Is it time to get your legal expenses under control?

Until recently, the easiest way to find a lawyer was to call a full-service brick and mortar law firm. While convenient, these lawyers can cost up to $800 or more per hour, depending on who you’re calling and what city they practise in. This can cause a significant impact on your budget for legal expenses.

The good news is that the legal sector is changing and this is creating opportunities for clients.

Organizations willing to take another look at how they spend their money on lawyers can save up to 50% on fees while receiving equal or better quality service.

The legal sector landscape is changing

Many law firms and lawyers recognize that high-priced downtown real estate and $800+/hour fees are not sustainable. Firms and lawyers are designing new business models that offer better value to clients and help control legal expenses.

Innovation

Bay Street law firms have established low-cost service organizations, such as Torys LLP’s Legal Services Centre in Nova Scotia. Some firms, such as Conduit Law and Aluvion, are using innovation to define their brand.

Freelancing Experts

In addition to this trend toward innovation, lawyers are increasingly leaving firms to hang up their virtual shingle. It’s easier than ever before to practise from a home office.

It’s unclear where this is leading the legal sector, but these trends are definitely worth a second look before picking up the phone and calling the downtown lawyer.

The solo/small firm lawyer is an immediate win.  Today’s solo lawyer likely made a deliberate decision to avoid joining a law firm and takes pride in presenting a compelling value proposition for clients. Many have solid experience, come from large firms, or have years of experience working as in-house counsel.

Why would lawyers leave the cushy law firm environment?

More and more lawyers are finding themselves disgruntled by the law firm environment. There are many reasons for this trend:

  • Lawyers have to turn away too many new clients due to conflicts.  The Law Society rules prohibit accepting a client if there’s a conflict. If a partner from the Calgary office represents a client that is in a conflict with a potential client to an Ottawa office lawyer, the Ottawa lawyer may have to reject the new client. Some national firm lawyers report having to turn away 30% of new clients due to national firm conflicts… and so they just leave the firm.
  • Lawyers are increasingly uncomfortable charging the rates the firm requires them to charge; most believe firm-imposed billing rates are unreasonably high.
  • Lawyers also leave because they don’t thrive in the competitive firm environment where partners jostle for clients and billings.

Adding to the impetus to jump ship is how easy it is to set up one’s own law office today. There are widely available user-friendly online practice management and legal research tools that make it possible to leave the firm while continuing to access the very same tools that big firms use. Within a single day, a lawyer can set up shop and be ready to deliver professional services to the standard of any national law firm – including fancy letterhead, website, and automatic invoicing, for less than $100/month.

How does this trend affect legal expenses for clients?

This drive to innovate has given rise to an evolving landscape for the legal sector. It’s unclear what it means for the future, but clients should stay informed. We’re moving to lower cost models and the operational savings can translate to significantly decreased legal expenses for clients.

While cost savings are attractive to clients, they aren’t the only benefit. Lawyers who are outside the law firm can adopt a more flexible approach to their practice. They can offer integrated counsel services (as part-time in-house lawyers) and flat fees without being accountable to third parties for how much they bill or what billing rate they charge. They also carry a significantly lower risk of having to turn you away due to “firm” conflicts.

Will an independent lawyer be right for all legal services needs? Likely not. There will always be a need for national and multi-national law firms. However, solo/small firm lawyers are right for a large percentage of any business’ requirement and they’re worth a look for clients interested in optimizing value for each dollar spent on legal services.

This post was originally published on the RIZEN Business Lawyers Alliance blog.