So you need a lawyer. It happens to all businesses sooner or later, but with most lawyers still charging on an open-ended hourly basis, the ultimate cost is always a big worry.
A recent YouGov survey, commissioned by Riverview Law, showed that many SMEs needed legal advice in the last two years; 15 per cent even ended up in court. But nearly a quarter had no idea of how much to budget for legal fees over the next year.
There are ways to get price certainty over your legal budget. Below are our top five tips to get the most of your legal spend and eliminate nasty and costly surprises.
Tip one: Negotiate hard
Small businesses often get bamboozled by their lawyers and end up paying far more than expected. So start your conversation with any firm by saying you need price certainty.
There are many ways in which you can pay lawyers – ranging from success fees to fixed fees to monthly retainers – that ensure you keep control of your legal spend. And if they won’t agree to them because they have internal billing targets to meet, there are plenty of lawyers out there who will.
Tip two: Get as much as you can for free
The ‘ticking clock’ is one of the biggest gripes businesses have with lawyers, having to pay for every piece of contact. You should be paying for bespoke legal advice, not a document a lawyer just pulls out of a drawer.
Fortunately, there is a lot of free information out there – the Riverview Law Legal Library, for example, contains over 650 plain English advice pages and over 450 documents, letters and templates. One hour of research into this and other sources could save hundreds, if not thousands, of pounds. Our survey found that 14 per cent of SMEs found their legal advice from free online sources.
Tip three: Learn from past mistakes
We see businesses making the same costly legal mistakes time and again that could easily be avoided through collaborative working with your lawyer to fix what keeps going wrong. I come from an employment law background, and have witnessed how businesses can benefit from taking the initiative in reviewing the way they deal with disciplinary matters to forestall expensive problems like tribunal claims down the line.
Tip four: Prevention is better than cure
Don’t wait for the worst to happen; take a pro-active approach to your legal affairs by reviewing the areas of your business affected by legislation and getting a legal health check or document review which can reduce/remove future issues. A common issue faced by small businesses is late payment from customers – simple contracts can be created to help avoid this happening.
Tip five: Shop around – it’s a new legal world out there
The advent of the Legal Services Act, often referred to as ‘Tesco Law’, allows non-legal businesses to invest in and own legal services businesses and provide a dynamic, customer-focused approach to legal services. We are changing the way businesses use, measure and buy legal services. Fees are, of course, central to this – for example, we offer the certainty and security of an annual retainer, where SMEs pay a fixed monthly price in return for as much legal advice as they want.
Legal advice is generally seen as a distress purchase, but that doesn’t mean you should not prepare for needing it – it is a bit like buying cover with the AA or RAC. In any case, you should see it as more than that. Nowadays people talk about ‘value billing’, which means that rather than being paid as a necessary evil, your lawyers understand and then add value to your business. It should not be rocket science.
The tide is turning on the legal profession. It is a buyers’ market and by being more assertive, SMEs can take advantage.