10 tools and tips to save money on legal fees
Like it or not, everyone has to use a lawyer now and then. Whether you run your own side business or have income properties, or simply need a will, you will probably need legal help sooner or later.
Unfortunately, lawyers are very expensive – often prohibitively expensive.
Trust me. I am one — don’t hold it against me. The problem is many people simply skip using lawyers entirely. That’s about as smart as never going to the doctor because you don’t like paying doctor’s bills.
Like it or not, it’s a complex and litigious world, and we all need a “checkup” from time to time.
Fortunately, there’s good news. The Internet revolution has dramatically changed the legal landscape, just like it has nearly every other industry. Numerous new start-ups and online resources have made some basic legal services more accessible and affordable.
However, it’s not easy to understand all the different options. To help you make sense of it all, I am going to give you a number of tips on how you can save money on legal fees.
Use an Alternative Fee Arrangement
As J.D. would say, you can negotiate anything – even how much you pay your lawyer. When you’re shopping around for a lawyer (you are interviewing at least two or three, right?), be sure to ask if the lawyer you are interviewing will consider a flat fee or alternative billing model.
Not every lawyer will agree, of course. It really depends on the situation. But it’s worth asking.
Use an Online Legal Document Preparation Service
Companies like LegalZoom, RocketLawyer, ReadySetLegal and others will help you to prepare basic legal documents, and even allow you to get basic legal questions answered by an attorney. LegalZoom, co-founded by former O.J. Simpson Dream Team lawyer Robert Shapiro, is the most well known and it has grown so fast, there have even been reports it might file for an initial public offering.
Just as companies like TurboTax have simplified tax preparation for the masses, these legal document preparation sites have vastly simplified (some say over-simplified) legal processes that are normally too confusing and overwhelming for the general public.
Not all the change has been good. These companies often supply boilerplate, cookie-cutter templates that do not account for all the unique needs and situations that can arise in life and business.
Some lawyers would probably like to burn me for witchcraft for even suggesting that online document preparation services, which have taken away a lot of what has been historically lawyers’ bread-and-butter work, are a viable option.
However, I think an imperfect solution is better than no solution. And in many cases, people who are using sites like these are not choosing to not use a lawyer; they simply cannot afford one.
I usually say if you do use an inexpensive online service to save money, commit yourself to going to a lawyer later as resources permit to review everything and update as needed.
Educate Yourself by Doing Your Own Legal Research
There are a lot of places where you can look up state and federal statutes and case law. Better yet, as lawyers have moved into blogging and companies like Avvo.com have set up Q&A forums, there are more and more places online where you can find answers to common legal questions written in plain English.
Here are a few of the better Q&A forums:
For years, I was hoping Google would jump into organizing the world’s legal research like it has other sources of information. Finally, they did. Google opened up Google Scholar, which is an excellent resource I use to look up cases and statutes and even law-review articles.
There are numerous other good legal information sources, such as Nolo.com, Justia.com, and FindLaw.com.
But I’ll let you in on a little secret (just between you and me): when I’m doing legal research, I often start by just Googling it.
Of course, the law is infinitely complex, and so you don’t want to take this too far by handling your own litigation, any more than you would want to practice medicine by yourself if you’re not a doctor. It’s one thing to educate yourself on symptoms of the flu by reading WebMD; it’s another thing to try to perform brain surgery because you think you’re a doctor.
Organize Your Documents in Advance
Before you go in to meet with a lawyer, get yourself organized. Print up copies of any digital documents or emails, and put them in some semblance of an order. If you have an issue that occurred over time (such as a dispute with a client or customer, or an employee), prepare a timeline or brief history of the facts leading up to present day. This preparation will save time and keep your costs in check.
Swap Services With an Attorney
Do you have a service you can trade with a lawyer? There are plenty of things lawyers are not good at but need help with anyways, from SEO to bookkeeping to marketing.
You might try approaching a lawyer and offering to provide them with a service in exchange for legal advice or services.
You can also try using a service like Barter Quest, Swap Right, U-Exchange (a paid service), or even Craigslist.
To make this work, here are a few tips:
- Be detailed: Get specific about what it is you’re looking for in a lawyer, and what it is you have to offer. The more specific you are at the outset, the more likely you won’t waste your time.
- Agree to written terms: Have a written agreement up front as to the terms of your barter, including how you value your service and the lawyer’s, and what money (if any) will change hands.
