As a business owner, you’ve no doubt run into situations where you needed legal help.
Due to the way most attorneys handle billing, it’s nearly impossible to figure out:
Just how much does a business attorney cost?
As a result, budgeting for legal help can be a challenge.
Law firms rarely disclose their prices outright, and many operate on the “billable hour” model that offers little clarity to businesses needing to carefully plan their expenses.
Fortunately, more business attorneys are moving to a “flat fee” model for billing, which offers much greater predictability to clients.
Flat-Fee vs. Hourly Billing
The traditional method of charging for legal services is based on the billable hour. Under this model, attorneys track the time they spend working for a client in six-minute increments.
Attorneys and firms with billable hours typically require a retainer to cover the cost of the project. However, the initial retainer may be set at an amount that doesn’t necessarily reflect the true cost of the project.
Flat-fee billing, on the other hand, involves estimating the cost of the project before any legal work takes place. With this method, the client has a clear idea of how much their lawyer will cost before making a commitment.
How Do Attorneys Calculate Flat Fees?
Attorneys calculate flat fees using their past experience with particular legal issues.
In general, attorneys will take into account:
- The type of legal services requested;
- How long they estimate the project to take;
- How difficult the project is; and
- Potential issues that could extend the duration of the project.
Once the attorney estimates the approximate time, they will calculate a flat fee based on their hourly rate.
How long something will take largely depends on the complexity of the legal matter at hand.
For example, experienced Texas business attorneys may find it easy to estimate the cost of their business formation services because the process is relatively straightforward. However, if the legal matter involves a complicated contract issue, it may be more difficult to estimate.
Is a Flat-Fee Billing Better Than Hourly?
Flat fees aren’t necessarily cheaper than hourly rates, but they do offer a number of benefits to clients.
When you buy other professional services, you often have the option of paying “per project” rather than by the hour. By bringing that concept to the legal profession, flat-fee billing gives clients the ability to make well-informed decisions about hiring an attorney.
In other words, flat-fee billing significantly increases a client’s ability to properly weigh the cost of obtaining particular legal help. In some cases, an attorney’s services would be beneficial, but not strictly necessary.
For a small business on a tight budget, flat-fee billing allows them to decide quickly whether to forego these types of legal services. In other situations, an attorney’s services may be all but required. When that’s the case, flat-fee billing allows clients to budget more effectively for that expense.
Flat-fee billing also gives clients more confidence about how much their attorney is charging. Texas attorneys are bound by strict ethical rules when it comes to the fees they charge their clients. Unfortunately, not all attorneys act ethically, and some clients worry that their attorney will “inflate” their billable hours. Because a flat fee is set and agreed upon from the get-go, clients worry less.
All this isn’t to say that hourly billing is worse. Many business attorneys and firms with hourly billing can still estimate the cost of a project, even if they don’t offer flat-fee billing as a payment option.
How Much Does a Business Attorney Cost?
The actual cost of a business lawyer will vary greatly depending on the attorney and the project you hire them for.
Different attorneys charge different amounts depending on their experience and the difficulty of the project. For example, new or less experienced attorneys tend to charge rates on the lower end of the scale.
Ultimately, the cost depends heavily on the specific attorney and the nature of the legal services required.
Only your attorney will be able to tell you how much their legal help will cost. Accordingly, it’s best to speak with the attorney directly about your legal issue.
Most offer free initial consultations where you can learn more about the total cost of their legal services.
Do I Need a Business Lawyer?
Because of how much lawyers can cost, business owners are often hesitant to hire them unless they feel like it is truly necessary. While there are some things a business can do without an attorney’s help, in most cases it’s best to hire an attorney. Even something that seems simple (like obtaining a business license) may involve unexpected obstacles.
In other cases, having an attorney will be necessary, such as during contract negotiations or if there’s an employment dispute within your company. The bottom line is that having an attorney you can go to for business law matters is beneficial in the long run.
Particularly if you hire an attorney early in your business’s lifecycle, they’ll be able to provide better legal assistance because they’ll be more familiar with the needs and goals of your business as it grows.
We Offer No-Nonsense Flat-Fee Pricing
Massingill Attorneys & Counselors at Law understands that transparent pricing practices are valuable to our clients. That’s why we offer flat-fee rates for our legal services.
Whether you’re just starting a business or need assistance with your existing business, our business law attorneys are here to help. Book a consultation today or give us a call at (512) 410-0343 to get started.