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In: Economics

Acommon method of controlling the cost of legal services is torefrain from consulting a...

A common method of controlling the cost of legal services is to refrain from consulting a lawyer until a serious legal problem absolutely requires it. Another approach is to hire or retain lawyers on an ongoing basis to provide advice as business decisions are made. Which approach is the most expensive? What should a business consider in making that choice?

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SOLUTION:-

* A lawyer works to earn from the disputes that arise between two parties. The parties hire lawyers so that the latter can argue in the court on behalf of the fomer. The business enterprises often hire legal consultants or counsltancy firms who can guide them about the legal consequences at each step.

* The second approach is not to hire a lawyer until and unless a dispute involvoing high stakes arises. Both the methods are the measures to control the legal expenses. However, some business enterprises do notprefer to approach the courts because of time consumption, lack of privacy, and high costs.

* The business enterprises prefer alternative dispute redressal methods like arbitration, mediation, and negotiation. Out of the two options, it is comparatively expensive to hire a lawyer time and again. The company has to hire a lawyer whenever a dispute arises, and the lawyers charge as per the reputation and goodwill of the company in the market.

* On theother hand, a legal consultant who is also the employee of the company shall provide advice regularly so that the company does not have to go through a loss. The company has to decide according to th stakes as well as the goodwill of the firm.

* The company can hire the employee in case of high stakes if it is not able to to hire a permanent employee. Thus, it depends upon the capital, goodwill, vacancy, size and the requirement of the company.

Rahul Sunny answered 2 years ago
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