- Be aware: Be aware of the terms of your trade, and keep your eyes open. There’s definitely the possibility you could run up a bill if the cost of the legal services you receive exceed the value of the services you provide.
- Get tax advice: Just because you aren’t receiving monetary compensation for your end of the barter doesn’t mean there are not tax issues. Get advice from an accountant on the tax implications of bartering in advance.
Smaller firms or solo practitioners are the most likely to be open to such an arrangement. And you may have to ask around before you find a lawyer who can both do what you need them to do and who is open to this kind of arrangement.
Finally, if you don’t have any pressing deadlines, then take your time. Do your research, ask for advice and recommendations from trusted friends and advisers, and be sure you make an informed decision in whatever you do. You will be glad you did.
P.S.: I came up with so many money-saving legal ideas that I couldn’t fit them all in this article, so I put an additional 10+ tools and tips for saving money on legal fees in this free report just for Get Rich Slowly readers.
What tips do you have for saving money on legal fees?
Become A Money Boss And Join 15,000 Others
Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)
There are 22 comments to "10 tools and tips to save money on legal fees".
Interesting hearing a lawyer recommend legalzoom.com. I think it’s a great service, but the people I talk to generally frown upon anything that’s not a real person. Thanks!
Thanks for the comment, FI. Just to clarify, I believe legal document preparation sites like LegalZoom can be better than not using anything at all. Of course, using a lawyer is better over a legal document preparation site, but I find the people who choose to use a site like LegalZoom are not deciding between a lawyer and LegalZoom. They are deciding between LegalZoom and nothing.
I have a group legal plan offered as a benefit from my job. For a small fee $150 yearly I can have things covered like traffic tickets, closing, wills. etc.
I have a group legal plan as well – not through my job but through Legal Shield. I’ve used it in various was and it has come in quite handy when I’ve had a bone to pick with a few commercial corporations for poor service or refusing to accept a return.
A friend talked us into purchasing Legal Shield (from him) and I have not regretted that decision. My DH and I have used it 3 times in the last year since we purchased it and so far so good. The local firm that Legal Shield uses always return our calls/emails and issues get resolved in record time.
I was able to sign up for the Hyatt Legal Plan through my employer. For $9 a month, I have access to lawyers for free or seriously reduced legal fees (drafting a will or POA or HCPOA are covered free of charge).
In the event I need a lawyer for services not covered under the plan, I have access to referrals to the specific type of lawyer I’d need in my situation at reduced fees.
Well worth it, to me.
That’s a great deal, Kate. Of course, those types of plans usually exclude the more time-intensive legal work, such as litigation. But they can be helpful for less time-consuming needs.
Those are some good resources, but you forgot to mention Legal Shield as a viable and affordable option (formerly Pre-Paid Legal Services).
For as low as $17.00 a month you can access to an A rated law firm in your state.
All the basics are covered, even so many hours of court time in case you get sued, etc..
Anyway, don’t got a lot of time to explain, so this url will explain it a whole lot better.
CoverTheFamily.info
I’m not trying to spread links, just trying to show one more resource available to your readers.
Greg
Thanks, Greg. Of course, one drawback to a prepaid legal plan is you are limited in which lawyers you can choose to represent you, just as you would be with an HMO for your health care. However, if that isn’t a problem, then a prepaid legal plan can work.
Be careful with the legal ratings companies. Attorneys are just asking clients to place reviews on the sites to boost ratings. These websites are not like yelp or amazon where you have enough volume to weed out the obvious tinkering with the stats. Just because an attorney has good reviews on a website doesn’t mean they are a great lawyer.
I always tell people who call me – ask your friends and family – who did they use and did that attorney do a good job? That’s how you will find a good attorney.
Full Disclosure – I’m a lawyer but I don’t participate in those sites (even though they list you anyway…)
Wonderful and useful legal tips, John. I have bookmarked this article because there will undoubtedly come a time when I need it.
Sometimes I empathize with attorneys–people treat you and therapists in the same light (or is it dark?). Most people don’t want to pay for our services, but boy, when the $^&* hits the fan, you need the sound, solid, expert advice of a professional.
Thanks John and JD. Off to spread the good word…
These are all very good tips. Thank you! Although I have never had to go to a lawyer so far, I recently started a website/business of my own and was wondering how I would go about contacting an attorney in the future without spending a lot of money.
LegalZoom also has a Canadian website with specific information to it’s Canadian customers. Definitely something useful to consider.
