The lawyer charges more.
Jokes like this about lawyers overcharging clients have been circulating since the rise of the billable hour service delivery and payment model at law firms in the late 1960s. However, beyond the humour, there’s a deeper conversation about the role of lawyers, particularly in industries like construction.
Recently, I had the privilege of participating on the Industry Experts Panel at on Sept. 26, 2024. It was an opportunity to address some of the legal issues facing construction and reflect on the evolving relationship between lawyers and the construction industry. Along with several colleagues from Procido LLP, we engaged with many folks from Saskatchewan’s non-residential construction sector at our booth during the trade show.
I’m grateful to the Construction Association of Saskatchewan for the chance to participate in ConEx, but the conversations I had left me with mixed feelings. It has been nearly 15 years since I began providing legal advice to the construction industry, but it became clear to me that the relationship between lawyers and the construction industry since that time has become strained. Listening to some of the feedback from construction contractors, there was a sense of frustration and even skepticism toward lawyers. However, despite the challenges, I believe there is hope for a stronger, mutually beneficial relationship in the future. Now, more than ever, during times of economic and political uncertainty, lawyers and the construction industry need each other.
The risks in construction and the lawyer’s role
Construction is inherently risky, especially as the scale and complexity of projects grows. While the industry still contends with classic concerns like meeting schedules, satisfying specifications and requirements, and ensuring timely payments, 2024 presents additional challenges. Construction contractors now face labour shortages, supply chain disruptions, geopolitical instability, logistical hurdles, scarce specialized equipment, and increasing regulatory demands.
Lawyers excel at identifying and mitigating these risks. Unfortunately, some in the construction industry seem to have lost sight of this value, especially as legal fees continue to rise under the traditional billable hour model. In Saskatchewan, the increasing cost of legal services has driven some law firms to focus on clients better able to pay these increased costs, particularly public sector owners, leaving private sector contractors to navigate risks without adequate legal support. This imbalance has skewed the playing field, where public owners can afford specialized legal advice, but contractors are left more vulnerable. The relationship between lawyers and the construction industry needs mending, but the path forward requires effort and change from both sides.
Bridging the disconnect
Spend time with a lawyer, and it won’t take long before they flag a potential risk:
“Why haven’t you incorporated?”
“You actually only have 40 days to file a builder’s lien.”
“Wait, you didn’t sign a contract?”
While these insights may come off as pedantic or condescending, most lawyers genuinely want to help clients avoid pitfalls that could harm their business. Unfortunately, this well-meaning advice often leads to frustration and a sense of a disconnect between the legal and construction worlds.
On the other hand, contractors may be equally dismissive:
“Why pay $2,500 to be told I’m right?”
“I don’t have two weeks to file a couple of pages.”
“No one does things that way in our industry.”
These sentiments reflect real frustrations over the perceived lack of value in legal services.The solution starts with open, honest dialogue. Lawyers must learn to scope and price their services the way construction contractors do – by clearly defining the scope of work, assigning the most appropriate resources, properly estimating the anticipated time and cost, and then managing the delivery of that scope of work in order to maintain the schedule and remain on budget.
In essence, lawyers should adopt project management principles similar to those used in the construction industry. The billable hour model may serve law firm profits, but it’s no longer serving the industry we aim to support as lawyers.
The need for change
For lawyers to regain the trust of the construction industry, law firms must change. Lawyers need to adapt their services and approach to align more closely with the way construction contractors operate. The construction industry shouldn’t have to adapt to lawyers – it’s the legal industry that must evolve.
Some law firms may prefer working with public sector owners because there is less financial risk, and they are more willing to simply follow the lawyer’s lead. However, private contractors require a different approach – one that involves flexibility, practicality, and an understanding of their unique pressures.
Lawyers tend to avoid any risk they can, which has led to a resistance to change, but in this case, change is necessary. Lawyers must rethink how they deliver legal services to the construction industry, and contractors must be open to working with those lawyers and firms committed to evolving to meet their demands. By resetting this relationship, we can better manage the growing risks in today’s construction landscape.
Chad Eggerman, B.A., LL.B, LL.M, PMP, is a lawyer at Procido LLP. This article was originally published in We Build magazine and is reprinted here with permission.