eBusiness Weekly
Arthur Marara
Part Four
There are instances clients have received some shocking bills from their lawyers and end up wondering what model was used to arrive at the bill.
This week we are looking at another strategy that can help you manage your legal costs. This relates to “Regular Review and Negotiation”.
“Regular Review and Negotiation” is a key aspect of effectively managing legal costs. It entails proactively reviewing and renegotiating the fees charged by your legal service providers to ensure that you are receiving the best value for your investment.
By engaging in ongoing discussions regarding the scope of work, hourly rates, and exploring alternative fee arrangements, you can take steps to optimise cost savings while maintaining the quality of legal services.
To begin, it is essential to regularly review the scope of work with your legal service providers. By clearly defining the tasks and objectives of each assignment, you can ensure that you are only paying for the services you truly need.
Through open and transparent communication, you can discuss any modifications or adjustments required to align the scope of work with your specific objectives, thereby avoiding unnecessary costs.
In addition to reviewing the scope of work, negotiating hourly rates is another critical element. The rates for lawyers are governed in terms of the Law Society Tariff. Your legal secretary should have access to these tariffs.
You can also request the same from the Law Society directly for free. You need to ensure that you have an understanding of the bracket your particular service providers falls in.
There is the lower-band and the upper band. You need to check which band is being used.
There is need for an agreement as to the rate you are going to use so that you can have an indication as to what you are looking at in terms of costs.
There is no “magic” about legal work. If you are litigating you need to have an appreciation of basic stages for the case.
In fact, your lawyer should actually give you an overview of what you are getting yourself into and the likely costs for the whole processes.
Get formal communication from your lawyers regarding the course of action and the anticipated legal costs involved.
You need to know basic legal terms and processes so that you can meaningfully engage with your legal team.
If you have internal legal counsel ask them to take you through some basic legal processes so that you are not fleeced in some instances.
Engage in discussions with your legal service providers to determine if their rates are competitive within the market.
This is so especially when the rates to be used are exceeding the standard rates prescribed in terms of the Law Society of Zimbabwe Tariff.
By evaluating the rates and comparing them with other legal service providers, you can identify potential areas for cost optimisation.
Additionally, consider establishing rate caps or negotiating blended rates for routine or recurring work, which can provide cost certainty and predictability.
Furthermore, exploring alternative fee arrangements can prove beneficial in managing legal costs.
Traditional hourly billing may not always be the most cost-effective approach, especially for extended or complex matters.
Alternative fee structures, such as fixed fees, contingency fees, or hybrid arrangements, can align the financial incentives of the legal service providers with your objectives and create cost certainty.
Discussing these options with your legal service providers can help determine the most suitable arrangement for your specific needs and enable better cost control.
Effective negotiation is crucial during these discussions. Prioritise open communication with your legal service providers to establish mutually beneficial terms.
Highlight the value of your ongoing relationship and explore areas where concessions can be made without compromising the quality of the services provided. Negotiating favourable terms can help foster a long-term partnership characterised by cost efficiency and trust.
Moreover, it is also beneficial to periodically reassess your legal service providers by seeking competitive bids or proposals from other firms.
This process can provide you with a benchmark to assess the reasonableness of fees and ensure that you are receiving the best value. It can also serve as leverage during fee negotiation discussions with your current service providers.
Regularly reviewing and negotiating legal fees with your service providers is a critical component of managing legal costs.
By discussing the scope of work, evaluating hourly rates, and exploring alternative fee arrangements, you can optimise cost savings while maintaining the quality of legal services.
Effective negotiation strategies, coupled with periodic reassessment of service providers, empower you to make informed decisions and forge cost-efficient and productive partnerships.
LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.
Arthur Marara
Arthur Marara is a practising Attorney, bestselling author, human capital trainer, business speaker, thought leader, law lecturer, consultant, coach, legal proctor (UZ). He has vast experience in employment law and has worked with several corporates and organisations. He is also a notary public and conveyancer. He is passionate about promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected].
