In the increasingly global economy, it is not uncommon for business disputes to involve international witnesses.  Depositions (the obtaining of witness testimony) in foreign countries requires meticulous planning and strict compliance with immigration and treaty requirements, not to mention a knowledge of local practices.  This can raise your legal fees astronomically.  The following are some basic issues and ways to save money on depositions in foreign countries.

The fundamentals

1. Attorneys faced with international depositions must research thoroughly the international law that will govern the scheduling and taking of the deposition. The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the Hague Convention) provides specific and detailed deposition procedures for signatory countries.  Thus, unless your attorney is well versed on these specific rules, it will cost you a great deal of money to even get the ball rolling.  Before you start this process, ask your attorney whether the international  deposition abroad is absolutely necessary for your case.
2. If you do not have a willing witness, it is close to impossible to conduct a foreign deposition.  In other words, it is like throwing money in a hole. Countries are distrustful of other countries legal practices and are loath to require their residents to testify under oath and expose them to potential liability.  U.S. courts have little power in this situation.  Make sure the witness is willing and recognize the additional legal fees if they are not.
3. Immigration rules often require that attorneys obtain a temporary work/business visa, and in some cases even a special deposition visa.  This can be so even for many countries that typically do not require U.S. travelers to obtain a visa for normal visits.  These applications may require court orders and specific information about the proceedings, and can take months and thousands of dollars in legal fees.  Do your homework beforehand.

If litigation you are involved in may require depositions of foreign witnesses, be sure to raise the issue early with your attorney and have him or her seek a stipulation from opposing counsel that specific overseas witnesses will appear voluntarily.  Arrange for the witness to come to the United States for deposition.  Although there will be high costs associated with travel and accommodation, these will be off set by time and savings should the deposition have been conducted abroad.

Many new business owners and entrepreneurs have trouble determining when to file suit.  It is easy to be angered by a vendor or salesperson who did you wrong, but pursuing claims against these people may not always be the best course.   You should always critically examine whether litigation is a good business decision for your company, particularly when it is young and does not have as many resources as a company that has been around longer.

First and foremost, litigation can be very expensive. The costs of litigation can be surprising even to seasoned businesspersons and can be crippling to new companies.  Don’t underestimate how much an attorney can cost.

Second, a lawsuit can be very time-consuming. Court delays can stretch ordinary business disputes into multi-year affairs. Moreover, lawsuits can be a time-drain internally, as monitoring the case and its costs can take up valuable time, not to mention the time spent preparing with your lawyers, and attending depositions and trial. Finally, countersuits filed can further complicate what originally was envisioned as a simple matter.

A more subtle effect of filing suit is loss of privacy. Proprietary information may be disclosed in public filings. Opposing counsel can subpoena other people to obtain information or documents relating to you and your business. Most legal proceedings are public records, and as a result, your business could become an open book to the media and even to your competitors. Publicity on a lawsuit can also reflect negatively on your business and bring unwanted attention from government regulators.

Despite these negatives, litigation can provide results, particularly in the business world. If your business has suffered as a result of someones actions, lawsuits can provide the only route to make your business whole. A lawsuit can also be necessary when you want an injunction against someone who is irreparably harming your business, like a former employee or competitor who is misusing trade secrets or other proprietary information. Finally, there may be strategic considerations to filing suit.  All of the above should be aggressively discussed with your attorney prior to filing suit.  Legal action should always be well thought out and rigorously analyzed prior to adopting a course of action. If you do file suit, be prepared.

Below is a pretty handy guide to understanding the different types of lawyer billing arrangements you can have as an alternative to the billable hour, courtesy of Cypress LLP, a Southern California law firm (with no affiliation to this blog).  It explains five different types of lawyer billing arrangements you can use, good situations to use it, pros, cons, and how it can be combined with other types of fee arrangements to achieve optimal results and lower your attorneys fees to their max.

As this chart demonstrates, lawyer billing does not always have to be by the hour.  Your flexibility as a client and openness to these methods can save you a great deal on your legal fees.  At a minimum, they can provide the basis for a candid discussion of lawyer billing with your attorney.

In 1991, law professor William Ross surveyed 280 lawyers in private practice and 80 who worked in-house for companies.  He found that seven out of eight practicing lawyers said that it was ethical to bill a client for “recycled” work originally done for another client.  Half said they had billed two different clients for work performed during the same time period, such as writing a memo for one client while traveling for another.  The same study found that  55% of attorneys said that lawyers occasionally or frequently overbilled; 64% said they were personally aware of lawyer overbilling. The in-house lawyers surveyed were even more clear: over 80% felt that the billable hour influenced how much time the outside lawyers they hired spent on a case, and 74% felt that the billable hour significantly decreased lawyers’ incentives to work efficiently.

