Monthly Archives: November 2014

Power of Attorney and Personal Directive – Why you need to get these documents right now

Imagine that you suffer a serious head injury in a car accident, or you have a stroke.  You become mentally incapacitated, either permanently or temporarily.

Imagine your loved ones having a serious difference of opinion as to what sort of medical care you should receive.  Perhaps your parents and your spouse fundamentally disagree about your medical care.

What if there is a cash crisis and you need to sell your home (or even renew an existing mortgage)?  Did you know that no one – not even a spouse who is also on title with you – will be able to sell that property for you or renew your mortgage if you are unable to make decisions and sign documents for yourself.

Because you are still alive (although incapacitated) a Will (and the Executor appointed by your Will) is not going to assist you, because a Will only applies after death.

Instead, your loved ones will need to apply to a Court to be appointed as your Trustee to manage your money and property, and your Guardian, to protect your person.  This is a lengthy and expensive process.  All this in a time of crisis.

Imagine if you could avoid that horror story with two simple documents.  I am happy to confirm with you that you can do this.  In our opinion you should do this right away.

Here are those two documents as used in Alberta (variations of these exist in other Canadian provinces as well):

  1. Power of Attorney.  This document allows you to appoint another person to take over the management of your assets, debts and financial affairs generally in the event that you become incapable of doing so yourself.  This document can come into effect immediately (for example, if you need to leave the country on business for an extended period of time) or only if and when you become mentally incapacitated.
  2.  Personal Directive.  This document (sometimes called a “Living Will”) allows you to give another person the power to make medical and other personal care decisions for you in the event that you become mentally incapable of doing so yourself.  We normally include guidelines that express your personal wishes as to how to make decisions, and in particular to give direction to allow you to die with dignity if you are both terminally ill or injured and you have lost all ability to interact meaningfully with the world around you, with no hope of recovery.

By planning in advance for the possibility of mental incapacity, you are achieving at least the following two results:

  1. Your wishes will be respected.  Planning allows you to decide now, while you are still healthy, who you would like to appoint as a substitute decision maker for you should you become mentally incapacitated, as well as what powers (and limitations) you wish them to have.  These documents, when properly prepared, are legally binding and enforceable.
  2. You will make a smart investment.  It is far less expensive and time consuming to plan ahead than to deal with matters when a crisis actually occurs and you and your loved ones are generally least prepared for it.

The best time to make these documents is while you are healthy and don’t need them.  If mental incapacity has already emerged, it can be too late.

At Patriot Law Group, we feel so strongly about the need for these documents that we offer prices that bundle both the Power of Attorney and the Personal Directive together with your new Will so that you can have the most comprehensive legal protections in place for disability and death.

Planning and Pricing: the Patriot Law Group Difference

Last week we outlined the problems with the “Billable Hour” in the provision of legal services.   The post this week is on how Patriot Law Group is different.

Essentially our difference is all about planning.  At Patriot Law Group our focus is on catering the legal services provided to our clients to work towards a clear goal, based on a mutually agreed plan.   In summary, this involves the following steps:

  1. We Understand and Evaluate Client Goals.  We start by determining and evaluating the client’s goals, and the factual situation presented by the client’s circumstances.
  2. We Develop a “General Plan.” With an understanding and realistic assessment of the client’s goals,  we outline a general plan which focuses on the “big picture” strategy to move the client’s matter forward.
  3. We Develop a series of specific tasks in support of the General Plan.  The next step involves determining exactly what legal work must be completed to move the client’s matter forward in a way that is consistent with the General Plan.  This step includes determining both the “small” and “big” tasks that must be completed.
  4. We Price the Plan.  Based on the tasks to be completed, and focusing on the distinct tasks that would take the client to the next step at which a decision would be required, or a further analysis would be necessary, we prepare a quote for the legal work involved for the specific steps.
  5. Clients review and approve the plan and the quote.  Clients then have the opportunity to evaluate and approve (or not) the general plan, the specific tasks outlined (the “Scope of Work”) , and the quoted price for the legal services.
  6. We Move ahead with the Plan.  If the client agrees with the proposed plan and the price for the services, then the lawyer and the client move ahead with the plan.  The plan is moved ahead in a segmented fashion. This means that the client has the opportunity to review and approve the steps (and price) necessary for each segment of the work.   Each of these segments is focused on the work required to bring the matter to a stage where a new decision is required by the client.
  7. We Prepare a Change Order.  If additional work is required to move the client’s matter forward after completing  the approved Scope of Work, then the lawyer prepares (and the client must approve) a Change Order adding additional tasks.

