Having a contract lawyer review your agreement can be one of, if not the, most important step in the overall contracting process. Understanding exactly what a contract review lawyer can do will help you make the decision as to whether or not you want to make the investment in hiring an attorney.
And why yes, having a lawyer review a contract can, at times, be quite expensive, doing so can wind up becoming extremely valuable. This is because, when you hire a lawyer to review an agreement, you are doing more than hiring someone to read over a document. When hiring a lawyer to do a contract review, you are purchasing years of experience, knowledge, and training to guide you. This experience, knowledge, and training can help you to ensure you get the best deal possible in your contract - and more importantly, to avoid getting stuck with a not so favorable one.
What does reviewing a contract mean?
Reviewing a contract can mean several things. Knowing that you need to have your contract reviewed by an attorney is an excellent first step. Knowing what you want your lawyer to do when he/she reviews your contract is better for both being able to protect your interests and your pocket.
Issue Specific Contract Review
This option might be the most economical option - so if you spending as little as possible is an important concern to you, this might be a better alternative than signing an agreement before a lawyer had a chance to look it over.
If you have a contract and either have a specific question relating to the contract or need a specific provision or clause of the contract explained to you, let your contract lawyer know that you just want this specific issue addressed.
Examples of Issue Specific Questions:
- How is my intellectual property affected by this contract?
- Do I own the rights to what is being created?
- Will this contract prevent me from working with other clients?
- Can you explain what this non-solicitation clause means?
- Can we go over this covenant not to compete and discuss how it will affect me?
Basic Contract Review
This level, while more intense in comparison to the issue specific review we just discussed, is still very "basic". Here, your lawyer will review your agreement, answer any questions that you may have about it, and will let you know if something needs your attention. Usually, this will either be done through a phone call with a client or through an email giving the client several bullet points to think about.
Basic Contract Review Plus Edits
This level will be more expensive than the basic level, but you will get more involvement from your lawyer. Not only will they review your document and answer your questions, but they will edit your agreement and review those edits with you. In the legal / contract world, this is known as "redlining a contract" and can really help move things along.
Instead of just having your lawyer point out what needs to be fixed in your contract, the lawyer will provide you a version of your contract that you can submit to the other party for review. This speeds along the process because instead of you discussing these changes with the other party, the other party is presented a version of the agreement for them to either accept or deny.
Contract Review Plus Negotiation
This is what I like to call the "handle this for me" review. Many times, a client will come along and give me a contract with the instructions to "handle this" for them.
Along with reviewing and editing your agreement, your lawyer will submit a redlined document to the other party to the agreement and negotiate the changes on your behalf.
Many times, especially with complex agreements, constant back and forths occur when negotiating the terms of a contract. With this, sometimes emotions come into play that has the potential to hurt the business relationship of the parties. Having a lawyer come in to take the steering wheel can both facilitate the process and keep the emotions out of it.
The two most common pricing schemes that a lawyer will use in terms of a contract review are flat fee and hourly rate pricing. However, the reality of the situation is that they can both vary greatly from one lawyer to the next.
Flat Fee Pricing
Flat fee pricing is becoming used very often in the modern legal era. With flat fee pricing, you pay one set fee for a legal service and regardless of how long a lawyer spends working on your matter, you pay one fee.
With flat fee pricing, expect a wide range of prices. This is mainly due to the fact that most lawyers usually need to see a contract before they can price out how much something would cost. With that being said, I would caution you against lawyers or legal services that promise one set rate, or even worse, a set rate per page. The reason behind this is due to the fact that a one-page contract can, at times, be more complex than a 60 page one. A good contract lawyer will be able to spot that out upon seeing the agreement which is why generally a lawyer will ask to see an agreement before giving any type of price.
Hourly pricing is more of the "traditional" pricing model. A lawyer will usually collect an upfront retainer and deduct an hourly rate from that retainer until either the work is completed or the retainer needs to be refilled. Though prices can vary depending on your lawyer and the level of service you've selected, the typical range for contract reviews can go from $100 per hour up to $750 (or more) per hour.
Having a lawyer review your agreement before signing it, while can be expensive, can be the difference between agreeing to a good deal and a horrible one. If you are in need of a lawyer to look over a contract or agreement, please feel free to contact us. We offer a free consultation and can let you know what your options are and what the best course of action may be for your current situation.
Julian Cordero is an Attorney, Music Producer, and Entrepreneur. Oh and he blogs too! Julian is licensed to practice law in New York and is the Managing Member of Cordero Law LLC, a New York City based law firm focusing on Business Law, Entertainment Law, and Intellectual Property.