After my last post, I contacted another attorney who works in New York and is practically family. In other words, he’s someone I know I can trust to be honest and tell me if I’m being a bit over zealous. So with a bit of insight from him, here are a few ideas to keep in mind when working with attorneys (I certainly will in the future):
- It’s your obligation to review the bill within 60 days. Actually, in most states the law states you have 60 days to question any bills and after that it’s understood that you accept them.
- Only you can terminate the relationship with your attorney. When I was reviewing the billing with my attorney I was completely shocked that she suggested we terminate the relationship. With 95% of the legal work done, that certainly wasn’t what I was after so, not knowing any better, I immediately started to back off and reassure her that I appreciated her work. Had I known that she couldn’t legally end the relationship I would have certainly requested she be a bit more forthcoming on the billing I questioned.
- Expect detailed billing. In my instance one simple example was that I was billed 24 minutes for “telephone call with client” that lasted only 15 minutes. Apparently it’s common practice for the lawyer to take a few minutes to review the file and get up-to-date before making a phone call. However, if she is going to bill for that review time her notes should indicate that.
- It’s not unreasonable to expect the final bill to be close to the estimate. No one can predict exactly how long its going to take to draft legal documents, write a custom software program, 0r train your entire staff on a new system or process. However, with experience you should be able to get very close. Providing an incentive to get things done on time is always a good idea. For instance, you should directly ask for a discount on all of the hours that are more than 10% over the estimate. If there’s no penalty for going over, then what incentive does she have to get the work done on time?
- Keep your own records. Never delete any emails from your lawyer. Always try to use a phone where the minutes are tracked so you can reference if necessary. Maybe even keep a spreadsheet with notes including the date, time, and issues discussed on each phone call.
- Ask about a discount for personal vs electronic meetings. Responding to emails and calling back on the phone is WAY more convenient for someone than setting up a personal meeting. They can respond to emails (or call back) at night, on weekends, etc. At their convenience. So why should you be billed the same for both. Personally I’m not aware of a lawyer conceding to this, but it can’t hurt to ask.
- You shouldn’t be billed for time spent discussing the billing or for questions about your invoices. It’s probably a good idea to get this in writing in the engagement letter or at least clarify that this is true for your attorney.
- Clarify their billing for long-distance and fax usage. In the grand scheme of things I probably wouldn’t even bring this up because it’s generally so minor. It’s just rather annoying when I have 3 cell phones and a business phone and I don’t think I’ve ever paid a penny in long distance charges in the last 8 years. Who pays for long distance these days???
If you’ve read my blog about treating your vendors well, you may be wondering what all of this animosity is all about. First off, it’s not animosity at all. It’s simply effective and ethical business. Secondly, as I told my attorney and everyone else, if the work was complete and my bill had come to within 10% of the original retainer and quote I would have never questioned a single thing. Spending hours pouring over phone and email records is about at the bottom of my list of effective business activities, but when it could potentially be costing the business $1000’s, its necessary.
Keep in mind that in some instances a lawyer is absolutely necessary and I fully believe they should be treated with the respect you share with every other vendor. It’s just occurred to me that they need to be managed a bit differently than your average vendor because of how quickly costs can get out of control and blow your budget. That being said, always keep in mind that “the difference between good and bad is in how it’s communicated” and always try to communicate any billing questions as positively as you can.
To your success, Bryan