When I started out trying to address people’s concerns and irrational fears about hiring lawyers – fears that ended up hurting them a lot more than helping them – I identified two major factors that contributed to those fears and reluctance. One is just that association a lot of people have of lawyers with being in trouble. Briefly, some people feel like lawyers are only there to protect shady characters, so if the person is honest then they don’t need to hire a lawyer. That’s obviously false and harmful, which I addressed in my previous articles about “lawyer anxiety.”
But the other factor—and something that’s maybe more of a rational concern—is the issue of cost. You don’t want to hire a lawyer blindly and then end up being charged thousands —or tens of thousands! —of dollars more than you expected. You don’t really know what the lawyers are doing, you don’t know ahead of time how many hours they’re going to work or who else they’ll need to bring on board, and there’s an understandable thought process that goes something like, “What if he has all these costs and charges for services I don’t even think that I’ll need? What if it ends up being more expensive to hire this lawyer than just doing it alone and hoping for the best?”
I get that. That’s not a trivial thing to be worried about – actually it’s smart. And it doesn’t come out of nowhere, because there are lawyers out there who are only interested in making the quick buck and don’t care about the best interests of their clients or about building that long-term relationship. But what isn’t smart is letting that concern about cost stop you from making the good decision, the informed decision, when it comes to hiring a lawyer.
Here’s how I figured this out. I’ve got a lot of clients who aren’t Americans, who are from overseas, and sometimes they’d come to me for advice on legal issues outside of my own expertise. They’d say, “I have this legal issue, do you know somebody that can help me?” And I’d usually refer them to someone. But I realized something – often they have this mentality where they’d want to know how much they were paying for something in advance. Elsewhere in the world things are different, but over here in America, most legal cases are not charged on a contingency basis or in terms of a flat fee. In most cases, lawyers charge hourly.
So as I was dealing with more and more non-American clients who felt uncomfortable hiring a lawyer knowing there would be an hourly rate but having no idea how much they’d end up paying at the end, I wanted to do something for them to help give them an understanding about approximately how much they’d be paying, and try to work out some kind of fee structure to demystify lawyer fees and make them feel more at ease with what was going on.
The thing that made this difficult is that even lawyers don’t know ahead of time exactly how much certain things are going to cost! I can do a lot of things, but I can’t predict the future.
I can tell a client my hourly rate and I can estimate the number of hours I believe a project will take, but sometimes it’s hard to know exactly how long things are going take; there’s a lot of unpredictability in the legal profession, especially when it comes to litigation. A lawyer can easily lose money if his prediction is off.
That’s why my firm uses what we call the Corporate Assignment Form.
(Stay tuned. Part II is coming soon. We talk more about this in the next article)