Thanks for visiting DelanceyStreet.com! In this article, our goal is to help you get educated about the following issues:
- Determining why you need a business law firm
- How to find business attorneys
- How to compare business attorneys
- How to work our a fee arrangement with the business attorney
- Know when it’s ok to skip hiring a small business lawyer
If you’re running a small business, one of your biggest fears is getting sued. No matter how you do business, hiring the wrong person can haunt you. The same goes for a business deal which goes wrong.
The best way to prevent future legal problems is to find a small business attorney. The right business attorney is like a partner for your business, and can help you get through tough times. In addition, they can be a great resource for any legal issues or questions you have. Every year, there are almost 20 million civil cases filed. More than half of those cases are contract disputes, or employment disputes. Defending lawsuits can be expensive, and sometimes it can be so expensive – it cripples your business.
The good news is, hiring a business lawyer can help you prevent this. Let’s discuss when you might need a business attorney, how to find one, as well as tips on how to save on costs.
Step 1: Determine why you need a business lawyer
The best time to hire an attorney, is before you even need him, or her. Here are some common situations where startups, and business owners, hire a business lawyer:
- Choosing your business entity: The type of business you are impacts your ability to grow. For example, if you plan on raising venture capital, then a C corp is best. Small business lawyers can walk you through the pros and cons of different business entities.
- Raising money: When raising VC, it’s wise to have a business attorney to help you draft term sheets, etc.
- Drafting agreements: If you’re going to work with partners, then it’s important to outline rights and responsibilities from the start. Hiring a small business lawyer can help with this.
- Handling employment issues: As your workforce grows, it’s important to hire a business attorney to help with labor law compliance.
Step 2: Find business lawyers
Finding a business attorney is difficult. Below are some ways to find an attorney near you:
Step 3: Compare business lawyers by asking them questions
After you find a bunch of business attorneys who are promising, it’s important to ask them the right questions. Most business lawyers offer a risk free consultation. Below are examples of questions you should ask prospective attorneys:
- what experience do you have working with small business owners
- what experience do you have with my legal issue
- can you refer me to other past clients you’ve helped
- will you, or someone else, be working on my business issues
- are there any conflicts of interest with my business?
- how will you communicate with me
- what’s your fee structure?
Step 4: Work out a fee arrangement with the business attorney
There are a few different fee structures. Fees are likely one of the top concerns you have when hiring a business attorney. Generally, hourly billing rates for business attorneys range from $150 per hour, to $1000 per hour or more. It’s important to get all the details of your fee agreement in writing.
Flat Fee: Depending on the type of legal work you need help with, an attorney might charge a flat fee versus hourly. This can save you a lot of money.
Contingency Fee: If your case involves litigation, then a business attorney might insist on a contingency fee. This is when the attorney gets paid only if they win your case. There are multiple reasons why an attorney might avoid this arrangement. For example, an attorney whose fired halfway through the case by the client might find it difficult to get compensation if there’s a fee arrangement in place.
Equity in the business: This is another thing business attorneys might do. They will take equity in the business in exchange for providing help.
When can you skip hiring a small business lawyer
In most cases, if you think you need an attorney – you’re probably right. Business lawyers can provide guidance on a range of issues. For example, if you’re looking for a small business loan – it might be good to have an attorney look over your agreement. Below are tasks where you don’t really need the help of a business attorney:
- Business plans
- Registering a domain name for the business
- Getting a business license
- Applying for a business loan
Business lawyers can be expensive. If you can handle the task on your own easily online, it’s smarter to DIY.