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February 28, 2007 by jack petrie.
Attorneys get a bad rap.
I agree, $400/hour for legal review of a document is a lot of money. However, what most clients don’t do is to ask their attorney for either their hourly rate or a ballpark estimate of total hours necessary for review of a document. Take that number of hours and multiply it by the hourly rate and just accept that number as a cost of doing business. And most importantly, ask your attorney to let you know when he/she reaches that number of hours. For example, let’s call it 25 hours and/or $10,000.
At this point, you have bought in to the attorney’s pricing schedule. Here’s where the value proposition comes….
Consider a typical New York City commercial lease. While most leases more closely resemble the White Pages in size, every lease contains a set of clauses created to offset and prevent historical contingencies that at some point in time cost a landlord some of his/her “M-O-N-E-Y”.
However, once a tenant exceeds the first $10,000 of fees for legal review, each incremental $400 hour becomes more and more valuable.
Over a period of time, a lease document will take a life of it’s own long past the payment of attorney’s fees, the relocation, and the occupancy itself. However, many of the pro-landlord lease clauses can take effect, even after the lease term. Careful negotiation of these clauses can have a much greater financial impact than the few hundred dollars (or few hours of time) invested.
Consider the downside: after concluding payment of an escalating rental stream over a ten-year period and vacating a property, you find yourself in litigation with your former landlord over a lease clause which you remember conceding in the interest of saving a little time or money ten years earlier.
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