Contract attorneys are attorneys hired to either draft or review contracts. Contracts are essential driving forces of businesses as they detail the extent of partnership or services that will be provided between the legally bound parties. It is, therefore, important that there are no errors in the wording and formatting of a contract document.A
While anybody can write a contract and give it to the other party to sign, there may be issues with the contract that will prevent it from being enforceable by a court of law. Considering the legal and often financial implications of a breach of contract or a poorly written contract, it is prudent to hire a contract attorney to review any contract you wish to sign.
Businesses in large commercial cities like Dallas are often established, with collaborations being the order of the day. These kinds of agreements have to be contractual. It would be in the best interest of everyone involved to hire a Dallas contract attorney who understands the business terrain of the city.
Such an attorney also sees to it that all regulations are met while analyzing for loopholes in the contract that could be exploited. You may be concerned about what such services will cost you.
Here are some guidelines that will help you estimate how much it costs for a lawyer to review a contract.
The pricing system
Most contract attorneys choose either one of the two major pricing systems: flat-fee pricing or hourly pricing. Sometimes you, a potential client, can request a particular pricing system, and it is totally up to the prospective contract lawyer to oblige to your request.
Depending on the experience of the contract attorney, they may opt for the flat-fee pricing system. This means that you will have to pay a single fixed fee for your contract to be reviewed. The lawyers who go for this payment system have a fair idea of how much work they will have to do on any type of contract and set their flat fee accordingly.
Usually, the contract lawyer asks to see the contract so they can have a fair idea of the quality of the draft and how much time it would take to complete its review. A major advantage to this pricing system is that it allows you to budget for the contract review from the outset, as you have a fair idea of what it would cost you to have your contract reviewed.
The hourly pricing system is more common among legal practitioners.
Here, a contract attorney charges based on their own set hourly rate. This rate is most times dependent on their experience and expertise, the extent of services to be provided, and the degree of complexity associated with the contract to be reviewed.
You first pay a retainer, and the lawyer will make hourly deductions from it until the contract is completely reviewed or there is a need to add to the retainer. Depending on the attorney, the hourly rate can range from $100 to $1000 per hour.
Other factors that influence the cost of a contract review
Choosing to have your contract reviewed by a law firm or a private practice lawyer has an impact on what it will cost you. Lawyers who set up their practice tend to charge less than most large law firms with high overhead costs they will want to offset.
But beyond these and the pricing system, there are a few other factors that can determine what it costs for a lawyer to review your contract.
1. Type of contract review
The type of contract review you want can be used by a contract lawyer to determine what it will cost you to have your contract reviewed. The types of contract reviews include:
Basic contract review
The basic contract review is one in which your lawyer analyzes the more general features of your contract. It reviews your business objectives, what you hope to gain from the contract and how this interest is phrased in the contract.
It requires a surface-level examination of contracts to spot areas that may need to be improved. You can also ask any question you want about the terms of the agreement in your contract.
Basic contract review plus edits
This type of contract review is an upgrade to the services rendered during a basic contract review.
In a process known as redlining a contract, the lawyer carries out a surface review of the contract, spots a problem area, notes them down, and makes edits to correct them before sending it to the other party for review.
Issue-specific contract review
An issue-specific contract review involves the attorney assessing a specific area of your contract. It could be about a non-disclosure agreement or a non-compete clause, ownership of intellectual property, and all such particular concerns. The cost is less than that of a basic contract review and usually hovers around $150 to $500.
Contract review plus negotiation
This contract review type is more extensive. The contract attorney reviews, edits, redlines, and negotiates better terms on behalf of their client. Negotiation can be demanding, with the signatory parties often unwilling to yield to the offers of the other. A contract attorney can help to offer a middle ground that will be fair and acceptable to all signatories of a contract.
2. Type of industry
The type of industry can determine what the rates or charges of a contract attorney will be. Some industries have higher valuations than others, and attorneys generally set their rates to reflect this. A contract attorney in the oil and gas industry will charge more than one that specializes in real estate contracts.
3. The value of the consideration in the contract
Consideration is one of the elements of a contract that puts up something of value that benefits both parties in a contract. The value of this consideration can be used as an index by the contract attorney to determine the cost at which they will review the contract.
Hiring a contract attorney to review your contract is optional – you can sign a contract without having an attorney look at it. However, it will be in your best interest to invest in one.
This is because a contract lawyer pools years of training and expertise to review any contractual agreement you may want to go in. This can save you from many legal battles and exploitation while guarding you against the risks of heavy financial losses.