By Robert Meisner
Frequently, we are asked about what questions a Condo Board should ask to find out the truth about the real cost of legal services, as some attorneys may try to brand some competitors as “expensive” in order to discourage condominium associations from hiring that firm. I thought it would be a good idea, therefore, to discuss what questions a community association should ask to find out the truth about the real cost of legal services so that the association is in a position to judge who is best able to represent them and what the real cost may be. There are a number of criteria which affect how legal services are charged and, no doubt, marketing plays a great part in the process. Simply put, some lawyers who have not had the experience or recognition in the field tend to “offer their services at lesser hourly rates in order to better market their services and attract clients.” This has been done by a number of firms in the Detroit area over the years and still is an attractive marketing tool for some attorneys. However, when you break down the real costs of representation by some of the so-called “lower cost” attorneys, you may well find that their services are really not less expensive than the more experienced and well-recognized attorneys. The Board of a community association should ask the following:
1. Does your attorney specialize in community association law?
Your attorney should have extensive experience in community association law, not representing a condominium association once or twice a year or comprise less than fifty percent of his or her practice. This is particularly the case in out-state communities where there are not as many condominiums as in the more metropolitan areas of Michigan, which allow certain attorneys to concentrate their practice in condominium and community association law. An attorney who specializes in community association law does not have to continually “reinvent the wheel” and does not have to spend time analyzing common applicable statutes and case law on the client’s dime.
2. Does your attorney provide a written fee agreement setting forth how he or she charges?
A written fee agreement is a must in the opinion of the Michigan State Bar as well as most lawyers’ professional liability insurance companies, since it sets forth the terms and conditions of their representation, the scope of the representation and how, among other things, legal fees will be charged. Any attorney who does not offer you a written fee agreement is not only placing themself in jeopardy, but also is not being totally candid with you in terms of how they will charge, the scope of their representation and responsibilities, among other things.
3. Does your attorney bill in minimum increments of tenths of an hour or a quarter hour, or a minimum fee for certain work and/or a flat fee?
The specific billing policies that your attorney utilizes can greatly affect the real cost of your services regardless of the hourly rate. For example, if a $300.00 an hour lawyer bills in tenths of an hour and engages in a five-minute phone call, the charge for that phone call will be $30.00. However, if a $200.00 an hour lawyer bills in increments of a quarter hour, that five-minute phone call will cost you $50.00. Moreover, some lawyers charge a minimum fee regardless of the length of the phone call, so as you can see, how a lawyer bills can greatly affect how much you end up paying the lawyer. Also, be sure to inquire as to what services may be available for a flat fee, which experienced attorneys may be able to provide for certain legal services where the time required is easy to estimate.
4. Does your law firm’s bill reflect how much time has been spent by which lawyer, paralegal or clerical person working on the matter and at what rate?
A bill that you receive from an attorney should be comprehensive, and it should indicate the day on which the work was performed, a general description of the work performed, who performed the work, the rate at which the work was performed, and the cost for that work. Anything less can lead to a lack of knowledge on the part of the client as to who actually did the work, how long was spent and at what rate. This is particularly troublesome if this is the kind of bill that you get and you have no fee agreement with the attorney.
5. Does your law firm bill commensurate with experience or bill the same rate for all attorneys in the firm regardless of experience?
Some law firms market their services at a lower hourly rate, but they bill everyone at the same hourly rate regardless of their knowledge or expertise. Some law firms claim to have paralegals or legal assistants assisting them, but they are merely clerks who are marketed as collection specialists, administrative assistants or the like. If you are working with a so-called paralegal, ask whether that paralegal is certified.
6. Is your attorney recognized as an expert in the legal community so that his or her fees are likely to be upheld as reasonable by the courts?
Hiring an attorney who has the reputation of being an expert may get your matter resolved sooner and less expensively than the next attorney who may be just as smart, but doesn’t have the recognition in the community, including among the courts, as an expert in his or her field. The intangibles of hiring an attorney who is at the top of his or her game might not be easily measured in dollars and cents but rather in expedient and successful results. Most Boards don’t recognize this intangible, but it could be the most important aspect in judging how expensive a lawyer really is.
We certainly believe in the truisms “They who charge least know best what they are worth,” and “You get what you pay for.” If you take the foregoing suggestions into consideration in evaluating a proposal for legal services, you will be more enlightened and more likely to obtain the best legal services for the best price.