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These are great times to be a Franchisor. Perhaps it might be better said that these are “the best of times and the worst of times.” Opportunities are truly unlimited and some franchisors are reaching levels of unparalleled success. Unfortunately, some franchise companies are just barely surviving. Whether successful or not, every franchisor is facing financial challenges ahead.
In today’s market place it is important to cut expenses whenever possible. Perhaps the first step in creating savings is finding Affordable legal services. In this article we will explore how you can possibly save money even on your existing legal counsel. Secondly we will look at other avenues to cut cost and make your legal services more Affordable.
How To Save Cost Using Existing Legal Counsel
Early in my legal career, I was contacted by a Florida franchising company that had been sued by 12 different franchisees. After invoking the arbitration provisions of each contract and dividing the “beast” into separate arbitration, I received neatly organized packages for each arbitration from the president of the company. In each package was a summary of claims made by the franchisee in question, along with documents supporting the company’s position. Additionally, the client had one packet containing general information about the company and everything the company had done (seminars, newsletters, etc.) to fulfill its contractual obligations for all franchisees.
In my naiveté, I did not realize that my first client had provided a utopian experience with a company extremely well organized and willing to devote the time to make my job much easier. My wake-up call came not long afterwards when another franchise company had an arbitration filed against it by a master franchisee which, besides the garden variety of claims, sued the company for failing to fulfill its contract by devoting the resources to make the overall franchise a success. To my chagrin, the franchisor provided no help initially and only after constant prodding to get information was I able to find out the nature of the franchisee’s claim and my client’s defenses and attack weapons. It took me months of time going from one department to the next, finding a piece of the puzzle here and there before I was able to gather the same information that was made available to me by my first franchise client. Can you guess which client paid thousands of dollars in unnecessary fees?
As a franchise company looking to cut cost you must take the first step by being proactive. Whatever the project, assign an experienced person in your organization to work with the attorney from the beginning; don’t make the attorney dig it out on his or her own. If you want to save money with existing counsel you must be proactive.
Franchisors Can Cut Their Legal Fees
Abandon the hourly fee! I can’t believe any attorney (me) said abandon the hourly fee, perhaps I need to modify that position and say – most of the time you can abandon the hourly fee. The hourly fee is not client friendly. If an attorney gets bogged down the attorney makes more money than being successful early in the process. Certainly in litigation there is no value to the law firm in being successful and winning a case early on. If your current counsel uses the hourly fee, what incentive is there to streamline the process of obtaining information to complete his or her work for you?
Value Based Billing
Some proactive franchisors are working with legal counsel by basing fees charged upon the value of the service provided by legal counsel. If an attorney wins a case early on an attorney is rewarded for the job performed. Unlike hourly billing where success early on puts the attorney out of work. Value-based billing has the advantage of focusing on the relationship an attorney has with his or her client and not the time spent processing tasks. Value based billing may even use a reduced hourly fee but contain a large bonus if certain results are accomplished within a specified time frame. The possibilities for using a Value Based system are unlimited.
The flat fee is another important measure for making attorney fees more Affordable. The fixed rate provides a franchisor with the ability of budgeting cost of certain known legal projects, like annual registration renewals. It doesn’t matter whether it takes the law firm 100 or 200 hours on a matter, the fee is capped. Franchisors are thus able to address the problems in business they face, rather than un-predictable legal bills for work that may or may not be directed toward ending a problem.
As a franchisor you can make attorney fees more Affordable by finding attorneys that want to establish a long term relationship with your company. I have mentioned only a few of the ways that attorneys can work more efficiently with their clients. There are many more, but the key ingredient is to find a law firm that is a team player; it should be a win – win relationship.
Duell Law Firm represents both franchisors and franchisees locally and internationally. For more information about Duell Law Firm or saving on your legal fees go to http://www.DuellLawFirm.com.