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Business owners of companies of all sizes know how expensive it is to deal with lawyers. I am referring to your own lawyers, not the other side's lawyers.
"I was being nickelled and dimed to death" says Yale Holder, founder of a high tech company. Mr. Holder had enough when he received a $10,000 bill in August. He was being billed for every little call to the lawyers, according to an article by Jim Middlemiss, from the National Post. Mr. Holder realized his company could not survive this way.
Mr. Holder's experience mirrors my own. As the founder of a startup in the mid 2000s I also had to deal with my own lawyers, which had been greatly recommended by a business partner. They quietly did their work, only to send us a bill many months later. A bill that so large that could not be paid. Every little phone call and email was detailed in the bill. It was absolutely shocking.
From what I hear it is the same everywhere. How these people get away with this is amazing.
Some clever people saw this as an opportunity and started offering 'virtual' lawyer services. Run out of very small offices (little overhead), the lawyers work out of their homes or at the clients premises, when needed. The company was founded by lawyers who had worked in start-ups and saw what was happenning, how much of that money was "wasted on stuff we shouldn't be paying for,"
"You either hire your own in-house counsel, which for most companies is totally not on the road map. Or you go with the traditional outside law firm model, which does not really get you the proactive internal advice you need and is prohibitively expensive. We felt we could do something to fill that gap." The virtual firm's lawyers are based in Toronto, Ottawa and Waterloo.
Mr. Holder said the firm operates like his own in-house counsel. "I can call them and don't have to worry. "We're a startup. I don't have resources to hire a lawyer. We call them our legal partners." Mr. Milstone said about 75% to 80% of the firm's business comes from growth companies like Mr. Holder's.
The National Post says that small and medium enterprises contribute more than half of Canada's gross domestic product, and they employ about 64% of the country's private-sector workforce, a situation that is probably similar to many other developed countries. "A lot of these companies – especially the ones that haven't necessarily worked with in-house counsel – have a bit of an antiquated view of legal services and shunned it off." They see it as a "necessary evil to do." "We want to take the pain out of a company being able to access legal services."
By moving his legal business to the virtual law firm (Contagion), Mr. Holder says he cut legal costs by an astounding 60%.
I wish I could have.
1 comments:
This makes absolute sense. I used to work at a big law firm where we would charge $40k-$50k for small financings. It was crazy, especially since most of the work was being done by first or second year attorneys with no experience. That is one of the reasons I joined the virtual law firm of Rimon Law Group (www.rimonlaw.com) - we all learned about the inefficiencies of big firms and wanted to create something different. I think this blog entry reflects our sentiments exactly.
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