In this three-part series, we are covering what your organization needs to know about employee handbooks. If you read Part One of this series, you know that HR policies are important, but simply downloading an employee handbook off the internet and cutting and pasting in your organization’s name is probably not the best way to go. Part Two explored some of the policies that might be lacking in your organization and why it is important to address them. If you are still without all the policies you need, you may be wondering how you can get your business current.
Creating or Updating an Employee Handbook: The Options
There are several ways to get your business current on HR matters, and you should work with your HR department on this. Legal counsel can certainly be helpful in this process. But hiring a lawyer can be an investment. Here are some things that a small business can do to control costs.
You may minimize costs if you already have policies that simply need a legal review. If you can draft policies, you can often engage legal counsel to review the policies to ensure they are legally sound. While this may save on legal fees, it requires you to divert time and resources from your primary business, so this approach may be most helpful if you have an HR department or an outside HR consulting company. Also, cost savings are not always guaranteed, depending on how much work is required to get existing policies into compliance.
Alternatively, you can hire a lawyer to draft the handbook for you. While the out-of-pocket cost might be higher, you should get a customized product that is legally compliant. Once you have decided it is worth the investment to hire a law firm either to review or write policies, what should you expect from the process?
First, you will need an attorney who does employment law. Getting an attorney outside her area of expertise may be both more expensive and less effective. Also, do your research, as attorneys vary widely in expertise and legal skill, not to mention responsiveness. Check into how the attorney will charge.
Traditionally, lawyers have charged the client by the hour. In this model, depending on what kind of employee handbook you need and how large your company is, the final bill will vary based on how many hours it takes to produce the final product. Some firms will negotiate alternative fee arrangements, in which they craft or review an employee handbook for your company for one flat fee. Flat fees give you predictability on cost without the uncertainty that the normal billable hour provides. The flat fee agreement should define carefully what work is actually included. A flat fee is not intended to be cheaper, but to be more certain and easier to budget. The services you will receive for the flat fee will vary from lawyer to lawyer.
Creating an Employee Handbook: a Sample Process
For the sake of comparison, here is the process we use at Telios Law. While we sometimes use hourly rates for reviewing and drafting handbooks, we also have used a flat fee model.
When we review existing policies, we simply go through and comment on problem areas or what is missing. The client then takes the policies back and reworks them, or we redraft at our hourly rates. When we are asked to draft an employee handbook, we normally use the following flat fee process.
1. Employment Policy Audit.
First, an organization completes Telios Law’s employment policy audit. This audit reviews key questions about for-profit businesses or nonprofit organizations to ensure the employee handbook will be tailored to the unique employment situation.
2. In-depth Initial Consultation.
As part of the flat fee, the client receives an in-depth initial consultation with Telios Law to help us understand the company’s unique structure, needs, and challenges, so we can create a better end product. We discuss the completed self-audit to better identify which policies the company needs, and how those policies should be drafted. Because an employee handbook is only useful if it fits an organization’s practice and culture, this process helps tailor the creation of the company’s policies in the most efficient manner. This initial consultation usually takes about an hour and a half.
3. Creation of Policies Tailored to the Organization.
In the initial draft of the employee handbook, we create policies tailored to the organization’s unique employment situation.
4. Two Rounds of Revisions.
We collaborate with our clients, so that the end result is something useful for the company. Once the initial draft of the employee handbook is created, our flat fee includes up to two additional rounds of revisions. This “back-and-forth” process allows the client to review the draft handbook, ask questions, suggest changes, and have a collaborative discussion with the attorneys to reach the desired end goal.
5. Up to an Hour of Additional Consultation upon Implementation.
In addition to the time spent in the initial consultation with the attorney, and in the creation of the handbook itself, the flat fee also includes up to one additional hour of attorney time over the next month after the final product is delivered. This time can be used after the handbook is put into practice to wrap up any loose ends, or to ask the attorney any specific questions that did not come up until the policies had been put in place.
Getting an employment handbook in place is a milestone for a growing business. Some companies are well-equipped to create legally sound handbooks in-house, perhaps just with some external review. Others may need some assistance in drafting. Spending organizational resources for a compliant and usable employee handbook, when done thoughtfully, is time and money well spent.