What is the Average Time Required for Time-Charged Legal Services such as Contract Document Creation?

Many law firms, including ours, often handle tasks such as contract drafting, review, and revision on a “time-charge” basis, meaning that the attorney’s fees are based on the amount of time the attorney spends on the task.

In our firm, we operate as follows:

• For retainer contracts, we charge, for example, 50,000 yen for up to 2 hours per month, and we prioritize our retainer clients.
• For non-retainer clients, we charge from 35,000 yen per hour, and we prioritize our retainer clients in our response.

However, while the time-charge contract, which is based on the “time the attorney spends”, is easy to understand in a sense, it has the disadvantage of making it difficult to predict how much time the attorney will need to spend on a particular task, and therefore, it is difficult to see the total attorney’s fees at the stage before the request. For example, it is difficult to understand how many contracts can actually be drafted in the 24 hours of the retainer contract “up to 2 hours per month”, or in other words, 24 hours in 12 months.

Although it will only be an “estimate”, we will explain the average working hours for the types of tasks that we often receive from our client companies.

Guidelines for Operating Hours of Legal Services

Legal Research

We conduct research on potential legal issues related to various operations of our client companies. This includes investigating related laws, precedents, and court cases, and making judgments on the legality of the business models being considered by the companies, as well as the legal consequences of potential troubles that may arise.

On this page, we roughly categorize the cases we have actually received in the past approximately one year into:

• “Large-scale”, which are typical of large-scale cases
• “Average”, which are typical cases
• “Small-scale”, which are typical of small-scale cases

We will describe the approximate required time close to the median for each case. Of course, in reality, there are cases that require a large amount of research even for a single legal issue. We hope you understand that these are “medians” based on the “three categories”.

Contract Drafting

This service involves creating necessary contracts and other documents related to transactions that a company intends to carry out. Of course, there are infinite patterns for “contracts”, but for convenience, we classify contracts into the following four categories on this page.

Also, in investment scenarios such as M&A and third-party allotment increases, for example,

• As a lawyer for the investing company, we create a term sheet for the third-party allotment increase, and based on the negotiation results, we create multiple contracts such as investment contracts and shareholder agreements.
• As a lawyer for the company receiving the business transfer, we conduct necessary D&D, design warranty clauses based on the results, and create a business transfer contract.

Such tasks also arise. Therefore, in the case of large projects, a certain amount of working time is inevitably required.

Please note that, especially in relationships with new clients, there may be cases where more time than mentioned above is required for hearings and answering questions about deliverables. Conversely, understanding the client company’s basic business model is essential for creating contracts, and the advisory contract is intended to build a relationship where we are always aware of the client company’s business model, reducing the time needed for hearings and the like.

Contract Review and Revision

This can be considered the core of our legal services for our clients. We check the contracts that companies are about to enter into, analyze the risks, and make necessary revisions and comments.

Dispute-Related Services

Our dispute-related services involve out-of-court negotiations, litigation, provisional dispositions, and other court procedures. In the case of typical disputes, we may determine attorney fees based on a standard that conforms to the “Former Attorney Fee Standard”, rather than a time charge. We provide a detailed explanation of the “Former Attorney Fee Standard” in the article below.

https://monolith.law/corporate/basis-for-calculating-lawyer-fees[ja]

However, there are disputes that do not fit the above standard, and in such cases, we may propose a time charge model.

Please note that we do not accept single-case tasks such as “creating and sending one certified content”. The above is a description of the average working hours for creating certified contents, etc., as part of a dispute case received from our client companies.

Sharing Method for Actual Working Hours

Real-time Sharing via Google Spreadsheets

Our firm uses various services such as ChatWork, Slack, Teams, Facebook Messenger, LINE, and email as means of communication with our client companies. Within these communication methods, we share the actual working hours related to the respective client company in real-time using a time charge management table on Google Spreadsheets.

Reporting via Monthly Reports

Furthermore, for client companies with high operation levels and often exceed a certain amount of retainer fees (roughly around 150,000 yen per month on average), we prepare monthly reports on the operation status. We aim to deliver these reports around the 10th of the following month.

Summary

Time-charge contracts can be difficult to understand for IT and venture company managers who want to request work but have little experience in hiring lawyers and do not know how much time will be required, and therefore, how much the lawyer’s fees will be. Also, retainer contracts such as “50,000 yen for up to 2 hours per month” can be unclear in terms of how much more work can be requested in the current month if the current work status is unknown. Our firm is attempting to improve these issues in the ways mentioned above.