Help - A Tight OzBargainer Needs a Commercial Lawyer

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  [Deactivated] on 08/08/2017 - 11:24

  +4

  There was a commercial lawyer AMA thread a few weeks ago … not sure if he's still replying.

  a. A 1 hour phone consultation and 8-page general advice regarding the best structure to run a business: $3,500

  I would've gone to an accountant for this … unless you're already beyond the small business stage or getting outside investors/VC

  b. Retail lease negotiation (6 emails back and forth + advice), didn't go through with the lease: $4,000

  I suspect most small business don't go to commercial lawyer for an average retail lease. Try using a conveyancer or your regular high-street solicitor that does wills, etc

  c. Retail lease, engaged a lawyer, had a 20 min intro phone call, but decided against the lease 3 days later. No other work done, no lease reviewed, no advice given: $220

  I guess when you say 'engaged a lawyer' you entered into a retainer agreement … so you would've known the costs up front. The key for this type of work is to have a good relationship with a single lawyer who'll answer basic questions without billable hours, rather than finding a new one for each piece of work.

  • 

    oztite on 08/08/2017 - 13:05

    Thanks for the advice. I'll look into a conveyancer. So far I couldn't find any small firm lawyer that's willing do do that (unlike accountants that I have dealt with so far, who are all willing to give small advice for free)

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  Trying2SaveABuck on 08/08/2017 - 11:56

  +2

  You're getting ripped off, i cant understand how you would go to a commercial lawyer and not ask what it is going to cost you and if you did why are you complaining?

  Most of the things above you could of used an accountant.

  If your business is big enough to hire a commercial lawyer you probably have the money to pay those exorbitant fees and if you dont have the money then your probably not going to be in business for long… I'd suggest investing a bit of money in to education and get at least a diploma in business management

  • 

    oztite on 08/08/2017 - 13:03

    I did ask for a quote:

    Scenario a: quoted $650 for a "discussion" after I already had a "discussion" with my accountant. Was told by the lawyers that accountants only look at things from tax point of view and not asset protection etc. End price much higher because "it was a complicated situation".

    Scenario b: quoted $2000-$2500 to complete lease, sent a letter for $4500 half way through because "negotiation took longer than expected". Argued with them and settled for $4000 with them immediately ceasing all work related to the case.

    Scenario c: quoted $1500 for lease review. Didn't know just to engage them costs $220 despite nothing being done.

    • 

      Trying2SaveABuck on 08/08/2017 - 13:47

      Simple as it gets dont pay it? what are they going to do about it? if you have a quote i wouldn't pay a dollar more.

      If they take you VCAT i'd argue that was the agreed cost and any additional work was not authorized

      • 

        oztite on 08/08/2017 - 13:58

        +1

        I seriously considered that option… but me as an individual vs a law firm… I thought I'd just pay up in the end… not worth the trouble. In theory they have unlimited legal resource…

      • 

        Trying2SaveABuck on 08/08/2017 - 16:31

        @oztite: Legally no one outside of the government can take money from you.

        But i see your point but if it was me i wouldnt of paid'em more then i own them

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  picklewizard on 08/08/2017 - 11:56

  +1

  I have no knowledge of such things, but I'm puzzled as to why you need a lawyer to sign a retail lease?

  …can you not just sign the lease? $12k is pocket change in the grand scheme of things!

  • 

    oztite on 08/08/2017 - 13:07

    +2

    I guess that's the other part of the question - do I need a lawyer? Seems like it's the "right thing" to do when it comes to a retail lease. If people have experience doing these without a lawyer I'd be interested to know. It's kind of like getting a conveyancer when buying a house, no matter how simple the deal is, I always kinda think it's useful to have someone who knows the law. Maybe I am wrong…

    • 

      picklewizard on 08/08/2017 - 13:38

      +1

      I guess, again no experience in such areas but at $1k PCM it doesn't seem like a high-risk contract that you're entering into, but I openly admit to talking out my arse on this matter!

    • 

      pandabun on 09/08/2017 - 08:05

      It's always safe to have someone checks out the contract.

      We got into a bit of a mess. It's still going on but the landlord seems to be better to deal with now. Our business partner signed a contract that says something along the line they can increase the rate on date X and if it happens in the past, we are obliged to backdate and pay whatever is outstanding. So we have to get lawyer to look into this and negotiate the rate and money outstanding.