William G. Ross, a Samford University law professor who has conducted studies of lawyer overbilling, has explained that lawyer overbilling is “much more common than most lawyers are willing to admit.”  He also says “a substantial proportion of attorneys engage in billing practices that most lay persons probably would regard as unethical.”

So, the problem of lawyer overbilling is obviously a large one.  The question becomes, as a client, how to determine whether your lawyer is overbilling you.  Sadly, there is no fool-proof way to know whether your attorney is engaging in lawyer overbilling.  The best thing you can do to protect yourself is to (1) negotiate a good retention letter; (2) get good billing guidelines in place, and (3) review your legal bill every month.

You can check out a sample retention letter on our blog.  For sample billing guidelines and for specific tips on how to spot overbilling on your legal bill, check out our guide to lower attorneys fees, which is available on our parent site.

When people who are watching their attorney costs shop around for a lawyer, they tend to limit their attorney cost analysis to the attorneys hourly rate, however this is only a small part of what you attorney is costing you.   They can charge you several hidden fees that will dramatically increase the end-amount you are paying.  To get the most out of your lawyer for the least amount of money, you must  limit the amount that your attorney charges for extras, such as copies, mileage, paralegal services, and travel time, to name a few.  These expenses can really cut into attorney costs and nickel and dime you to death.  Check out our guide for a comprehensive list of these charges and how to get out of paying for these attorney costs.

Below is a free sample retention letter you can use in negotiating with your attorney. The XXXs represent areas that are particularly negotiable. There is a version of this sample retention letter available on our parent site, www.lowermyattorneysfees.com which explains exactly what and how to negotiate the areas marked by XXX. Enjoy.

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Dear Cient:

We are pleased that you have decided to retain the Firm as your counsel. The Firm is committed to providing efficient and responsive service to our clients. This letter will confirm our understanding and agreement regarding the terms and conditions of our engagement.

1. Services To Be Provided By The Firm. The Firm will provide those legal services reasonably required for our representation of you for the above purposes. The performance of the Firm’s services will necessarily include activities outside of your immediate presence, including, for example, legal research, factual investigation, preparation of pleadings and other documents, discovery and appearances before courts, administrative bodies or other tribunals.

2. Responsibilities of Attorney and Client. It will be the Firm’s responsibility to perform the legal services called for under this agreement, to take reasonable steps to keep you informed of progress and development and to respond promptly to your inquiries and communications.

It will be your responsibility to cooperate fully with the Firm in its work by, among other things, providing us with relevant information and documents and by making yourself reasonably available for consultation, interviews and discovery. Furthermore, it will be your responsibility to keep us fully informed of developments and to abide by this agreement. Unless you request and we agree in writing, or unless expressly contemplated by the rendering of the foregoing legal services [e.g., in an engagement to conduct discovery or due diligence], you will be exclusively responsible for (a) providing us with any factual information that may be necessary for us to perform the foregoing legal services or that we may otherwise request and (b) confirming the completeness and accuracy of all such information.

Your responsibilities under this agreement will also include the following:

In addition to the foregoing responsibilities, you will also be responsible for advising us whether any document we have prepared or received and sent to you for your approval or review reflects and is consistent with the principal terms of your proposed agreement, general litigation strategy or other expectations, as the case may be.

3. Disclaimer of Guarantee. From time to time, through the course of the Firm’s representation of you, we may express beliefs concerning the effectiveness of various strategies and courses of action or concerning the merits of any action.

4. Retainer Policy. As a condition to the Firm’s representation of you, you agree to pay us the sum of ____________ as an advance payment for fees and disbursements. [XXX.] We will place these funds in our trust account to be applied as set forth below in this letter. You hereby authorize us to transfer such funds to our regular account to the extent of fees earned or costs incurred by the Firm on your behalf. If your retainer balance is reduced below ____________, you agree to make an additional payment to restore such advance to its initial amount. [XXX.] If, upon completion of our services or termination of our engagement, there are funds remaining from your advance payment(s), we will forthwith repay to you such amount upon your request. If it appears that the extent of activity exceeds the expectations upon which the retainer level was based, we will need to adjust the retainer and will, of course, discuss this with you. The retainer amount should not be viewed as a quote or a limitation on fees since the amount of legal work is subject to many factors outside of our control.

