The OlyverApp Blog

Five Signs You're Overspending on Lawyers

Lawyers play an important role in business development, and having effective counsel is a must. But some attorneys charge exhorbitant fees and don't begin to add value commensurate to what you're paying. Below are five signs you're overpaying for legal services.

  • You’re being charged over $1,000.00/hr. Bill Gates and Jeff Bezos can afford to pay lawyers who charge $1,500.00 an hour. You . . . not so much. It’s also highly unlikely that your business has the kind of highly complex issues requiring big firm attorneys. Unless FBI agents show up at your office wondering if they brought enough handcuffs for everyone, don’t pay a premium for services almost any lawyer can do.
  • They keep giving you reams of unintelligible documents. If basic documents like bylaws and nondisclosure agreements are 50 pages long and read like the collective works of Dante, you’re being done a disservice. The idea is to make your life easier, not give you a bunch of unintelligible paperwork so you have to call (and pay) repeatedly for an explanation of how it all applies. You shouldn’t need Cliffs Notes to understand a shareholder’s agreement.
  • They nickel and dime you. Did you bump into your lawyer waiting for a table at a restaurant, ask her quick question, and get a bill for $125.00? Find someone who will answer the same question for a beer, or, better yet, because she’s genuinely interested in how your business is doing.
  • You never meet with just one lawyer. If there are three lawyers in the room every time you meet - no matter how simple the issue - you’re almost certainly being overcharged. If you own a small technology company, are discussing employment practices, and Bob from the Oil and Gas Division has been asked to sit in, something is amiss.
  • Your new startup is paying a lot more for legal than accounting. Most startups don't need more than a few routine legal services that should be inexpensive. Setting up the books properly is crucial and can be a lot more work at the beginning. So it should be a red flag if you’re paying your lawyer a lot more than your accountant at startup.
Want more tips for running your business? Follow OlyverApp on Twitter and LinkedIn.