So there you are, looking at a contract you found on the internet. You’re thinking about using it for your business. It looks pretty good to you. But you also think to yourself, “Maybe I should have an attorney look this over.” You’re probably thinking this because society has taught you that sophisticated business people use lawyers. Then you think to yourself, “I wonder how much it would cost?” If you’re familiar with this situation, then this post is for you.
As with any question related to law or a lawyer’s services, the answer is the the same: It depends. Here are some factors it can depend upon:
- What you want the attorney to look for
- Regulations in your Industry
- The amount of money at stake
- The duration of the contract
- The length of the contract (ie: number of pages)
- How frequently the contract will be used
- If you need review or drafting services
- Your risk tolerance
- What the contract is for
- Your business preferences
- How satisfied you are with the terms
- The number of parties involved
- Your budget
- Your industry
- Your relationship with the lawyer
- Your lawyer’s experience, preferences, and current workload
- and more…
Example 1: An Easy Review – “Explain this”
Est. Cost: $135-350
If you limit the scope of the review and know your concerns, you can ask the attorney to only look at those areas of concern. If you’re happy with the contract overall, but you don’t understand some of the terms, you can literally circle the terms you’d like the attorney to explain to you. Your attorney will be able to explain those terms in normal English so you can know if they work for you. This is not going to be very expensive and is a great idea. You don’t want to sign things you don’t understand. If you have a good relationship with your attorney, this can actually be done in one phone call.
In general, if you can limit the scope of the review, the fees will be less. The trade off is that you will have to accept the fact that your attorney will not review other aspects of the contract. So you can’t point fingers at the attorney if something doesn’t go well.
Related post: Your Contract Has Problems. They all do. (coming soon)
Example 2: A Medium Review – “What do you think about this?”
Est. Cost: $450-3000
A mid-level review would be a contract where you want an opinion from your attorney on a particular issue. For example: Is this term clear to you? Does this comply with state or federal law? Is this a good deal? Am I getting ripped off? Should I use [this term] or [that term]? Will this prevent me from getting sued? What should I change? etc.
These types of questions will require your attorney to get to know more about you, your preferences, and your business dealings. They may require some research or revisions to the contract.
Example 3: A Complex Review – “What do you think about this, and this, and this…?”
Est. Cost: $3000+
The more questions you have about the contract or the more complex it is (based on the factors listed above), the more expensive it will be to have an attorney assist you with it.
If you have a contract worth $3000, it wouldn’t make sense to ask for a complex review. On the other hand, a complex review of a $3,000 contract you will be using numerous times (such as a service contract) may benefit from a more complex review. The point is that you should know why you want the contract review. A simple or medium level review may be more appropriate.
Asking your attorney to “look over your contract” in general is a very ambiguous instruction. This means your attorney is going to have to work to identify issues that may be of concern to you. This, in turn, means that your attorney is going to factor that work into the contract review fee. If you want to reduce how much your lawyer will charge to review your contract, do some homework. Read through the contract and circle what you don’t understand. Bracket terms that make you uncomfortable. Try to identify what it is that is making you uncomfortable about those terms. This will help you narrow the issues which will ultimately save money on the review fee.
If you want to save money on a contract review, try to pair it with other legal service you may need. For instance, I would be willing to give a discount on a contract review to a client who also wants an annual business review, has some litigation needs, or even has multiple contracts to be reviewed. (But it has to be actually legal work, not the tired “I’ll have a bunch of stuff in the future” line).
There is also nothing necessarily wrong with signing a contract you don’t understand. In fact, people have signed contracts they haven’t read and have gone on to live happy lives. It’s totally fine as long as you are willing to accept the risks associated with not reading a contract.