“Legal advisors are seldom loved but often needed.”
ROBERT B. MCKAY, introduction, What Legal advisors Really Do
Many people know that they need a legal advisor at some time in their lives. They know that they need that expert advice on some or other issue that affects them personally or professionally. What they don’t know and do not like is the cost implications of obtaining that advice.
It can be daunting to receive a 3 page memorandum or an agreement after a consultation and then receive a bill for R20 000, R30 000 or even R100 000. The standard reaction is one of outright horror and dismay. How can someone charge me this for so little? The answer lies in exactly what work goes into creating that document for a client.
Each attorney is different but there is a definite process that each one has to follow when dealing with any client. This post details those steps to give you a better understanding of just what you are paying for when you appoint that legal advisor. The often astronomical legal fees that can be charged is the topic of another post altogether and will not be dealt with in this article.
All of us spend years learning how to find, interpret and apply the law. Many of us spend even more time being experts in one particular area of the law. These studies are challenging, time consuming and expensive. After 4 years of studying towards a degree we feel that we know the law and how to use it.
Unfortunately, it comes as quite a shock when you have to spend 1 or 2 years serving articles as a candidate attorney or a year’s pupilage as a candidate advocate in order to get much needed practical experience under the watchful eye of a fully qualified practitioner. This is when you realise that you know next to nothing about how the law really works in practise.
At the same time you are expected to take a course in practical legal training to ready yourself to write your board exams. These are necessary if you ever really want to join the profession. 4 exams written over the course of 2 days is no mean feat.
Those of us that stay the course, complete our 1 or 2 years, manage to pass our board exams are rewarded with a court order saying that we are allowed to practise law for reward. This comes with an oath that requires you to conduct yourself truly and honestly and in a manner that distinguishes you. This is no mean feat.
Consultation and Identifying Issues
When you first meet with an attorney or an advocate you will be asked to tell them just about your entire life story. There is a reason for this: we need to get as much information about you and your problem as we possibly can.
You will have to provide us with every little bit of information that you can so that we can have as full a picture as possible. Most people wouldn’t think that the details are such a big issue but to us they can be the difference between fantastic advice and something not worth the paper it is written on.
Those tiny details that to you may seem inconsequential can often be the pivotal piece of information that can radically change the advice that we give you.
Once you have met with your legal advisor, he/she will take all of the information you have given them and sift through what is relevant and what is not relevant. They will take all of the important information and analyse it to determine just what issues you are facing and the best option/s is to solve them. This is not always a simple task.
They will sort through everything in an orderly fashion (hopefully) and determine just what obstacles are facing you and why. This is why each detail is important and why you should always be 100% honest with your legal advisor when they ask questions. It is not often that they ask something irrelevant.
As we work through the information we will many times come up with several different issues to be worked out. These are almost always from different areas of the law and more often than not can be rather contradictory at first glance. They can also lead to very cumbersome requirements being placed on you.
For example: Jake has R7 million, a 30% stake in a private company and a farm that he wants to leave to his wife and children who are aged 3 and 7. From those facts the following are some of the problems/issues/questions that will immediately arise:
- What is the matrimonial property regime?
- How will the application of the matrimonial property regime affect the way assets are distributed?
- What is the most tax effective way to distribute the estate?
- What are the tax consequences of distributing his assets?
- Does Jake have sufficient cash reserves to pay any Estate Duty?
- What happens if his wife remarries after she inherits?
- Can the farm be owned by 2 or more people jointly?
- What is the best way to protect the children if both Jake and his wife die?
- Can Jake deal with the shares as he sees fit or is there an agreement with the other shareholders in the company that prohibits this?
- Does Jake have a previous will in place?
All of these issues will have an effect on how the issue/s are resolved.
Once a plan forward (or 6 or 7) have been identified they will then move on to the next stage.
