Pay Me Now or Pay Me Later: The Importance of Paying to Get It Right

Many people don’t hire an attorney because they think it will be so expensive they cannot afford the cost. In reality it is often like the old oil filter advertisement where the mechanic takes out the plug to allow sludge to leave an apparently broken engine. He then says, while holding up the new filter, pay me now or pay me later. Unfortunately many people hire an attorney long after they should have and “pay me later” becomes “pay me a lot more to solve a problem than it would have cost to prevent the problem.”

In construction hiring an attorney to prepare a good contract to use on custom construction jobs may save you a lot of money later. Likewise, hiring an attorney to look at lot purchase contracts, declarations and loan documents may save money later in a real estate transaction or spending a little money on estate planning can save tons of money later – although that money will be spent by your dueling heirs.

Hiring an attorney is not just about saving money in the long run but also properly protecting your interests. For example making it clear in a construction or service contract who is responsible for what portions of the work is the most important element you might have controlled. Or, making sure terms and conditions are well defined so you don't have to litigate later when there is a dispute over the original intent.

A lot of people assume that if you have to go to court and you win, that the other side will have to pay your attorney fees. Generally, this is not true. In most matters each party pays their own fees regardless of who wins. In many cases legal fees can be larger than the matter under dispute.

It is also important to know that most attorneys will talk to you about fees before they start work on a case. So instead of just thinking it would cost too much to do something with a lawyer’s help you should at least ask what it would cost to get the help you need when the timing of that help can be most effective.

In most cases you will be responsible for ancillary costs of litigation – court filing fees, publication of notices in legal news, hiring experts, overnight express deliver or taking depositions. Most attorneys do not charge for long distance calls, making copies or faxing stuff out to you – however some do – ask your attorney practices on that when hiring the attorney. This type of cost is normally not the big cost in hiring an attorney.

Many attorneys charge by the hour for most work they do. It is always fair to ask the hourly rate. However, hiring an attorney based upon the lowest hourly rate would be like hiring a builder based on the lowest cost per square foot for construction or buying land based on the lowest cost per acre. Some work can be done on a fixed fee basis where the scope of work can be clearly identified up front – like preparing a contract. Some work is done on a contingent fee where the result is quantified in money being collected. In contingent fee work attorneys look at it from a business perspective by estimating the potential recovery, likelihood of success and collectability of the money compared with risk of losing and not collecting.

Vernon L. Jarboe is an attorney licensed to practice in state and federal courts in Kansas. Mr. Jarboe concentrates his practice in the areas of real estate and business law. He is one of eight well-known real estate educators recently chosen by the Kansas Association of Realtors® to teach video-based online courses that will be available nationally to more than 200,000 real estate professionals. If you have questions about this article, call Vern at 785-357-6311.

The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.