Small firms are being fleeced by lawyers
Legal firms need to re-think their pricing structure warns lawyer
Business owner and former city lawyer Giles Dixon has revealed that small businesses and start-ups are being vastly overcharged for legal services.
Dixon criticised the fees being levied at small companies by legal firms following research showing that approximately one in three businesses ‘make up’ their own legal contracts.
This is thought to be a direct result of rocketing legal prices – partners in law firms are charging up to £700 an hour. Consequently, “many firms are simply out-priced by lawyers”, said Dixon. “If the bigger clients are suffering, it is that much worse for smaller businesses, especially start-ups.”
Dixon quoted an example where a start-up organisation was quoted £7000 for two sets of terms and conditions.
The former lawyer described the situation as “ludicrous” and urged law firms to “get real” with their pricing structures. He advised these firms to think long-term rather than just going for the quick wins. “Give a low cost service to a new business and it could be a client for the next twenty years.”
It is also prudent for legal firms to remain competitive, Dixon added, especially during the credit crunch. “After all, there is nothing to stop clients shopping around for a better deal,” he warned.
© Crimson Business Ltd.