      Can't be too careful I say.

  • 

    [Deactivated] on 08/08/2017 - 13:34

    +1

    why you need a lawyer to sign a retail lease?

    It's a commercial contract. You don't get the same legal protections as with a residential lease. They might throw in things like being personally liable (instead of company) for rent if you default. You need someone to talk you through what's 'standard' and what's not.

    A commercial real-estate agent probably has enough experience with these things to talk you through it … obviously don't ask the person who's leasing the property.

    After you've looked at a few agreements, you probably know enough to request the changes yourself.

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  poboy on 08/08/2017 - 12:00

  Is the lease a standard boiler plate lease? If so, there won't be any nasties. Read through it and see if you have any concerns.

  Negotiate for either fit out or free rent. In general you negotiate a free month for every year of the lease.

  Take out an option to extend. Get another option when this expires.

  Look at the notice they have to give you to evict, ensure you're happy with it.

  I've done this stuff 3 times without legal, it's not rocket science. Have someone older than you that is savvy with the law and small biz look at it.

  • 

    oztite on 08/08/2017 - 13:08

    Thank you, that's what I need to hear I guess, that it is OK to do it myself without a lawyer.. I've read through all document and am happy with the terms… thank you!

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  naritas on 08/08/2017 - 13:36

  +2

  Hi Oztite,

  We do business with commercial lawyers on a daily basis and probably the biggest issues that need to be addressed upfront are:

  1. Scoping. Big and unexpected costs, when not coming from unethical service providers, we typically see when a client doesn't know what they want, is paying a law firm to find this out and has engaged a legal sledgehammer to kill a proverbial ant. That is, in our experience, there is no point employing a medium (or larger) firm that is geared up for complex and time critical matters where each partner has one or two associates assisting them (which you will be billed for) when all you need is a small firm oriented to straightforward contract work (which this kind of issue is likely to be descriptive of). In other words, you don't need an Australian version of Harvey Specter to do some simple commercial contracts or conveyancing - and if you go to a law firm with a clear scope of what you need- you shouldn't be billed for one.

  2. Costs agreement. In our experience what follows a scope of works/written delineation of requirements provided by a potential client to a solicitor is a costs agreement being issued by the solicitor to the potential client. In our experience these are documents that the solicitor is meant to abide by and there should be no opacity regarding what the maximum is they can charge, their basis for billing and dispute resolution process. In short, if there is an agreement that the maximum bill payable for the agreed scope of work is $1000, you will have strong ammunition to dispute the bill with their local law society if you receive a higher bill.

  As a side thought, our team has done work with a fellow Ozbargainer (Bronson Freeman of Freeman Legal). The feedback on him has been excellent and, by all accounts, he is a man on the level when it comes to straight talking/billing. Perhaps he may be worth sending a PM to. If he couldn't assist personally, he may be able to guide you in the right direction.

  Hope this helps.

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  Pumpkin_rrr on 09/08/2017 - 07:40

  I think you need a good Accountant: one who is senior in their firm. They would have seen lots of Commercial Leases and understand the T&C and the financial implications. You can continue to use them to structure your set-up, all in one fee!

  Also the Real Estate Agent : one who has many years of experience, knows the area and the industry.

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  jhmtaylor on 09/08/2017 - 12:11

  +1

  I don't think you need a lawyer. Just find a nice quite place, and read through the contract yourself carefully, making notes of the key points and check that the details of the parties to the contract are correct. If there is something you do not like or understand go and talk to the property manager about it. I also agree with seeking accountants input.

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  cassidy02 on 09/08/2017 - 20:53

  +1

  If you're in Vic, I recommend MDG Lawyers. Small but thorough and good pricing. I'm a commercial property manager and use them regularly.

  Note about advice above to ask the property manager, you can do that but as someone else said, you are signing a legal contract and you should get legal advice on it. Also remember the PM's client is the Landlord, not the tenant. They have to be ethical but the tenant doesn't pay their fees, so they may not be inclined to spend a lot of extra time reading through it with you when you can pay a professional.

  Final word: please make sure you understand everything in the lease. I have a lot of tenants who sign and don't understand their outgoings liability, assume everything is the same as a residential lease when it's absolutely not.