How Not To Fall Victim To Your Own Lawyers

When you retain a law firm or a lawyer, you often cannot control the budget for legal services. By the end of a project you may find out that the legal fees have doubled if not tripled. This is the fault of both the client and the law firm. How this can be avoided?

You start interacting with a law firm by sending a request for an estimate of legal fees. Lawyers sell their time, and if you want to receive a more or less precise figure, you would have to define the scope of services that needs to be estimated.

If the scope of services lacks clarity, you will receive either a fee proposal with a wide range of figures (which does not work for you because effectively does not give you any real price) or with a big number of 'assumptions', which can eventually bring to nought your attempts to control legal budget for the project.

The assumptions work as follows. A law firm estimates its fees for the scope known at the moment of the estimate, whereas the rest of the services are not included in the estimated scope and, therefore, into the proposed price. Assumptions normally describe the anticipated circumstances in which the adviser would be rendering the services.

The most common assumptions include a time period for rendering the services, timeliness and completeness of providing documents and information, appointment by the client of a contact person, and some others. If actual conditions of the project do not meet the assumptions, the adviser would receive a ground to claim additional fees.

Sometimes assumptions are worded in a way that a priori excludes a possibility for a project to meet them. For example, an assumption may say that no undue or unexpected administrative or other issues would arise such as to substantially increase the amount of time spent by the adviser for rendering the services. But what does an “administrative issue” mean? If, due to the client's fault, collection of documents for legal due diligence has taken 10 instead of 5 (as budgeted) hours, can this be considered to be such an “administrative issue”, and can this be a ground for claiming additional fees?

No project goes absolutely smoothly. For over 20 years of our legal practice, we have not seen a project that would go as initially planned. A majority of law firms budget their services by estimating time they anticipate to spend for the service under normal circumstances. At the same time, at the preparatory stage (especially if a project is complex), neither the...