has tremendous advantages economically for the lawyer – allowing the client to take responsibility for miniscual tasks (e.g. filling out forms, delivering documents, etc.) will (1) enable the lawyer take on more clientele, thus allowing for greater earning potential at the law firm; and (2) develop a much stronger RELATIONSHIP with the client which will translate into long-term business. Inclusion of the client will provide them with a sense of empowerment and confidence that will benefit their company, and ultimately the law firm’s revenue.
Thus, the successful entrepreneurs should, unlike what our friends at Forbes.com say, NEVER try to do legal work on their own. Reason being: if there is a mistake, the cost to pay an attorney to undue that error or omission will potentially expose the company to greater legal fees. However, if cost is a concern, then ask the attorney if there are things the entrepreneur can do in order to minimize legal expenses. In this scenario, every one wins, even if lawyers are purely an expense to the organization.
To read more about the Forbes.com article click here: How to Lower Your Legal Bills