Podcast Episode 17: “Taming Your Legal Bills 2/4 – Fixed Fees.”
A continuation of Barry explaining how your lawyer figures out your legal bill for a real estate transaction. Fixed fees only apply to plain, straightforward deals, so if your transaction becomes more complicated, the cost rises. Listen to this episode to get helpful tips on keeping your fixed fees fixed.
What Can Add to the Cost of a Fixed-Fee Legal Account in Real Estate
Most of your legal accounts for real estate can be done on a fixed fee basis. Your lawyer has figured out a fixed fee on the basis that it’s typical transaction with no wrinkles or crinkles or surprises. If your deal turns out to have wrinkles, crinkles, and surprises, your lawyer may charge you an extra fee for the extra time put in to sort out what no-one know was coming.
It’s in your very best interest to avoid any extra legal fees. Here are some things you can do to keep your legal account to the fixed-fee deal you thought you were getting.
- Know Your Deal: you have to be able to explain your deal and give your lawyer accurate, understandable instructions. If your lawyer can’t understand it and you can’t explain it, up goes your legal bill.
- Keep It Simple: clean and simple is always better than complicated. Complicated means that staff can’t handle as much as they usually do and therefore more lawyer time is required. Extra lawyer time equals extra fees.
- Ask About Fees Upfront: you can ask about fees, after all you are the boss and we, as lawyers, are working for you. Don’t be shy! Ask what’s included in the fixed fee. Better yet, ask what is excluded.
- Use An Early Check-In: most lawyers like to hear from you just before or right as you remove all your subject-to conditions. That way they know that there is a deal on the way. It’s a heads up that most lawyers appreciate. I like to take that one step further, especially when I am working with a new client for the first time. You can call me, introduce yourself, tell me what your plan is and we can have a chat. That gives me a chance to learn your name and a little bit about you. I send confirming e-mails to you as well as my real estate partners and our assistant so that they recognize your name, and then when a deal shows up, we are a step ahead. It goes without saying but I’m saying it anyway, if you have issues, or questions or you just don’t understand, call us ASAP, not just before condition removal.
- Give As Much Lead Time As Possible: this might be the most important money-saving tip of all. When deals arrive in a lawyer’s office with enough time to close the deal in the normal course of business, that goes a long way to keeping your fixed fee fixed. My strong suggestion is that you set your closing date no sooner than 30 days after your last condition removal date. Once you remove conditions, the seller’s realtor sends the seller’s lawyer and the buyer’s lawyer conveyancing instructions, which are copies of all of the contracts and schedules along with information about the other party. The new lender’s administrative department sends mortgage instructions to the buyer’s lawyer. The buyer’s lawyer needs both conveyancing instructions and mortgage instructions in order to open a file and proceed on behalf of a buyer. To get both often takes a week after all conditions are removed. That week leaves your lawyer about three weeks to close the deal in your behalf.Do your very best to make sure that you use this timing. Do not listen to sellers or seller’s realtors or anybody else who says that their lawyer or their lender can do it so much faster. They would never need 30 days. If you don’t give your lawyer enough time, s/he often has to request that staff put in overtime, pull staff off existing files to do your rush file and get more involved himself at his hourly billing rate rather than his staff’s much smaller billing rate. You get the idea; a decent amount of time smooths out a lot of administrative bumps.
- Be Available: it sounds funny to say this but you actually have to be around and available. There may be questions to be asked, information to be obtained, and problems to be solved. Documents will have to be signed usually during regular working hours. Just make sure that your lawyer and staff can easily reach you by telephone or e-mail.
- Get To Know Staff: Yes, it’s true. Staff usually do most of the work on fixed fee transactions. Relationships are important in any business. You get to know our staff, they get to know you, and everything just runs better.
Barry keeps his lawyers fees up front and transparent. Contact him today for all your Alberta real estate needs!