I am working as a European public sector jurist, and am a bit surprised by the tips given in this article to save money on legal fees. I think that lawyers, like all other experts, should be recognized as the experts that they are and be treated consequently. Thus, I would focus on the service I am purchasing, rather than trying to get the best bargain or even swop services (!). A lawyer needs an income like everybody else, and why should a good lawyer accept a client that refuses to pay decently from the very beginning?
Personally, I think you should find a good lawyer specialized in the relevant field, instead of hiring a lawyer that is unknown to the matter. The more complex the matter, the more you need an expert to review your case. Keep your presentation to the lawyer simple, but be careful to include all relevant facts. Be clear on what you want from the lawyer and keep in mind that this is your legal expert, not your psychiatrist, doctor or friend. This way you can hopefully pay for a few efficient hours from the experienced lawyer, instead of paying for the self-studying of the inexperienced one… which in the end in my opinion often will be cheaper, more efficient and safer.
Thanks, Marius. My point was not that people should never use lawyers. My point was more that you don’t need a brain surgeon to check your temperature. Of course, it’s preferable to have a lawyer in all situations, but due to the cost of practicing law and high hourly rates, that’s not always feasible for all budgets.
I love LegalZoom. As a lawyer, I make a lot of money litigating the mess do-it-yourselfers get themselves into when they think they can use a $29 form to set up a multi-party LLC or corporation.
To put things in medical terms, LegalZoom sells bandaids. People too often try to use these bandaids to fix their gunshot wounds or prevent heart disease. While it may be better than nothing, the most harm is sometimes found in the false sense of security people derive from their LegalZoom documents. Just make sure you understand what you’re getting and what you are not.
Ha, Ace – maybe I have an ulterior motive! Actually, a lot of lawyers say that but we (lawyers) have a skewed view because we see an unrepresentative sample. Lawyers assume that because most of the exposure they have to LegalZoom (and other doc review sites) involves some kind of dispute or mistake, that therefore the entire product is bad. But that’s not the case. Although legal doc prep sites are certainly not perfect, I think it can work for a segment of the population, as long as they are aware of the risks.
I agree with you, but the problem is that most people are not aware of the risks. Assessment of the risks is what you see a lawyer for.
That said, the advice I typically give people is that it depends how much skin you have in the game. If your investment or net worth is a few thousand dollars, it doesn’t make sense to pay a lawyer $4-5k to put together a comprehensive business organization or estate plan. However, if you have a hundred thousand dollars in the game, don’t risk it on a $29 form.
Very well said. And good point. I just think someone who is going to go for a $29 form is most likely not going to consider paying a lawyer $3-4K for the same service. So telling them to go to a lawyer is like spitting into the wind. Thanks, Ace.
Big savings are possible in personal injuries. If you are going to avoid court, the settlement process does not require much legal expertise. Of course unless you are unlucky and are going to get injured multiple times, you will probably spend quite a bit of time on research that you only use once. The main skill is in negotiation. Some will say you may leave money on the table, since a lawyer will negotiate from a more knowledgable position. In my case, however, I talked with a lawyer after I had negotiated the settlement and he said I got about double the usual amount for similar injury in my county. A little less knowledge isn’t always a bad thing. Then you factor in 25-33% lawyer fee + costs, for savings of more than $70k. It is stressful and time consuming, I don’t want to minimize that, but there is a lot of money to be saved.
This is interesting coming from a lawyer. The comments made above make sense as well. What is the risk involved? If is it a small thing and not too complicated, online documents is much better than nothing.
LegalShield provides documents and experienced attorneys to review them. LegalShield also provides will preparation for the member and spouse and annual updates, if needed.
Consulation about traffic tickets and representation in court is also covered.
Members and spouses are also covered if they face civil suits.
Tax attorneys are available for help with IRS audits, including representation at the audit and or trial
24/7 emergency access covers the whole family as well.
Pre-existing situations, bankruptcies, divorces, and mis-deeds are covered under the consultation benefit and then a 25% discount from the providing attorneys’ standard fees.
For about $1 per day whole families are covered by a proprietary system of law firms, including nearly 7,000 experienced attorneys across North America.
I have had the service for nearly 11 years and can’t imagine life without it.
Just wanted to mention that even if you plan on using a lawyer for your will or other document, online document generators can still be useful. Before you go for your appointment complete the document on the online generator. That way you can cover all the basic things, instead of doing them in your lawyer’s office. That means your lawyer can then focus on applying his knowledge to the issues not covered by the document generator and save you both time.