A recent YouGov survey, commissioned by Riverview Law, showed that nearly a quarter of SMEs have no idea of how much to budget for legal fees over the next year. But there are ways to get price certainty on your legal budget. Here are five tips on getting the most out of your legal spend and eliminating any nasty and costly surprises:
SMEs 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. These range from success fees to fixed fees to monthly retainers, and choosing the right option for you can help to 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.
Get as much as you can for free
The ‘ticking clock’ is one of the biggest gripes businesses have with lawyers. But you shouldn't have to pay for every piece of contact. Your legal spend should be reserved for bespoke legal advice, not to pay a lawyer to pull a document 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% of SMEs found their legal advice from free online sources.
Learn from past mistakes
We see businesses making the same costly legal mistakes time and again that could easily be avoided through collaboratively 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.
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.
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. This is changing the way businesses use, measure and buy legal services. Fees are, of course, central to this. For example, a number of firms now 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 don't need to prepare for needing it. Think of it as like buying cover with the AA or RAC. Nowadays people talk about ‘value billing’, which means that rather than being paid as a necessary evil, your lawyers should understand and add value to your business.
The tide is turning on the legal profession. It is a buyers’ market and, by being more assertive, SMEs can take advantage.
Allan Archer is director of Customer Experience for Riverview Law