5. Fees and Billing. We will, on a regular basis, supply you with a statement for professional services rendered and costs advanced, which statement will also indicate any remaining balance of the advance fee payment. Occasionally, we may defer billing for a given month (or months) if the accrued fees and costs do not warrant current billing or if other circumstances would make it more convenient to defer billing.
Our billing statements will provide a description of the tasks performed by each attorney working on your matter, billed in quarter-hour increments [XXX]. If an attorney performs multiple different tasks on your matter in one day, our billing statements will indicate only the total amount of time spent by the attorney for all tasks performed on that date and do not break out the time spent on each individual task. [XXX.]

We have established a guideline hourly rate for each attorney and paralegal assistant. For attorneys, the rates range from $ per hour for our most junior associates up to $ per hour for our most experienced partners. [XXX.] My current rate is $ per hour. [XXX.] [For paralegal assistance, the rates range from $ per hour to $ per hour. [XXX.] Our guideline hourly rates and standard charges change from time to time without advance notice, and those changes will apply as of their effective date to all matters then being handled by the Firm. [XXX.] You agree that if any fees or costs billed to you are not paid in a timely manner, we may withdraw as counsel at any time. In addition, interest in the amount of ___% of the previous month’s outstanding bill will be added to the next month’s billing statement, if the outstanding bill has not been paid within 30 days. [XXX.]

6. Costs. In addition to our fees for legal services performed under this engagement, we will bill you for costs incurred, including telephone and photocopy charges [XXX.], postage, FAX costs, messenger and air freight charges, word processing charges, secretarial and word processing operator overtime, librarian and computer research costs [XXX], parking sticker costs, meals for firm attorneys and other personnel when working overtime or on special projects and first class travel [XXX.] and accommodation expenses [XXX] It has been our experience that it is inordinately expensive to document postage and telephone costs on a file-by-file basis. Accordingly, we charge for such expenses based upon a percentage of the attorney and paralegal time logged on a particular matter for that month. XXX. To the extent that we directly provide any of the foregoing services that we bill as costs, we reserve the right to adjust the amount we charge for such services, at any time or from time to time, as we deem appropriate, in light of our direct costs in providing such services, our estimated overhead allocable to such services and outside competitive rates charged for such services. [XXX]

It is our policy not to advance the costs of services provided by outside vendors in amounts exceeding ____. Examples include but are not necessarily limited to court reporters’ fees, corporate filing fees and franchise taxes, printers’ bills and graphic services. We will forward invoices from such vendors to you for payment directly to the vendors. You agree to pay all such invoices promptly. [XXX]

It may become necessary to retain investigators, accountants or other experts on your behalf to pursue your matter properly. We will request your specific approval in advance of our retaining any such investigator or expert. You will be responsible for paying the fees and costs (including any required retainers) of any such investigator or expert directly and in a timely manner, and you agree to defend, indemnify and hold us harmless with respect to all such costs. Alternatively, we may require that you advance such fees and costs to us for payment by us to the investigator or expert.

7. Applicability of this Agreement to Additional Legal Matters. Should we, at your request, perform legal services on additional legal matters for you, the terms and conditions set forth herein will apply to all of such other matters, unless otherwise agreed in writing. We reserve the right to require a separate advance payment of fees and costs (retainer) on each new matter that you request us to handle.

8. Retention of Files. Upon conclusion of our services described in paragraph 1 of this agreement or termination of our engagement, we will, upon your request, deliver to you the files for this matter, together with any of your property in our possession relating to this matter. If you do not request such files and property, we will retain them for a period of years after the conclusion of such services or termination of engagement. If you do not request such files and property prior to the end of such period, we will have no further obligation to retain them and may, in our sole discretion, destroy or discard them, without further notice to you.

9. Termination of Services. The termination of our services, whether by you or by us, shall not relieve you of the obligation to pay us for services rendered and costs advanced prior to termination. When our services conclude, such charges become immediately due and payable.

10. Arbitration of Disputes. It is agreed that any and all disputes, claims or controversies arising out of or relating to this agreement or to our performance of legal services hereunder, including but not limited to those relating to our fees and the quality or appropriateness of our services, shall be resolved at the request of any party hereto by final and binding arbitration. In rendering the award, the arbitrator shall determine the rights and obligations of the parties according to the substantive and procedural laws of the State of ____________. Neither you nor we, however, will be precluded from obtaining provisional relief in any court of competent jurisdiction. You understand and acknowledge that by agreeing to arbitration, you are giving up the right to a jury trial. Judgment on any arbitration award may be entered by any court of competent jurisdiction.

11. Attorneys’ Fees. In the event that a dispute arises hereunder, the prevailing party in any litigation or arbitration shall be entitled to attorneys’ fees and all costs and expenses of any sort.

12. Severability. If any provision of this agreement is held to be void, voidable or unenforceable, the remaining provisions shall remain in full force and effect.

