5 Steps Summary
- Write down the most important things that a business lawyer can help you with.
- Check legal directories for attorneys that specialize in your industry.
- Sit down with shortlisted attorneys and ask questions to determine the best fit.
- Negotiate a fee structure.
- Know what things don’t need an attorney’s help.
One of the worst things that can happen to a business owner is finding out that someone is trying to sue their company. Even the most cautious business owner will find themselves on the receiving end of legal action at some point.
The best way to prevent the majority of legal problems and minimize the damage from any that occur is to work with a business lawyer. Think of your business attorney like a partner who protects your business interests and offers legal advice.
Hiring a great business lawyer does not have to be expensive, and any cost will be significantly overshadowed by the savings from costly legal proceedings.
What Are the Most Important Things That a Business Lawyer Can Help You With
It is better to be proactive with your business’s legal needs. Here are some of the common reasons a small business owner may need an attorney:
- To help choose a business entity – The business entity you choose can affect the growth of your company. A business attorney will be able to help you weigh the pros and cons of each option.
- Raising venture capital – A business lawyer can help you to navigate the securities laws that regulate raising capital for your business.
- Creating founder agreements – A founder agreement will protect each party of a partnership and divide up the resources and responsibilities of each partner.
- Review contracts – Your business attorney can help ensure all your contracts are iron-clad and enforceable, whether that is contracts with employees, suppliers, or contracts.
- Dealing with employment disputes – Lawyers can help put a quick stop to any employment or labor lawsuits.
- Intellectual Property Protection – By protecting intellectual property, you ensure your company’s competitive advantage.
Hire a business lawyer before you get sued, often they can prevent issues in the first place or at least minimize the size of the issue. Consider whether your business will be best served by a business lawyer who generalizes or by a business lawyer who can help with specific issues.
Check Legal Directories For Attorneys That Specialize In Your Industry
When you search for a business lawyer, you should compare attorneys so you can find the right one for your business. Find a potential list of candidates with the expertise you need on a legal directory. Check online reviews and read what previous clients say about the attorney and how they helped their business. For example, the California Bar has a web page that help find the right lawyer.
Another great way to find a potential business attorney is to seek referrals from friends or family. Get referrals from people who work in your industry or specialize in the type of law your business requires.
Sit down with shortlisted attorneys and ask questions to determine the best fit
Once you have made a shortlist of attorneys, meet them and ask questions to determine their knowledge and experience and how they may help your business. Most business lawyers will offer free consultations to potential clients. Meet with them to see if they are a good fit for your company.
Ask questions about their skills and how they can help you meet your business objectives. You will be able to get a feel for the attorney’s knowledge and personality. This will be a long-term professional relationship, so you need to find someone you can work with.
Here are some questions you may ask a potential attorney to determine if they’re a good match.
What Experience Do You Have With Small Businesses
As a startup, working with a small business lawyer will be more cost-effective. If a lawyer usually works with Fortune 500 companies, then their rates will reflect that. They will also be used to clients with deep pockets, and their lawsuit defense strategies will mirror that. By working with an attorney who works with small businesses, you will receive more support and a more cost-effective representation. The potential attorneys will not be able to give names of past clients or details about their business, but they will be able to give you information about the approximate size of most of their clients.
What Experience Do You Have With XYZ Legal Issues
You should have a list of the main legal issues you want your business attorney to help with. If you require help with most legal aspects of your business, then it might be best to hire a generalist or an attorney that specializes in startups. A startup attorney will help you choose the structure for your business, file startup paperwork, and negotiate initial contracts.
If you are looking for a lawyer who specializes in a particular area, then you will need to ask about their experience dealing with issues you believe you will face.
Can You Refer Other Specialist Lawyers As I Require Them?
Business attorneys have a large network and will refer you to another lawyer if your problem falls outside of their area of expertise. You want to work with an attorney who will bring on specialists as the need arises. Ask potential attorneys where they stand on this.
Will You Have Other People Working On My Business Needs?
