In the old days of legal billing, lawyer's invoices — usually a single page of elegant letterhead—contained only the phrase, "legal services rendered," and a hefty dollar amount. No time breakdowns, no list of activities performed or equipment and supplies used—just a final, usually shocking, charge.
But client demands and the evolution of sophisticated billing software have led to more detailed invoices today. Itemized statements have triggered discussion among businesses about whether hourly billing is the best way to be charged for legal services. As the legal profession becomes more competitive and dependent on high quality customer service, lawyers need to embrace alternate billing methods.
Fixed or flat fees, contingency fees, non-refundable retainers with discounted hourly fees, blended hourly fees and variations on those themes are becoming increasingly common. But many law firms have been slow to join this trend — lawyers still perform approximately 95 percent of their corporate legal work on an hourly basis.
What does that mean for your small business？ If your company is currently working with a law firm or looking for legal counsel, try requesting alternate billing options. While many law firms rarely initiate different options, they'll negotiate when brought to the table. If you want something better than the old "bill by the hour" deal, try presenting one of these billing structures：
Project billing for routine issues
Questions To Ask Your Legal Counsel
Is the attorney experienced in business law or just practicing it between drafting wills and selling homes？
Does the attorney give advice in plain language or does he use a lot of jargon？
Is there good "chemistry" between you and the attorney？
Are the attorney's ethics and goals clear？
What's the attorney's track record with other businesses similar to yours？
If your legal needs include large but repetitive tasks, consider a flat-fee approach, also known as project billing. If you need legal assistance on a large research project involving several repetitive tasks with a fair amount of predictability for cost estimation and time duration, request a dollar cap for predetermined services. Be sure to compare estimated costs at the equivalent hourly rate—a projected cap that far exceeds any likely bill is really no cap at all.
But client demands and the evolution of sophisticated billing software have led to more detailed invoices today. Itemized statements have triggered discussion among businesses about whether hourly billing is the best way to be charged for legal services. As the legal profession becomes more competitive and dependent on high quality customer service, lawyers need to embrace alternate billing methods.
Fixed or flat fees, contingency fees, non-refundable retainers with discounted hourly fees, blended hourly fees and variations on those themes are becoming increasingly common. But many law firms have been slow to join this trend — lawyers still perform approximately 95 percent of their corporate legal work on an hourly basis.
What does that mean for your small business？ If your company is currently working with a law firm or looking for legal counsel, try requesting alternate billing options. While many law firms rarely initiate different options, they'll negotiate when brought to the table. If you want something better than the old "bill by the hour" deal, try presenting one of these billing structures：
Project billing for routine issues
Questions To Ask Your Legal Counsel
Is the attorney experienced in business law or just practicing it between drafting wills and selling homes？
Does the attorney give advice in plain language or does he use a lot of jargon？
Is there good "chemistry" between you and the attorney？
Are the attorney's ethics and goals clear？
What's the attorney's track record with other businesses similar to yours？
If your legal needs include large but repetitive tasks, consider a flat-fee approach, also known as project billing. If you need legal assistance on a large research project involving several repetitive tasks with a fair amount of predictability for cost estimation and time duration, request a dollar cap for predetermined services. Be sure to compare estimated costs at the equivalent hourly rate—a projected cap that far exceeds any likely bill is really no cap at all.