13. Services In Conjunction With Legal Proceedings. In the event that we are called to produce documents or any attorney or employee of the firm is required to testify as a witness in any proceeding to which you are a party or by virtue of our representation of you under this agreement, all attorney and paralegal time, including any attorney time for an attorney of this firm to act as counsel for any such attorney or employee, and costs incurred will be deemed to be part of the legal services performed and costs incurred under this engagement, and we will bill you for such professional services and costs advanced at our then-current rates in accordance with this agreement.

Our billing practices reflect our commitment to deal fairly with our clients in this as in all other aspects of our relationship. We are pleased to be retained as your legal counsel, and we look forward to providing our services to you on a basis that is mutually satisfactory. Your signature on a copy of this letter signifies your agreement regarding the matters set forth in this letter.


Sincerely,

Attorney

The undersigned understands
and agrees to the terms of the
engagement set forth in this
letter and is duly authorized to
execute this engagement letter.

By: __________________________
Title: __________________________

So let’s assume you have found a well regarded and reasonably priced lawyer you can afford. You have followed the steps in the lower attorneys fees guide and so you feel like you have the right man or woman for the job. As you are about to sign the retention agreement and the lawyer tells you that must pay an attorney retainer fee. So what exactly is this fee and what is a fair amount to pay?

Attorney retainer fees are not uncommon and are basically an advance on the payment of attorneys fees. Attorney retainer fees are expecially common when you have not worked with a particular attorney or law firm before. Since it is very difficult for an attorney to withdraw from representing you once he has been engaged, the attorney retainer fee acts like insurance for the attorney.

Knowing whether the attorney retainer fee being charged is fair is another matter. On average, it should work out to approximately three months of the attorney’s work on your case. So if the lawyer expects your case to incur $10,000/month in attorneys’ fees, then the retainer for your case would be approximately $30,000. If you have a small case, and your bills are expected to be $2,000/month, then the retainer should be approximately $6,000. Of course, these amounts vary, and will depend on what you negotiate with your attorney. For tips on negotiating with your attorney, check out our guide to lower attornys fees.

No matter how simple your case, your legal bills can be a complicated affair. Additional costs for filing, copying, paralegal work and other office services can add substantial amounts to what you thought you were paying for. On top of this unscrupulous attorneys can easily pad their timesheet by adding a few extra hours here and there knowing you won’t notice. The best way to avoid being stuck with high legal bills is to sit down with your lawyer beforehand and to review your bills thoroughly.

1. MEETING WITH YOUR LAWYER ABOUT LEGAL BILLS: When you meet with your lawyer about legal bills and legal billing, make sure you discuss exactly how many hours he or she is budgeting to work on your case each month so you know exactly what to expect with the legal bills. See if you can set up a legal billing system that allows you to pay a monthly bill rather than one lump sum at the end, and set up a retainer agreement and billing guidelines that clearly delineate what you will and will not pay for. If you two come to an agreement of how he can accommodate your budget you are less likely to have problems at the end.

2. REVIEWING LEGAL BILLS: If you are not reviewing your legal bills consistently it is easy for legal billing departments to overcharge you. To save money on legal billing, you must take charge of the legal billing process. Compare your first legal bills with the arrangements you made with your lawyer. See if the billing guidelines were complied with. Look for inconsistencies. For comprehensive details on how to look for overbilling, check out the lowermyattorneysfees.com guide.

Did you know that some attorneys charge more than 300 dollars an hour? If you have an attorney that is charging you that much, you have to reassess your legal fees. You can get an affordable attorney that can provide you with the same level of legal expertise if you follow these simple steps.

Shop around. Many people get charged an extraordinary amount of money for legal services, simply because they have not shopped for a lawyer. Perhaps they needed an attorney very quickly, or they blindly trusted the reference that was given to them. Just like anything else in the economy, there is a market for legal services, and if you do not educate yourself about that market, you can pay much more than you should.

Watch for additional fees hidden in the retainer agreement or (also called an engagement agreement). Legal fees can sometimes contain hidden fees that are not openly discussed. If you do not read your retainer agreement, you might be agreeing to many additional fees that you were not aware about. You can dispute these later, but it is much easier to take care of them before you sign your agreement. If you have an honest, affordable attorney, they will sit down and explain the contract to you. Make sure to ask any questions that you have before you sign the contract.

Get an estimate. If you have a lawyer that is charging you an hourly rate, you have to get an estimate on the length of the trial and the amount of trial prep. Of course, your lawyer is not going to know the exact length of the trial, but they should be able to give you a guess based on your situation. Make sure to ask for a litigation budget.