Saturday, March 26, 2011

And speaking of billing ...

What's the deal you make, when you enlist the services of a lawyer?

You don't "hire" them; they aren't your employee. When you enlist the services of a lawyer, you "retain" them? Any idea what that means?

When you get the "Engagement Letter" from your lawyer, you'd better take it to another lawyer and buy 30 minutes of time for a legal explanation and interpretation of its meaning. It may be "what" the Letter says; it may be what the Engagement Letter doesn't say!

Do you really need a lawyer to protect you from your (own) lawyer? Well, you just might.

After an initial consultation on a legal matter, you might decide that you want a certain lawyer to represent you. You may or may not be charged for the initial consultation. When you call to make the first appointment, ask if there will be a charge. If there will be, understand what the charge is for, how long the initial appointment will be and, most importantly, what will be discussed. And how much the fee is for the initial interview.

Generally, a lawyer will not discuss the specifics of your case before he is retained. And he shouldn't. He deserved to get paid for his time and legal advice on a car. There is no reason he should give you legal advice for free. But should you have to pay for the "sales talk"?

The initial appointment is for you to size up the lawyer and determine whether he (or she) can handle your case, whether you want that lawyer to handle your case and how much it might cost you. Key word: "might". And it is an opportunity for the lawyer to size you up and determine whether he wants to handle your case and whether he'll get paid for doing so.

Before moving ahead on your case, your lawyer ought to send you (or give you on the spot) an Engagement Letter. This spells out the terms and conditions of the legal relationship between the lawyer and you, the client.

You had better read it two-three times and make sure you understand it. Unfortunately, you may not have the skill to "read between the lines" and discern what it does not say, which might come back to bite you in the future.

It will often mention the hourly rates for the several levels of expertise in the lawyer's firm, such as the rate for the "name on the door" (the partner), the associate attorney, the paralegal and the secretary. It will mention "expenses". What are they?

It will likely mention the amount of retainer and by when it is to be paid. This is money you place on deposit with the lawyer, against which he bills his rates.

What happens when your retainer is exhausted? This can happen very quickly when a lawyer bills at $300-400/hour. And what happens when two lawyers work on your case? Bingo! If one bills $400/hour and the second bills $300/hour, your money is being sucked out of the retainer at $700/hour, when the two of them sit down together.

Did you stipulate that a certain attorney (certain billing rate) only is to work on your case? Did you tell your lawyer that only one (1) lawyer is to work on your case? In other words, no double-dipping?

Did you put it in the Engagement Letter? If you didn't, guess what?

Your retainer can be gone before you ever receive the first accounting statement. Did you tell your lawyer, in writing, not to exceed the retainer without written approval from you? In other words, when they have blown through the retainer, are they to stop working on your case until you give them a green light to proceed?

Don't end up with a big surprise (shock), when you open the envelope from your lawyer after a month or two.

Believe me; I'm not making this stuff up!

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