Now I know, you are paying for expert advice and you expect your legal advisor to advise you here and now. This is usually possible when it comes to standard everyday things like a basic will or drafting a basic loan or lease agreement or any standard transaction. But sometimes they will be faced with solving a problem or structuring a transaction that is outside of the normal everyday problems/transactions. This is when it is necessary for your advisor to go and research the problem to find out just how to implement the proposed solutions.
Unfortunately we are not all experts in every aspect of the law and (as much as we like to pretend otherwise to ourselves) cannot know every provision in every Act and the exact outcome of each and every court case decided. That doesn’t even cover the numerous international and cross-border implications for certain people. This is why we will sometimes have to do some indepth research.
This requires a detailed understanding of how to find and interpret the law. Yes, I hear you say that you can Google the answer but it is not always that simple.
Laws are often written in such a way that even those of us who have been taught how to read them will find them difficult to understand. It even happens that something that may seem straight forward may not be as straightforward at all. This is when the real work starts and we have to start pulling out the dusty books to find how these things have been interpreted over the years by courts and how various academics have proposed solutions. These interpretations can sometimes seem at odds with what is in the legislation.
For example: Jake is an auditor of or the ABC Trust. Jake notices that there is some irregular movement of funds in the books of account of the trust. Section 45 of the Auditing Profession Act, No 26 of 2005, as amended, states that where an auditor of an entity is satisfied or has reason to believe that a reportable irregularity has taken place or is taking place in respect of that entity must, without delay, send a written report to the Regulatory Board.
Seems pretty straight forward right? The problem with this section is the fact that the term “entity” has not been defined by that piece of legislation. So what do they mean by “entity”? Would this include a trust?
This is where it is necessary to go deeper and find out just what the law thinks an “entity” for the purpose of this Act is. Not a simple task and many times there really is no answer. This is where the interpretation of the law comes in. Law students can spend an entire semester taking a course on interpretation of the law and how to go about it.
Often times this can take many, many hours of research and following the clues back to the source. And sometimes even taking a risk where there is no clear answer. And each of these hours is time spent by that legal advisor trying to solve a problem for you. This is why legal advisors are some of the most cautious people you will ever meet and why we dislike taking too many risks where the outcome is not reasonably certain.
Once the law has been determined and the correct interpretation applied, your advisor will draft a memorandum (or an email or letter) explaining the complicated law in simpler terms. They will then show you how the law applies to your problem and how it can be solved. Taking a complicated legal question and reducing it to a page or 2 can take quite a long time.
If an agreement is required to be drafted they will set to work outlining the correct drafting. They will painstakingly piece together the clauses required to legally and effectively put into place the right document to suit your needs. These documents are seldom short and often littered with what you would assume are superfluous Almost all of those clauses are necessary and each provision and clause serves a very real purpose. And often we will use language that seems repetitive and overly verbose but when you draft a legal document you can never be too careful.
We will use words, phrases and sentences that don’t seem to serve any purpose to you, but to us each one is a tiny glimpse into the real working and purpose of the agreement. You must remember that these documents are designed to give you the strongest protection we possibly can give you and regulate each and every single foreseeable eventuality and possible problem.
You are then given an opportunity to peruse the document and give us your comments and ask questions. We amend the agreement or explain why it shouldn’t be amended and explain anything unclear to you. That way we are certain that you understand the contents and effects of just what you will be signing and just what your rights and responsibilities are.
I know that often it seems that we don’t do very much work and what you get is not with what you put in, but on average when a legal advisor hands you an agreement or an opinion, what they are really giving you is years of study and skills refinement as well as hours of research and mental gymnastics.
In addition, you are usually not our only client who is demanding the same level of care and expertise and attention. It therefore becomes a very finely balanced juggling act to provide each of our clients with the same quality and standard of work.
As with all things in live, you will receive only what you are willing to pay for. If you want something thrown together in an hour because that is all you want to pay for, more often than not you will only receive an hour’s worth of work. Quality and quantity do not always go hand in hand when it comes to legal work.