Our view is that this approach is superior to the billable hour approach to legal services for a variety of reasons, including:

  1. The lawyer and client are clearly aligned as to the goals and task that must be completed to work toward those goals.  This means that there has been coordinated “strategic planning” about the client’s case.
  2. There is certainty as to the price (and value) of the services being provided and the client has the ability to review and approve these at each stage.
  3. There can be differentiation in the price of each task to be completed so that the fees reflect the value being provided.  So, for example, there would be larger fees for important work such as the participation in a settlement meeting, and smaller fees associated with routine administrative matters such as providing copies of correspondence.

If you are interested in finding out about how Patriot Law Group may be able to assist you with your legal issues, please contact us.

Why we don’t charge “by the hour”

timer photoLawyers who are in private practice charge fees in return for the professional services they perform.  This is the same for dentists, accountants, and other professionals.

Most lawyers bill for their work on an hourly basis, with some exceptions such as the legal work on a residential real estate deal.  The lawyer charges a fee based on a rate measured by the hour and rounded up to a designated increment of an hour.  Common increments are 1/10 of an hour (6 minutes), or 1/4 of an hour (15 minutes).  For example, a lawyer who charges $400 per hour for his or her work, and who performs 5 minutes of work on a matter would charge either $40 (the closest 6 minute increment) or $100 (the closest 1/4 of an hour) for the same work.  Lawyers call this “the billable hour”.

At Patriot Law Group, we don’t believe that charging clients by the hour for the work we do is the most appropriate way to price legal services.  We do it differently.  Next week we will be discussing how we price our legal services, but this week we want to explain why we think charging by the hour for legal services is not the best option for our clients.

There are a variety of reasons why charging by the hour for legal services is not the best way to deliver legal services.  These are the four most important ones, in my view:

  1. Hourly fees are essentially arbitrary. They tell you absolutely nothing about the quality or value of the legal services being provided to you.  The underlying assumption is that the higher hourly fees means a better lawyer and better legal services.  It is not at all uncommon for lawyers these days to charge $300 – $450 or more per hour  for their services.  There are senior lawyers who charge $900 per hour or more for their services.  As a lawyer myself, I cannot ever see myself paying $900 for an hour of anyone’s time (except if that person will solve my problem in an hour or less, and the problem to be solved is worth $900 or more to me).
  2. Hourly fees create a conflict of financial interest between lawyer and client. Efficiency in getting work done faster is normally a good thing.  From a client’s perspective, it is certainly highly desirable.  However, the result for the lawyer is less fees and therefore less income.   Thus, the lawyer’s desire to earn an income is in direct conflict with the client’s interest in efficiency and economy in his or her spending on legal services.
  3. Hourly fees assume that all legal work is of the same value.   It seems obvious to us that this cannot be true:  the active work involved in your lawyer devising an innovative solution to your problem is far more valuable to you as the client than the same amount of time spent sending you a copy of routine correspondence.  There is no distinction between the two, however, with legal services based on charging for time.
  4. Hourly fees make the cost of legal services uncertain.  If you are going to spend your money on something, you want to know how much you will be spending, and for what result.  In an hourly billing arrangement, you don’t know beforehand what the lawyer will be charging, because the lawyer cannot normally tell you how long the work will take.  You will find out when you open the lawyer’s bill.  Imagine bringing your car to be serviced, asking how much it will cost and having the mechanic tell you, “I don’t know.  I will let you know when I’m done.”

These are long standing and well recognized problems associated with billing on the basis of time.  It does not have to be that way.  There are some lawyers (still too few, in my view) who offer a different approach to legal fees.  Next week’s post will discuss how we do it at Patriot Law Group.