Wednesday, November 24, 2010

The Economics of Hiring a Lawyer

Legal services clients should look at hiring a lawyer as an investment. As with any investment, you need to address three questions:

1.      How much does it cost?
2.      How much is the return on the investment? (ie – what can I expect if I succeed?)
3.      How much the risk involved? (ie- what is the likelihood of success)?

This economic analysis should be in the forefront of a client’s mind when choosing to hire a lawyer.   It is one thing to invest $10,000 with a lawyer when you have a 75% chance to obtain $50,000.  It is quite another to spend the same $10,000 if you have a 25% chance to obtain $15,000.  
I think every client should expect their lawyer to provide answers to these questions.  Sometimes the answers are unknown at the outset of the representation. In those cases, a client should expect the lawyer to tell them how much it will cost and how long it will take to determine the answers.

The same analysis applies regardless of whether you are bringing an action or defending one. If the question is one of defense, the analysis concerns what you have to lose instead of what you have to gain. There are exceptions to the economic analysis - - one of the most common are those instances where it is necessary to “stand on principle.”   For instance, a client may need to stand up to a bully or avoid setting precedence. 

2 comments:

  1. I think when you are looking to hire a lawyer one thing you should always keep in mind is that fees should be reasonable and lawyer you are hiring need to plan your defense properly.
    Wollongong Solicitor

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