If you are involved in a dispute, it is nearly always more cost-effective to resolve a dispute before a court proceeding commences. If this isn’t possible, there are other intervals that impact the costs you will incur. For example, you can significantly reduce costs by taking a matter to mediation before other formal steps of the litigation process, particularly discovery.

Discovery, also known as ‘disclosure’, is the exchange of all documents in a party’s possession, custody or power which are relevant to the issues in dispute in a particular court proceeding.  Each party is entitled to know of and inspect each document that the other party has. The more documents there are, the longer the process will take and the more expensive it will be.

If you think there is scope for your matter to be resolved at a mediation, then consider requesting for your matter to be programmed to early mediation for a faster and more cost-effective resolution. And, for further savings, consider requesting a fixed fee arrangement for the mediation process, as referred to above.

Your lawyer can reduce the cost to you by being pragmatic and proportionate in their legal strategies.  By the term pragmatic, we mean being practical and making concessions where it is in your overall interests to do so. By proportionate we mean only taking a step on your behalf which is in proportion to the matter at stake.

To put this another way, when a lawyer is negotiating on your behalf, they should be prepared to make concessions if failing to do so would cost you more in legal fees than the concession allows you.

Insist that your lawyer takes a common sense and practical approach to negotiating and save incurring legal fees.

There are many different areas of practice within the legal profession. It is not practical for one lawyer to be across the ever-changing developments in all the different specialised areas of law.

In Western Australia, there are rules around lawyers presenting themselves as “experts” or “specialists” to ensure that lawyers do not engage in misleading advertising.

The term ‘specialist’ predominately connotes a lawyer who has undertaken a specialist accreditation program, although this is not mandatory. The Law Society of Western Australia (Law Society) currently only offers a specialist accreditation program in family law (although other institutions around Australia offer others). To be eligible to participate in such an accreditation program, a lawyer must have practised for at least five years and be able to demonstrate substantial involvement (at least 25%) in the area of the accreditation for the three years prior to application. In circumstances where a lawyer has not undertaken a specialist accreditation program but has advertised as being a specialist, the Law Society will take into consideration the same criteria set out above in determining whether the advertisement was false or misleading.

The term ‘expert’ in advertisements may be understood by the public as implying that the lawyer has a particular knowledge, skill, training or experience in an area of law above that of other practitioners, even accredited specialists. In circumstances where a lawyer has held themselves out to be an expert in advertising their services, the Law Society will take into consideration a number of factors including the same criteria set out above, and a similar criteria used by the courts to satisfy themselves that a witness is a qualified expert, such as whether the lawyer “has some particular knowledge, skill, training or experience in that area of law and would properly and reasonably be accepted by his or her peers as being an expert in that area of law”⁴.

While the hourly rate of a lawyer who holds themselves out to be an expert in a particular area may be higher than another lawyer, their knowledge, skill and experience will enable them to provide you with the services and outcome you require in a faster time frame, ensuring that the amount you pay is lower.

This phrase was used by Western Australia’s former Chief Justice to emphasise the point that documenting a transaction properly from the outset will cost your business a fraction of the cost associated in resolving a dispute later on.

Take for example the scenario of starting a new business with a new business partner. Adopting the adage “a pinch of prevention is worth a pound of cure” would mean that you would prepare a partnership or shareholders’ agreement which acts as a ‘rule book’ for the future to govern the parties’ rights when they want to introduce more capital, make decisions, hold meetings or sell their interest in the business. Without this in place, if you later disagree on a business decision which could have easily been documented at the outset, it will almost inevitably be costly to resolve once both parties engage legal representation.

The financial cost in documenting the transaction at the outset will be much less than the financial cost (as well as reputational cost) of being involved in a dispute later.

Asking a lawyer to put their advice into writing is a time-consuming step which is likely to be more expensive. In some rare cases, it may be needed and unavoidable, particularly where your matter is complex and verbal advice is likely to be confusing or forgotten.

However, there is usually no need to be provided with detailed advice in writing that cites relevant sections of legislation or leading cases.  You just want the answer.

A prudent lawyer will most likely keep a written note of the advice they have provided you, and sometimes forward it to you for your records, in a more simplified format.  You can also do this, and send them an email afterwards confirming the substance of their advice.

