Nobody looks forward to the day they have to hire a lawyer. But for companies, it’s often unavoidable. If you believe you need an attorney for your business, then you’re probably wondering how much it will cost.
We put together this guide to help you figure it out. First, the cost of a lawyer for your business will vary based on the factors we cover below. Then we’ll wrap it up by giving you three strategies for keeping your legal costs down.
Let’s get started
Two Pricing Models: Flat Fee and Hourly
You first need to know that attorneys can use a flat fee or an hourly pricing model.
Hourly pricing models are much more common. With them, you’ll be charged a specific dollar amount for every hour a lawyer spends working on whatever you hired them for.
Most lawyers charge between $100 and $400 per hour based on experience. So you can imagine how these costs can add up fairly quickly, but you may be able to get some help covering them with a business owner’s policy.
Flat-fee is usually the more affordable pricing model, but it’s also rarer. You’ll often find it when hiring an attorney for a single repeatable task, such as drafting business documents or reviewing communications for potential legal issues.
Geographic Differences and Business Lawyer Costs
Your costs for a business attorney could also vary quite a bit based on where you’re located. For example, take a look at some of ContractsCounsel’s data showing the average fees for lawyers by state:
- Florida – $195 – $400
- Louisiana – $100 – $485
- Hawaii – $250 – $400
- Illinois – $80 – $550
- California – $150 – $420
- New York – $100 – $400
Firm Size Pricing Differences
Your attorney costs could also vary based on the size of the law firm that you hire. Large firms that employ many attorneys tend to hire the best of the best and will give you more resources to win your case. But that value tends to come with a higher price tag.
You may be able to save some money by working with a solo business attorney or a small firm. But these options won’t have the resources you would get from employing a more prominent firm.
Calculating Your Company’s Attorney Fees
We’ve told you some of the most significant factors impacting your attorney’s fees. Now let’s calculate how much a lawyer will cost your business. This is a three-step process:
- Figure out whether you can hire a lawyer for a flat fee or if hourly work is necessary
- If hourly work is necessary, ask the attorneys to tell you roughly how many hours it will take them to complete the task
- Multiply the attorney’s hourly rate by the expected hours they’ll need to get the job done
It’s as simple as that. The one issue to note here is that some legal issues, such as court cases, tend to evolve. This means that your costs could end up being much higher than you initially expected.
Strategies For Keeping Down Your Legal Costs
Unfortunately, lawyers cost a lot – especially when the business problems you hire them for are complex. But that doesn’t mean that you’re absolutely helpless.
You can take some steps to keep your legal costs as affordable as possible. Here are three to consider deploying.
Pay for Business Insurance
Perhaps the best way to reduce your risk of incurring hefty lawyer fees is to pay for business insurance.
These plans often include coverage for lawyers fees when you need to hire an attorney to deal with something like employee theft, a data breach, or an accusation of professional negligence.
The type of legal coverage you get from business insurance will depend on the plan and provider you choose. That’s why it’s a good idea to understand your biggest areas of legal risk and then look for insurance plans that offer coverage for related attorneys fees.
Look for the Right Attorney
You can save money by hiring the right lawyer as well. Depending on the nature of the legal issue, you may be absolutely fine going with a smaller firm or solo attorney instead of a larger one.
Additionally, if you need boilerplate documents drawn up for your business, you may even be able to have those done online with an instant attorney service, such as Legal Zoom.
Reduce Your Risk of Litigation
Finally, litigation is when businesses’ attorney fees start getting really out of hand. That’s because litigation is a lengthy process with multiple court appearances – each of which will require much preparation. This all adds to many hours of legal work that may not be necessary.
Only about 1% of civil cases filed in federal court go to trial. So you’ll often have the opportunity to agree on a plea deal with the other party instead of paying for an expensive trial that you have no guarantee of winning.
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