Thursday 24 January 2019

Quoting for Legal Work . . .

Frequently a business professional - in my case, an English Solicitor - will be approached by a business and/or its owner(s) that is considering undertaking a significant transaction (for example, taking external investment or selling the business), and the question is asked - "How much will it cost for you to assist me?"

I'll ignore (for the moment) the sub-text of the question which is (broadly) 'How low will you go?'!

The issue with seeking to respond to an enquiry of such a nature - is that it generally hugely helps me / the relevant business professional to know a little more about the envisaged underlying transaction (which can even be : Who are you?  Please would you guide me to some publicly available information with regard to your venture!) - Before I can meaningfully provide a properly formulated proposal on fees.

A small factual difference in background information can significantly change an advisor's understanding of what is required in relation to a broadly outlined request for assistance;  and can make a huge difference in what a competent legal advisor suggests should be the work involved (and hence the budgeted fee proposal).

Ironically, it is the good legal advisors who see significant issues early - that lose out to 'the low ballers' who don't!

In particular, it is generally useful to know the 'quantum' (or size) of the envisaged transaction – since legal fees should (in one context) be seen as akin to 'buying an insurance policy' = seeking to 'ensure' that a transaction proceeds as envisaged and without ‘risk’ = i.e. the outcome is of a manner you are comfortable with, and (heaven forbid) that you don’t (personally) have to face subsequent legal claims from the other interested parties.

The position I often find myself in - is a little like being asked to quote for 'insuring a house', and not knowing (often - to any degree) whether I am being asked to 'insure' Buckingham Palace or a much more modest dwelling (!)

Legal fees have as their broad 'underpinning' the professional time budgeted to be incurred in performing the service industry role involved.  In that regard, Solicitors are little different to most other service industries, where you are paying for the time of those providing the service.  Thus there is one price for a morning's 'quick domestic clean', and another (higher) price for a full day's 'spring clean'.

That said, it is a truism that you can undertake much the same amount of time (and effort), and hence have similar professional fees - in (say) undertaking the 'domestic property legal conveyancing' of each of the properties mentioned above (Buckingham Palace -v- more modest dwelling) - but clients should surely see that you wouldn't expect to pay the same fees for buying Buckingham Palace, as you would for buying the much more modest dwelling!

If you want to think of the principle in an alternative context - of a 'service provider' seeking to provide an economical, efficient, high-quality service (= let's use the example of a 'property decorator'), you will appreciate that a quote for 'decorating a house' does depend upon the nature of the house.  Someone quoting to paint Buckingham Palace would take into account the significantly larger nature of the job, and the need to use better quality materials - as opposed to potentially 'touching up' with 'thinned paint to allow a speedier job' on the much more modest dwelling.

Another analogy, which my more vehicle-centric clients habitually understand is that when you ask for a quote for a car service - the price will differ depending upon whether the vehicle is a new, valuable, prestige make (undergoing a warranty cover service), or an elderly vehicle that it's only really economic to ensure it is road legal.   

In reality, when preparing for a significant business transaction - I’d suggest it sensible for clients to reserve an appropriate proportion of the envisaged transaction proceeds to ensure that the relevant interested parties obtain appropriately sensible, pragmatic and practical legal advice protecting their position(s) – but obviously, ‘we all need to cut our cloth to suit the relevant resources’ (= both ‘customer’ and ‘tailor’ (/Solicitor))!

I would always suggest in such circumstances - arranging to have an initial 'no-obligation' exploratory consultation (remotely / by telephony) with an experienced and expert Solicitor - aiming to concisely discuss (in sufficient detail) the underlying situation and circumstances which should be  sought to be addressed - and - to outline the approaches/options available for you - hopefully formulating an appropriate course of action for you to take.

If you wished to proceed upon that basis - it would be extremely helpful for me - if you were able to provide me (before we might 'talk' - and - in accordance with my professional / regulator enforced obligations of strict confidentiality) with such further background information as might be appropriate for me to know (e.g. the identity of the (other) interested parties) and/or sight of any relevant copy documentation (e.g. any relevant 'papers') so as to assist my initial review.

I should be able to limit my firm's fees - to very reasonable budgeted sum(s) (as would objectively be considered appropriate - on grounds of 'what the legal advice and assistance is worth' - i.e. also known (by lawyers) by the Latin phrase a 'Quantum Meruit' basis - taking account of the underlying factual circumstances) - while working quickly and efficiently so as to ensure maximum cost-effectiveness.

Clients habitually find this approach highly valuable - and - the best way of preparing to address the situation you will seemingly be seeking to deal with.

Don't buy solely on price - It's not what successful businesses do (but that requires a further blog!)
There is a reason why the phrase 'Cheap' is generally followed by the phrase 'and Nasty' in the English vernacular!

If the above applies to you - I hope that you will make direct contact with me in the near future - so that we can advance matters.

Should you wish to do so – Please feel free to arrange to schedule any proposed conversation with me at a date and / or time (to suit you) - checking / using my public diary availability > scheduling tool – available via = https://calendly.com/danielrobertjohnson

I look forward to (hopefully) ‘speaking’ in the near future.   

With best regards

Mr. Dan Johnson  - Principal and Business Law Solicitor

EquitableLaw.com  –  Solicitors For Business

+44 (0) 7788 537 187 = U.K. Cellular / e-Telephone

+44 (0) 20 8780 3319 = London Landline > e-Voicemail