Hiring a lawyer is a novel thought for most entrepreneurs! An accountant and a business lawyer are the first two professionals you’ll need to recruit. The decision to hire the correct lawyer for your business is critical since your lawyer will assist you with practically every step of the process.
The motive for employing a company attorney, on the other hand, may not be so apparent. From fundamental zoning compliance and trademark guidance to formal business incorporation and lawsuits, a qualified business attorney can help you with practically every area of your firm.
Ideally, the first lawyer you employ will stick with you throughout the startup process, but not everyone gets it right the first time. It’s critical to pick an attorney you can trust, like, and afford.
Is it better to hire in-house or outside counsel?
It’s up to you that you need outside counsel (a law firm) or internal counsel for your startup (an employee of the startup). Typically, startups hire outside counsel at the outset, then hire an in-house counsel to help with company operations and regulatory issues while paying outside counsel for more specialized legal needs.
Types of Attorneys
Lawyers, like doctors, are getting more specialized. Someone who primarily handles wills, closings, and other “non-business” affairs are unlikely to be a good fit for your company. At the absolute least, you’ll require the talents listed below. The more abilities that a single person possesses, the better!
- Contracts: Contracts are a type of agreement. You’ll need a lawyer who can quickly grasp your business, draft standard form contracts with customers, clients, and suppliers, and assist you in responding to contracts that others want you to sign.
- Business establishments: You’ll need an attorney to assist you in deciding whether a corporation or a limited liability company (LLC) is the best method to structure your company and prepare the necessary paperwork.
- Taxes and licenses: Although your accountant will prepare and file your business tax returns each year, your lawyer should be familiar with registering your company. They also deal with federal and state tax identification numbers, as well as the tax implications that your company will engage in.
What should new business owners look for in a lawyer?
It’s wise to have many options when it comes to hiring a small business lawyer for legal advice. Meet with a few attorneys and choose one who is a good fit for your company and with whom you believe you will have a solid attorney-client relationship.
Make sure you conduct the necessary research. Examine the background and experience of possible candidates by visiting their LinkedIn pages and websites. Some things to keep an eye out for are:
- Is the lawyer an expert in business law? Check to see if the lawyer specializes in business law. Hiring a litigator or attorney unfamiliar with company law can be detrimental and even expensive in the long run.
- Is there any mention of business law, corporate law, transactional; fundraising; tax in the attorney’s bio? If they do, the attorney appears to be doing well so far. If they don’t and instead develop terminologies like litigation, insurance, or family law, it’s a good idea to look into alternative legal firms.
- Who are the clients of the lawyer? Seeing any potential clients listed on the attorney’s website via testimonials can help you figure out if the attorney works with businesses similar to yours.
Once you’ve compiled a list of potential attorneys, you should meet with each one for a one-on-one interview. Most of the attorneys do not charge for an initial consultation. And, just as you’re searching for an excellent attorney to deal with, they’re seeking good clients, so the interview will very certainly be reciprocal.
The following are some questions to consider:
- The cost is calculated on an hourly basis. The majority of lawyers bill on an hourly basis. Attempt to keep track of your expenses so that you are not astonished when you receive a large bill in the mail.
- There is a set charge. For minor projects like forming your company and preparing temporary contracts, good business lawyers charge flat costs. Flat costs are typically less expensive than hourly rates for the same project, saving you money.
- A monthly retainer fee is charged. Some law firms provide a monthly retainer option, which allows you to pay in advance for legal services you utilize throughout the month. This can help you have a peace of mind when you need to make a phone call because the time is already budgeted.
When working with a lawyer, what are the red signals that entrepreneurs should be aware of?
First, there’s a lawyer who doesn’t appear to understand your industry. It’s more difficult for someone to appropriately represent you if he doesn’t know how you operate.
Then there’s a lawyer who appears to be learning something on your dime. It’s unlikely that your lawyer will be able to accomplish it well or efficiently if you feel like you’re doing something entirely new for him.
Finally, a lawyer charges you an additional fee. All clients want cost-effective solutions, so knowing what something will cost and keeping surprises to a minimum is critical.
Experienced attorneys are not essential for every legal issue that arises in your business, but you should know where to look for it if you do. You may not realize you require legal assistance until it is too late, but it is always a good idea to plan and find someone who can assist you in being compliant with the law.