Take Control of Your Legal Costs
I know I’m not the only one who has choked on my coffee when I opened a lawyer’s invoice. Simple services should not be so damn expensive. Of course, we need lawyers to get deals done, but too often lawyers bill us at hundreds of dollars per hour and are rewarded for taking their sweet time. The incentives are not aligned!
That’s why I love attorneys who will work for a flat fee. They are more likely to care about being efficient and meeting my actual needs, without adding expensive extras.
The legal industry is finally coming around to flat fee billing because standardization and simplification mean they can make a living without racking up hours. Whatever deal we are trying to do, it’s typically not unique. In fact, most real estate deals have been done a thousand times over.
Lawyers fear flat fees because if they underbid, they get stuck working for free. But many of the best real estate lawyers I know can price a job pretty well by recycling older contracts. They ask questions and get clear about my priorities, bargaining leverage, and the scope of the deal. For example, when negotiating small details with the seller, I often won’t waste time haggling over the really minor details. I’ll just end up spending money while I spin my wheels. By getting clear about what really matters, I can spend less time and money than I would trying to have it all.
Flat fees are a growing trend in the legal industry because they make sense. They are a great way to build strong, trusting relationships between attorneys and clients. The more deals we do together, the better our lawyers will get at pricing for our needs. Cost certainty makes happy (and repeat) customers, and I don’t mind if a flat fee sometimes means I pay more than I might have on hourly billing because I knew what I was facing ahead of time. And the outcome of one deal informs the price I’ll pay on the next deal.
Things are starting to shift. Many small practices now offer basic legal services including deal consultations, document review, and drafting of leases or purchase and sale agreements for as little as a few hundred dollars. For example, Avvo.com has a directory of small firms in major markets across the country that advertise fixed-fee services for a wide range of legal needs. At this point, unless I am convinced that a job is unusually uncertain, I will only pay flat fees. And for many deals, working with smaller firms is fine with me.
There are a hell of a lot of attorneys out there who want my business. It’s a buyer’s market, and I’m buying flat fees.
Call me at 847-317-0077, email me at [email protected], or tweet me at @benreinberg or @alliancecgc if you can submit us a property to acquire and/or would like to invest with us. For further information on investing with Alliance, please click here.
My Best,
Ben
