Make money from your learned friends

Lawyers can be pretty expensive. So how do you make sure you’re getting value for money from the firm you’ve chosen?

First, you need to know exactly how much your organisation is spending. How many departments are allowed to instruct solicitors? How many have actually done so?

The next question is, who are you spending it with? All but the smallest organisations tend to use a variety of firms for different kinds of work. There’s nothing wrong with that, as long as you are clear why you are using them and that you are using the right firm for the right job.

Keep it in the family …
Once you’ve established the basics, you can review your legal services. You might decide that you can save more money by bringing services in-house. A number of registered social landlords have done so, with some large-scale voluntary transfer associations acquiring in-house lawyers as part of the Transfer of Undertakings (Protection of Employment) rules.

Although it looks cheaper to pay an annual salary to an in-house lawyer than to fork out a year’s worth of hourly rates, you should think through what you want your in-house lawyer to do. The solicitor who manages your right-to-buy sales may not be much good at antisocial behaviour orders or giving sensitive governance advice when the chair and the chief executive fall out.

If you only hire one in-house lawyer – and especially if they are quite junior – think about how they will be managed and how their professional development can work. Otherwise, you will not get the best from them.

… or leave it to the expertsMany RSLs feel they are better off paying a specialist law firm, and arrange fixed fees for routine matters such as shared ownership or right-to-buy sales. You can also fix fees for more complex deals but you and your lawyer need a clear and shared understanding of the work involved. Is the time frame fairly clear? Are you asking the lawyer to be involved in negotiating the contract or will they be documenting a deal that has been done? Do you want your lawyer at internal project team meetings? Is it clear how many parties and other firms will be involved?

With a reasonable amount of knowledge, you should be able to negotiate a fixed fee or at least a fixed fee for the first phase of work and a review after that.

If you give a lot of work to one firm, it’s worth asking it to offer your employees a legal seminar or two every year. RSLs work in a complex legal environment. Housing staff, for example, need to understand the difference between assured and secure tenancies, and when an antisocial behaviour order might be useful. Development staff need to know what is meant by title, exchanging contracts, completion and section 9 consent. And staff coming into your organisation from other sectors will need to gain this knowledge: they will not be efficient users of legal resources without it.

Are you happy to foot the bill when junior staff ring a partner in a London firm with minor queries?

You should also think about which of your employees is allowed to contact your lawyers. Are you happy to pay when new or junior staff ring a partner in a London firm with minor queries? Should they have to ask internally first? Whose budget are they spending and is anyone controlling it?

If a complex matter involves many parts of the organisation, it may be more efficient to agree that one person gathers all the information and passes it to the lawyer. It will certainly be cheaper if the organisation chases its own staff rather than asking the lawyer to chase each department for what was promised.

When an employee is dealing with your lawyer, ask the lawyer what he or she needs to be sent. Make sure it is gathered together and sent as a pack. For an employment matter, the lawyer will probably want the contract of employment, your staff handbook and all correspondence. For a development, a site plan, the terms agreed so far, names of other parties and their lawyers and bid details would all be really helpful.

At the end of a deal, keep the set of copy documents your solicitor sends you. You may need it later for audit purposes or, more importantly, if there’s a query about the contract. You may have a nice solicitor who does not charge you when you ring up to ask when you completed a purchase, but if this is data you had once where has it gone?

It’s also important not to duplicate work.

If you have paid a lawyer a lot to tell you, for example, that a new activity is within your charitable functions, you do not want to pay again when a regional office wants an answer to the same question.

All these measures will make your lawyers a more efficient resource – and you might save some money too.