Source:law365.co

6 Signs your Company is Overpaying for your Legal Services

According to a study conducted by Apperio, 9 departments out of ten are unaware of the amount of money that they have spent on external legal services. This is indeed a shocking statistic, especially when one considers the amount of money that could otherwise be used to improve the business, which is being used to unnecessarily overpay lawyers.

The most surprising insight however is most of these paying arrangements are done through previously agreed-upon sums. The point here is to understand that most individuals do not understand the amount of money they should rightly pay their lawyer for their services and since most lawyers in the market are there to trick you into paying more, you must understand the right lawyer to choose.

This post lists 6 signs to look out for to determine if your company is overpaying for your legal services so that you do not undergo a huge financial loss and can nip the problem in the bud itself.

Transparency is the Most Important Factor

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The legal service that your company is investing in, must be transparent with the service they are providing. Hence, if your lawyer is not sending you an invoice containing the detailed billing that they are charging you for, you need to be worried. A good legal service will provide clear communication that has precise details about all the services provided by the firm. This is important because a good law firm will never charge you for the services that they do not provide and you must be mindful of this. A great method is to include billing descriptions that describe in detail what legal services were provided to the client. Events as minor as meeting with the client to discuss a financial aspect are recorded in these billing descriptions so that the client gets a clear idea about what the legal firm was up to the whole time. If your legal service is not providing you with this, it is a very clear sign that the legal service you have hired is overcharging your company.

Your Legal Service Must Bill you Consistently

Your legal service must bill you consistently. This is the sign of a good lawyer. If, however, your lawyer has been charging you all at once, it might be a sign that your lawyer is manipulating you into paying more. Ideally, your lawyer should be sending out small bills containing detailed information about the details of the legal services provided by their firm. This is the most transparent way in which legal services can function. Hence, legal firms following consistent billing procedures are the ones you should look out for.

Your Legal Service Must Communicate Clearly With You

The flow of the legal services should be clearly communicated to you. This way, your companies know which attorneys are working on your case and those lawyers who have been appointed to review bills. Additionally, the bills sent out should also have proper documentation and should find mentions in the final accounts in case the legalities extend for a long time. The ideal law firm should give you a flowchart of all the processes that the legal services engage in. If your legal service is not providing your company with a detailed flowchart, they are probably overcharging you.

Billing you for Padding Hours

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One of the most significant signs that your legal service is overcharging you is if you are being billed for padding hours. In many instances, to add extra money, lawyers fabricate the time they invest behind their clients. For example, a legal service might bill you for the amount of time they spent traveling to and fro your company office. In other cases, a legal service might claim to have invested eight hours when in reality they have only invested five. Legal services also sometimes unethically charge companies for spending time merely accompanying a client to a place. This is an example of your legal service billing you for padding hours and to avoid this, your company must be aware of such unethical practices.

Charging an Exceptional Upfront Fee

Legal services might sometimes ask for an upfront fee which is an advance of the money that you will pay the lawyers after the end of the case. However, in some cases, legal services demand more than 50% of the entire fees, and this might be a tell-tale sign of your legal service ripping your company off. Additionally, some legal services might also slack off even after you have paid 50% of your final fees and this might require your company to pay even more to make them work better. All of these are glaring signs that the firm providing legal services is unethical and your company is overpaying them.

If Your Legal Service is Justifying an Unreasonable Fee Using the Retention Letter

Source:legalstartups.info

Legal services sometimes refer to the retention letter signed by the client as their consent to paying a large amount of money. There might be numerous clauses about staffing, rates per hour, and the agreed-upon courses of action. However, an ethical legal service will enforce all of these and more but only in the way that the end fee is perfectly reasonable to the client. Legal services understand that their clients might not have the expertise to understand all the nuances of legal jargon and this gives them a chance to charge them exorbitant rates. However, companies must remember that these retention letters are not licenses for the legal services to charge their clients however they wish to.

Bottom Line

In this corruption-filled world, legal services are just another spec trying to rip their clients off through unethical practices. However, there are still great lawyers available. https://openlegal.nl/expertise/ is a firm offering all these and more. Look up their website if you are looking for firms to handle the legal aspects of your company ethically and legally.


Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com