In today’s economy, co-ops and condos are looking for ways to cut costs wherever they can, and many are turning to examining their legal bills. But the problem therein is two-fold: firstly, you don’t want to compromise your relationship with your attorney or secondly, risk high costs resulting from negligence, misinterpretation of documents, or other oversights.
Every association needs a law firm to help it navigate everyday legal issues such as contracts, sublets, and collection actions, as well as less-common ones like full-blown lawsuits. Some associations make the mistake of forgoing counsel in an attempt to save money. This costly mistake can lead to expensive litigation, ultimately putting an association and its budget in the hole.
“This is where the old warning of not being ‘penny wise and dollar foolish’ comes into play,” says Donna DiMaggio Berger, a shareholder and nationally-known community association lawyer with the law firm of Becker & Poliakoff with offices in Florida, New York, New Jersey, Washington, D.C. and Virginia. “There are certain things that a board should know absolutely require advance attorney involvement to create a safety net for the board if things go wrong. This list includes: signing a contract, terminating a contract, hiring an employee, firing an employee, making material alterations to the common areas, selling property, buying property, denying a tenant or a purchaser and borrowing money.”
Paying By the Hour vs. Retainers
“Billing arrangements vary depending on the nature of the work being performed,” Berger says. “Some types of work lend themselves to a flat fee arrangement while others do not. Most attorneys provide a variety of billing options for their clients depending on the services being performed.”
According to Steve Welhouse, a partner with The Sterling Law Office in Chicago, the vast majority of associations pay for legal aid by the hour, with the rate varying from firm to firm.