The high-fee culture that's hobbling British business
Another week, and yet another critical item in the press on the cost of obtaining corporate legal advice. And to be sure, it’s certainly a fairly open goal at which to aim. For while ‘fat cat’ lawyers may not attract quite as much popular opprobrium as ‘fat cat’ bankers, to many the distinction is largely one of degree.
The trouble is, there’s actually a downside to all this. A downside, what’s more, that affects a vast array of businesses, even those far from the orbit of the City and the upper echelons of British industry.
And it’s this: the perception of the high cost of corporate legal advice is damaging in itself—not to lawyers, but to corporate clients and would-be corporate clients.
Because that perception of high costs acts as a deterrent. So that when businesses ought to be taking legal advice, they’re not. With the inevitable result, of course, that things can all too easily go wrong.
Fanciful? Hardly. In fact, in many of the businesses that we’ve come across over the years, even quite senior executives have been discouraged from picking up the phone and speaking to a lawyer—thanks to worries that the fees-clock will start ticking, and that a significant expense exposure will consequently be triggered.
The result has been something of a ‘two track’ economy. On the one hand, there are the FTSE’s very largest organisations, where legal fees are seen as a tiny part of the cost of doing business. And on the other hand—well, there’s everyone else.
Yet, oddly enough, there’s a wind of change abroad. Partly due to the recession, and partly due to changed corporate procurement practices, businesses have at last been putting pressure on law firms to amend their pricing and charging structures.
But while this is to be welcomed, the result hasn’t always been what corporate clients may have envisaged.
For one thing, in order to maintain profit margins, it’s a fairly open secret that firms have been expanding the number of junior lawyers that they allocate to client work. The good news: you’re paying less in fees. The bad news? The calibre of the lawyer actually working for you often reflects that reduction in fee.
Is there an alternative?
Here at The Legal Director, we certainly like to think so. Which is why, when we work for you, your costs are fixed and known in advance.
How does it work? Two ways:
- First, a fixed-fee retainer. Many businesses—especially fast-growing businesses, or those in a fast-changing environment—need legal advice, but don’t always know in advance what sort of legal advice they’ll actually need. So we’ll assess the likely number of days of work per month, and quote a fixed fee for that amount of work—whatever it may turn out to be. The power of this approach is that there is never a disincentive or deterrent to picking up the phone and obtaining legal advice. The cost is already priced-in, and known.
- Second, working on a project-by-project basis. When the volume of legal work varies substantially, perhaps with events that are themselves variable (such as buying a new business, building a new factory, or some other major development), then we’ll quote a fixed fee for that work. Which subsequently then won’t change.
Disbursements to third parties are extra, but they are the only thing that is extra. Everything else is taken care of in the original quoted fixed fee.
The client perspective
Clients, needless to say, like our approach. They tell us that it gives them certainty of pricing, and certainty as to what they’ll pay. What’s more, they can forecast their legal costs for a full budgetary year, knowing that there won’t be a variance.
Better still, they know that the money that they’re paying is getting them guaranteed access to seasoned, veteran corporate lawyers—and an ease of access that’s akin to popping down the corridor to bounce an idea off a trusted colleague.
Simply put, at The Legal Director, we specialise in providing clear-cut legal advice in business-friendly language. Providing it affordably, to suit a business’s own needs and workloads. And providing it in a range of offerings stretching from a fixed-fee monthly retainer starting at £100 + VAT for telephone advice, to your own part-time legal director, working alongside your own board of directors.
To find out more, get in touch by calling Kirstie Penk on 01709 641 711.
Posted Tuesday, November 11th, 2014 by Warren RylandTweet
Other Articles In This Category
- Did you negotiate your last loan agreement - or just sign on the dotted line?
