The Real Cost of an Australian Business Lawyer
“How much does a lawyer cost” is something that gets asked a lot. And rightly so. As business owners, we all need to plan expenses, and we need to know that our spending fits within our budget.
But how do you get an accurate gauge on what the real cost of an Australian business lawyer really is?
If you were hoping this article would give you a round dollar figure at the end that you can plug into your budget, I’m sorry, but you are going to be disappointed. This is not one of those articles.
This article will explore the things to consider when working out the ‘real’ cost of a lawyer (and the potential cost of not having one).
First of all, let’s look at what you are getting. What help do you need? What advice or guidance are you after? Here are a few common examples.
Business Structure advice
There is no accounting for the number of times I have worked with clients and accountants to get this right. The upshot here is if your business structure doesn’t suit your business, then not only will you spend money to fix it (as in restructure, aka start again), but you may also have significant tax consequences that flow from a structure that doesn’t suit, and you are going to have to pay this. I just can’t quantify the value of getting your business structure right, and the consequences if you don’t. So keep this in mind when weighing up the cost of advice here.
Business documents tailored for YOUR business
Have you heard the saying ‘buy cheap, buy twice’? (if you haven’t, dive over here and take a listen to a recent podcast episode with one of my very talented and very driven business clients who talks about this in the context of investing in your business). When you are thinking about your business’ legal documents, start with your business terms & conditions (also called your client service agreement, or terms of trade), website terms & conditions, and a privacy policy. Once you have the core trio sorted, then start thinking about whether you need employee agreements or independent contractor agreements (if you are growing your team).
If you take short cuts with your legal documents, chances are you won’t know if they do what they’re supposed to do. You won’t know if you are meeting your obligations under the Australian Consumer Law, and you won’t know whether the documents protect your business until you need to rely on them. And by then it’s too late if they fall short.
The cost? It depends. It depends on what you need and who is doing them for you. The cost not to get these done right? It could be huge – sometimes it only takes one rogue client or one poorly delivered client project to bring a new business unstuck. Don’t let that be you.
Professionalism
Your documents, proposals/quotes, systems, website. These are all extensions of your business. Not only do they need to work to protect your business, they need to be professional and they need to meet your clients’ expectations. We have all heard the saying ‘you only get to make a first impression once’. This applies here! The impression a potential client or new team member will have when they receive your documents is important. I can’t put a dollar value on what that is worth to your business, so the question becomes can you afford not to get this right?
Let’s look at having an invested member of your team
Your business lawyer really should be a part of your team. Someone who knows your business inside out, who cares, who gets what the business stands for and what the drivers and values are. This means that before you enter into a new contract or agreement; before you sign up to something; before you dive into handling a tricky situation with clients or team member (or a supplier or contractor), you can pick up the phone to your lawyer and talk it through. Not only do you have a sound mind to bounce with, but you also have someone who can be objective, who can offer a perspective you may not otherwise have had, and someone who has your back every time.
Can we place a dollar value on this? Not really.
Despite best efforts, disputes will happen in business.
Let’s look at Disputes and Litigation next.
If you find yourself in the unfortunate position of being caught up in a dispute with a third party (whether it be a client, former team member, supplier, and so on), actual costs (as in real dollar amounts) are going to be at the forefront of your thinking and your discussions. Not only does a dispute, or a court case (referred to as litigation) cost businesses an arm and a leg, but they cause the key people to take their eye off the ball to deal with the matter, which means they are not working in their business or spending valuable time growing and scaling the business.
The cost of these matters in dollar terms is up in the tens of thousands (and trust me, I know, because I spent the first 12 years of my career representing clients involved in dispute and litigation). But working out the dollar value here needs to also include loss of sales, loss of revenue, and loss of time, on top of legal fees, risk, and potential reputational damage.
This is a complicated one, and honestly, the old saying ‘prevention is better than cure’ applies here in bucketloads. You can’t afford to take shortcuts to try to keep costs down and give the lawyer a miss, because if you do, you are more likely to end up in a situation involving a dispute, or being sued, because something went wrong. So, what are the costs attached to taking steps to avoid this, and do all you can to protect your business sooner rather than later? I think you get my drift here….
Finally, let’s talk budget.
Don’t get me wrong, I know that the round dollar figure is important. And it should be. You should know what you’re getting, and you should know how much you’re paying. So, when it comes time to ask for work to be done by a business lawyer, by all means, ask for a fee estimate or quote in advance, and make a decision that will work for your business. The point of this article is to highlight that there is a whole lot more to work out the cost of a lawyer, and the cost of having a lawyer on your team, than a simple quote of fee estimate.
Perhaps the real question is better phrased along the lines of ‘What is the cost of not having a business lawyer?’
If this article is ringing bells for you (or making you nervous sweat), relax! That is not the intention. Reach out to us for a chat so we can help you plug any holes you have or put steps in place to get you protected to really reduce your chances of needing to call us later when something goes wrong. You can book in for a free 20-minute chat here.
Let’s get you sorted, sooner rather than later.
If you want to dive into some more value for business owners, you can check out our resource ‘Australian Law 101 — Guide for Small Business’ here.