Attorneys will often work as a team with their paralegals, law clerks, and associates. They will often be working on a number of cases with a number of clients, and so you may be working with a number of people. This often works in your favor as having paralegals and clerks doing the admin will save you money, and your business will receive more attention than if you worked solely with the attorney. In your initial conversation, you can discuss if just the attorney will be working on your business needs or if their team will help too.
Do You Have Any Conflicts of Interest?
If the business lawyer works in a particular industry, they may have a conflict of interest if they work with a competitor. In the case of a dispute, they may not be able to represent you if they already represent the other party.
How Will You Communicate?
Find an attorney who will communicate in a method that works for you. Some attorneys prefer to meet their clients face-to-face, and others prefer email. Your attorney should work in a way that suits your needs. If you need your attorney to guide you through everything, then you may prefer a face-to-face meeting. If you are busy and prioritize efficiency, then email and phone calls may be sufficient. Ask questions that are important to you. If the attorney makes you feel unimportant or uncomfortable, then do not hire them.
Tell Me About Your Fee Structure
Find an attorney that fits your budget. Do not search for the cheapest as a higher rate often means a more experienced attorney.
Negotiate a fee structure
If you are a small business owner, then the cost is probably really important to you. Talk to your attorney about their per hour rates and get the agreement in writing. Business attorneys will work on one of the following fee structures:
Flat Fee
For certain kinds of work, an attorney might decide to charge a flat fee for the job instead of a per hour fee. A flat fee rate is beneficial as it helps you to budget better as you know the cost upfront. It reduces the chance of nasty surprises.
If you are working with the business attorney on a regular basis, then they may offer a package discount when setting the flat fee rate for basic services.
Contingent Fee
Business attorneys will often charge litigation matters on a contingency basis. This means that they will receive payment only after they win the case. Attorneys do this to reassure the client that they are motivated to win the case. Some attorneys avoid working on a contingency basis as it can be difficult to recoup costs if the lawyer s fired midway through the investigation.
Contingency fees are most commonly applied to cases where the attorney is litigating or looking to retrieve monetary compensation. The attorney’s fees will be paid as a percentage of the compensation.
Business Equity
In some cases, a business attorney will provide legal assistance in return for a portion of business equity. Small businesses have a high failure rate, so business attorneys often don’t offer this fee structure. If you have a good business concept, your attorney may consider a business equity fee structure.
Retainer Agreement
When you have a business attorney on retainer, this basically means you pay for them to set aside a specific number of hours each month. If the attorney completes more work than the monthly retainer covers, then the agreement will specify a flat fee for additional work.
A retainer fee structure will be suitable if you need to communicate with your attorney on a regular basis. It means you can call them to handle issues as they come up. Retainer clients receive prompt answers to their questions as they pay for the privilege. All other clients are at the mercy of the business attorney’s caseload as to when they will receive a response.
Know What Things Don’t Need an Attorney’s Help
Attorneys can help new businesses deal with a number of issues. However, relying heavily on your business attorney for everything can be very costly. Know what issues need an attorney’s assistance and what issues you can handle yourself with a little research.
These issues do not require the help of a business attorney:
- Picking a business name or domain name
- Writing a business plan
- Filing a tax return
- Balancing tax books
- Obtaining a business license
- Applying for a business loan
- Filing formation papers
- Hiring employees or independent contractors
- Setting up payroll
- Applying for an EIN
The above cases you will be able to handle on your own or with the assistance of a professional like a tax accountant.
You should only consult a business attorney for the above situations if they are particularly complex.
In Summary
Hiring an attorney from the outset will save your business a lot of money in the long run. By taking a proactive approach to your company’s legal protection, you can prevent a lot of legal issues from occurring in the first place.
Do your diligence in finding the right business attorney with communication processes and fee structures that work for you. To do this, meet with some attorneys and ask them questions that help you to determine suitability. If you need to meet with twenty until you find one you can have a long-term professional relationship with, then so be it. You are the client, and therefore you decide whether you want to start or continue working with a business attorney.
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