For businesses wanting to grow or invest, external finance can be an attractive option: access to the funds that they need, without equity dilution or... read more
2nd of November 2017 by Warren Ryland
- Protecting the value of your newly-acquired businesses can be a challenge
Buying a business is exhilarating. Hard work, to be sure - but undeniably exciting, and with a rich sense of the opportunities that lie ahead. So perhaps... read more
2nd of October 2017 by Warren Ryland
- GDPR. The clock is ticking: a tough new take on data protection is fast approaching
With effect from 25 May 2018—in other words, less than a year away—your business is exposed to a new regulatory regime backed by hefty fines. And by... read more
6th of September 2017 by Warren Ryland
- Persons of Significant Control: important changes to reporting requirements
It’s barely a year since the introduction of the PSC regime - and already, the compliance requirement has been tightened. And at a time when many businesses... read more
23rd of June 2017 by Warren Ryland
- Avoiding conflict when forming a business: probing questions for potential partners
Every year, several hundred thousand new businesses are created. In 2015, according to the Office for National Statistics, the total was 383,000—the highest... read more
28th of April 2017 by Warren Ryland
- Is your business at risk from the Uber decision? Why your self-employed contractors could really be employees
Fuelled by companies such as ride-hailing business Uber and personal courier firm Deliveroo, the so-called ‘gig economy’ is on the rise. So much so,... read more
12th of January 2017 by Warren Ryland
- The Legal Director - Commended for Innovation in the FT Innovative European Lawyers awards
Law firm The Legal Director (TLD) has been commended in the FT Innovative European Lawyers awards, which were announced at the beginning of this month. TLD ranked... read more
28th of October 2016 by Warren Ryland
- Debt versus Equity - Financing for SMEs
The need for additional finance is often the price of success for small to medium-sized enterprises (SMEs) that are looking to grow. The question that faces the... read more
14th of October 2016 by Warren Ryland
- The deceptive complexity of the Modern Slavery Act
At the end of July, Prime Minister Theresa May launched a cabinet-level government taskforce to eradicate modern slavery in the UK. It was, she said, “one of... read more
31st of August 2016 by Warren Ryland
- How our clients will benefit from the Bar Council's escrow account
Outside the narrow realms of consumer technology, there’s often an inevitable trade-off between cost and quality. In other words, you can have something at... read more
7th of July 2016 by Warren Ryland
- As the net starts to close, the Bribery Act prosecutions begin
As we have written before, the Bribery Act 2010 is a law with undoubted teeth. Fines are potentially unlimited, and custodial sentences can be up to ten... read more
1st of May 2016 by Warren Ryland
- New rules on shareholder identification are now in force
New rules on shareholder identification are now in force - and yet many businesses aren’t aware of them. Does your business have corporate or nominee... read more
12th of April 2016 by Warren Ryland
- First SRA-regulated law firm signs up to Bar Council's escrow account
PRESS RELEASE: The Legal Director has become the first law firm regulated by the Solicitors Regulation Authority (SRA) to sign up to the Bar Council’s... read more
31st of March 2016 by Warren Ryland
- Trade marks: the 3 biggest mistakes to avoid
Wander around a supermarket, or browse the advertisements in newspapers and magazines, and you’ll see trade marks everywhere. And it’s likely, too, that... read more
29th of February 2016 by Warren Ryland
- Avoiding flexible working's hidden pitfalls
You don’t have to look too far to see that traditional modes of employment are increasingly giving way to more flexible working arrangements. Returnee... read more
9th of November 2015 by Warren Ryland
- Are you paying your workers the right amount of holiday pay?
A recent ruling by an Employment Appeal Tribunal is set to cause many businesses a headache. Quite an expensive headache, at that. Simply put, it means that... read more
15th of July 2015 by Warren Ryland
- The Bribery Act 2010: are you running a risk of breaking the law?
To see the difficulties that businesses can get into through bribery - or even allegations of bribery - look no further than the reputational damage suffered... read more
11th of June 2015 by Warren Ryland
- It's official: "Lawyers are not cost-effective"
Imagine, for a moment, that when faced with a serious illness, significant numbers of people took no action. And of those who did take action, around... read more
20th of January 2015 by Warren Ryland
- Could a Shareholder Agreement save your business?
Here at The Legal Director, we’ve recently come across a business where the two co-founders have fallen out -- one is now leaving, in order to set up on his... read more
1st of December 2014 by Warren Ryland
- Is crowdfunding the answer to your business's financing challenge?
As the credit crunch and ensuing recession of 2008 began to bite, lending to businesses dried up. To their shock, even long-established, profitable businesses... read more
2nd of September 2014 by Warren Ryland
- Complying with the Data Protection Act: 3 business bear-traps awaiting the unwary
Visit the website of the Information Commissioner’s Office, and there’s an interesting section entitled ‘Enforcement’. In it, the... read more
1st of September 2014 by Warren Ryland
- What might a Legal Audit reveal about your business?
When we start working with a business we assess their existing legal arrangements to determine how these can be improved and aligned with commercial objectives. We... read more
9th of July 2014 by Warren Ryland