This will almost always be cheaper than asking your lawyer to provide you with written advice. When a lawyer puts their advice in writing they are mindful that it may be showed to third parties or even other lawyers. They will need to take time to use precise legal language to provide comprehensive and clear advice that is easily understood, as many principles of law can be confusing. They will wish to distil their opinion in the most succinct way possible. This takes time.

This extra time is unlikely translated into any extra value to you, but will be an extra cost. It’s so much easier and cost-effective for your lawyer to communicate freely and openly in person or over the phone.

The most obvious way to reduce how much you pay is by asking your lawyer to provide you with a competitive fixed fee for their services. Lawyers, particularly in litigation, rarely offer this. However, “more and more clients, both large and small, are starting to proactively ask for the cost predictability, certainty and transparency which [alternative fee arrangements, like fixing fees] provide”⁵.

Lawyers normally charge their clients in 6 minute blocks of time known as “units”.  Each hour is comprised of 10 units. The more units your lawyer spends working for you, the more they are entitled to charge.

There is absolutely no harm in asking your lawyer whether they will fix their fees for the scope of work. In fact, this is becoming an increasingly common request. Many lawyers are amenable to alternative fee arrangements. However, they’re probably unlikely to suggest them. So it pays to ask.

Many modern law firms believe the new way of providing exceptional client service, in addition to maintaining a profitable law practice, is to open themselves to accepting alternative fee arrangements, however “by far the most difficult [challenge for law firms] is negotiating prices with clients, cited as challenging by 73% of top-tier firms and 78% of mid-tier firms"⁶.

While it’s common for lawyers to be amenable to a fixed fee in conveyancing matters (like engaging a lawyer to prepare a lease or an agreement) it’s less common in litigious matters. This is due to the inherent uncertainty that can arise in a legal proceeding.  However, some lawyers are still willing to fix fees for certain stages of a legal proceeding such as mediation or discovery.

Please do not confuse fixing fees with providing an estimate.  Many law firms will and, in most cases, are obligated to provide you with a legal cost “estimate” before commencing work for you. Estimates are not quotes and can be subject to increase.

If there are several lawyers within the firm working on your matter at the same time, you will be charged time for each of them. A simple way to reduce your legal bill is to ensure your law firm only utilises a core team.

The number of lawyers is a question of degree. In our view, it is rare for there to be more than two lawyers needed on a straight-forward commercial matter. Often, firms will have a senior lawyer (such as a Partner or Director) overseeing the matter, and a junior lawyer who completes a large portion of the work, supervised by the Partner or Director. A junior lawyer will have a lower hourly rate than the senior lawyer, and this can assist in keeping legal costs to a minimum while ensuring you are still being provided with the skill and oversight of a senior lawyer.

Larger teams of fee-earners can produce duplicate costs, such as each of them charging time to read the same email and consider the same documents.

If your matter is litigious, or involves a large transaction, having additional fee-earners working on your matter may be unavoidable. The scale or urgency of the matter may dictate that a larger legal team is required to progress the matter effectively and efficiently.

When engaging a firm, consider seeking clarification as to who the fee-earners are, and what their hourly rates will be. Insist that should any additional fee-earners be required, you should be informed of their hourly rates and the reason for their input.

If you are engaging a lawyer on a time-billed basis (6 minute billable units), make sure that you understand what that hourly rate is. Sometimes, the higher a lawyer’s hourly rate is, the more experienced they are. Hourly rates can also vary between the location of the lawyer (whether in the city, the suburbs or the country), the size of the firm and the area of law. You’ll want a lawyer who charges a competitive rate but also has the requisite skill and experience to act for you effectively.

A great way to lower your legal bill is by knowing the “Scale of Costs” (Scales) and how the rate and experience of a potential lawyer you wish to engage compares to it.

When you engage a lawyer to assist you in a transaction or to resolve a dispute, there will almost inevitably be a requirement to document the agreement or transaction being concluded. In that circumstance and in our view, the party whose lawyer is engaged to prepare the documentation in the first instance has an advantage.

Knowing your rights before entering into an agreement of any kind with a lawyer can save you time and money. And it always pays to get a second opinion. A good summation of your rights is provided by the Legal Practice Board of Western Australia⁸ available here.