For many companies, retaining legal counsel is still seen as a response to a specific dispute. From a management standpoint, however, it is a far broader decision: it involves anticipating risks, aligning expectations, and properly structuring the relationship with a strategic provider.

In that context, there is one point that tends to be underestimated until it creates a problem of its own: the professional fees of the legal team.

In practice, a large share of the disagreements between companies and outside counsel do not arise from the merits of the matter, but from a lack of clarity about the scope of the work, the stages involved, the associated costs, and the form of compensation. For this reason, properly defining fees from the outset is not an administrative detail; it is a concrete preventive measure.

The first rule: in Paraguay this matter cannot be freely waived

This issue is of particular importance in Paraguay because Law No. 1376/88 does not leave the matter entirely to the will of the parties. The statute sets a minimum protective framework for professional fees and provides for the nullity of any agreement setting fees below the statutory fee schedule, as well as of any advance waiver, whether total or partial, of such fees.

In business terms, this means that it is not enough to rely on informal arrangements, verbal agreements, or improvised payment schemes. If the agreement contradicts the legal minimum, it may be ineffective. Consequently, a company should not assume that a seemingly convenient agreement protects it against a later claim.

It is not just about price: it is about predictability

The legal framework does not merely set limits. It also provides objective criteria for assessing fees, considering, among other factors, the amount in dispute, its complexity, the quality of the work, the stages completed, and the effectiveness of the work performed.

For a company, this carries an important practical consequence: the analysis of a fee proposal should not focus solely on the apparent cost, but on whether that scheme is consistent with the nature of the matter, the time it will require, and the level of specialization needed.

Reducing the conversation to “how much the lawyer charges” is usually a bad sign. The more useful question is a different one: whether the agreement is sufficiently well structured to avoid future contingencies..

What should be defined before retaining counsel

From a preventive perspective, every company should seek to ensure that the agreement with its legal advisor clearly establishes certain essential points: which services are included, which fall outside the scope, what will happen if the matter expands or extends to new stages, how costs will be handled, and what rules will apply in the event of early termination or successful completion of the engagement.

The same applies to monthly or recurring advisory arrangements. When a company retains permanent legal support, contractual clarity is indispensable to avoid gray areas: what the retainer covers, what is billed separately, and under what circumstances the compensation may be revised.

Loosely defined agreements may seem functional at first, but they tend to become problematic when the case grows more complex, drags on, or changes in scale.

The most common mistake: believing that fees are discussed at the end

One of the most frequent mistakes is to postpone this conversation, as if it were a secondary issue. In reality, when the matter is not properly defined at the outset, the risk does not disappear: it simply shifts to the end of the relationship, when there is far less room to align expectations.

Even in litigation where the opposing party may be ordered to pay costs, a company should not assume that this automatically resolves its financial relationship with its own advisors. That point, too, must be expressly provided for.

Choosing well is also a compliance decision

In this context, retaining legal counsel should not be guided solely by the lowest bid. When the law imposes non-waivable minimums and a lack of clarity may give rise to later claims, the reasonable decision is to work with legal teams with a recognized track record and demonstrable experience.

This not only reduces the risk of conflict. It also improves planning, strengthens trust, and makes it possible to sustain more stable and efficient professional relationships.

A practical takeaway for companies

In Paraguay, professional fees are neither an ancillary point nor one entirely at the parties’ disposal. Law No. 1376/88 imposes limits that must be taken seriously: the law establishes that it is not valid to agree on fees below the legal minimum, nor to waive those rights in advance.

For companies, the key is to clarify from the outset, with the selected legal team, the scope of what has been budgeted, and to honor fee agreements clearly—because doing so not only avoids new disputes; it is also a concrete way to manage risk and protect the relationship with their strategic advisors.