Unlocking the full potential of your lawyer
Managing your relationship with your lawyer for maximum business value
Successful businesses often have strong, effective relationships with their professional advisers. However, many businesses only engage with lawyers at the last minute and/or in an emergency, where the requirement for urgent work from a standing start usually results in a hefty bill. So how can you better manage your relationship with your lawyer to ensure you get the best results and cost-effective advice?
Strategic risk management
Our first suggestion would be to start thinking of your legal adviser as a strategic partner rather than as a last resort. An early 'steer', whether in a relationship with a supplier, or in a potential dispute, can often prevent significant problems further down the line.
Often we see clients only come to us for help when 'the damage has been done', which makes it much more difficult (and consequently more expensive) to get a positive result for the client. Many businesses invest heavily in insurance to mitigate risk, but overlook other forms of risk management, such as early and proactive engagement with their legal adviser.
Clear communication
Effective communication is the foundation of successfully managing your relationship with your lawyer. Be clear and transparent about your objectives, concerns and expectations from the outset. Providing all relevant information early on enables your lawyer to scope all the issues from the outset and thereby should enable them to give you much more accuracy and transparency on the price of their advice.
Agreeing on preferred communication methods - whether by phone, email, or in-person meetings - can be helpful. Bear in mind that frequent, scattergun emails demanding urgent advice is likely to increase costs. Consolidating queries into one meeting or set of instructions, enabling all the issues to be addressed in one pass, is the most efficient process – and therefore also the most cost-effective process from the client’s point of view.
All clients are different and tend to want slightly different things (or the same things done in slightly different ways) so give feedback to ensure your adviser provides what you’re after (and if they still cannot provide that after feedback, try someone else who can!)
Proactive management
While no agreement can completely eliminate the possibility of disputes, engaging with your lawyer to audit existing contracts - such as employment agreements, supplier arrangements, or partnership terms - can help identify risks and fix them, or strengthen your position should issues arise in future.
Equally, if you plan to sell your business in the next few years, start thinking now about the agreements, policies and procedures that you’ll need to have in place to show potential buyers that you’re selling a well-managed business that will continue to thrive when you’ve sold it, thereby increasing sale value and hopefully also streamlining the sale process.
A fixed-price audit of your standard terms and conditions of sale is a good starting point and can be a particularly valuable investment, as these terms usually underpin most, if not all, of the revenue of a business. Many standard terms that we see have not been reviewed for many years. Often they simply no longer reflect the way the business in question actually operates. Sometimes they are not used (or 'incorporated') properly, meaning that they do not actually apply to govern the relationship between the parties.
Ensuring standard terms are clear, enforceable and aligned with current regulations can help prevent costly disputes, strengthen your commercial position in negotiations with customers, and improve your position with potential buyers of your business.
Understanding how costs work
Legal costs can be a concern, but understanding how they are structured can help you manage them effectively. While charging on hourly rates (essentially a 'time and materials' rate) is less common these days than in the past, they are still often used in certain areas such as in litigation, and even when they do not form the basis of actual charges they often still form the basis by which fixed fees are calculated.
Ask your lawyer at the outset about available pricing options. These should include both estimates and fixed fees (the fixed fees usually being priced at a premium to any cost estimate based on hourly rates – as the risk of cost overruns is passed from the client to the lawyer).
Other costs options that, where appropriate, could be discussed with your lawyer include so-called 'cap and collar' arrangements, whereby the pain of costs overruns is shared between the parties but equally the benefit of coming in under budget on the project is also shared between the parties.
As matters progress, ensure that your lawyer provides regular cost updates to help you stay in control of your costs exposure. This is particularly the case in dispute/litigation matters, where costs can escalate quickly if not closely monitored.
Embrace the power of a retainer
One of the most effective ways to manage your relationship with your lawyer in areas such as commercial contracts and employment law is through a retainer arrangement, which provides priority access to legal expertise without the delays of initiating new engagements.
A retainer usually provides ongoing support for a fixed monthly fee, which typically includes a discount on the usual charge-out rates. This makes it a cost-effective solution, and very manageable for cash-flow and budgeting purposes, for businesses that require ongoing legal support.
A retainer agreement also fosters a deeper lawyer-client relationship, providing continuity and allowing your lawyer to develop a thorough understanding of your operations. This enables them to offer tailored, strategic advice that mitigates risks before they escalate, reducing the need for urgent or reactive work at premium rates.
In conclusion, we’d suggest that managing your relationship with your lawyer and maximising the value you derive from them is not just about saving money - it’s about managing risk, seizing opportunities and ensuring peace of mind.
What can we do to help?
To discuss a bespoke commercial contract retainer, please contact either James Sarjantson on 0113 201 0401 – ku.oc1742499990.fcl@1742499990nostn1742499990ajras1742499990j1742499990 or Thomas Taylor on 0113 204 0407 – ku.oc1742499990.fcl@1742499990rolya1742499990tt1742499990.
For information on LCF Works, our on-demand expert employment law and HR support service retainer, please contact James Austin on 01423 851 138 - ku.oc1742499990.fcl@1742499990nitsu1742499990a.sem1742499990aj1742499990.
