Find a small business lawyer by leveraging professional networks, legal directories, and online resources to compare expertise and pricing. Ask key questions about experience, fees, and communication to ensure the right legal fit for your business.
By Brad Nakase, Attorney
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Getting sued is likely to be a major worry for small business owners. A misstep in hiring or a botched business transaction can derail even the most meticulously planned company.
Investing in a small business attorney now is the surest way to protect your company from potential legal issues down the road. When times get tough for your company, a solid business attorney can be there for you like a trusted partner. In addition, they are a good go-to for any legal advice you might need, whether it’s for drafting agreements, securing funding, or dealing with problems related to employment (including litigation).
In fact, every year, Americans file around 20 million civil cases. Of these, over 50% involve disputes pertaining to contracts or employment, and the majority of these cases involve businesses directly. A small business could go bankrupt trying to defend itself from a lawsuit that costs several thousand dollars.
Fortunately, you can avoid expensive legal problems in the future by employing a business attorney, and doing so need not break your budget. Now that we’ve covered the basics, let’s dive into when you need a business lawyer, how to search for and choose the right one, and some top tips for saving money.
Preparation is key when it comes to hiring a business lawyer. Having said that, the following are some examples of typical circumstances in which new businesses and the owners of small businesses should consider hiring a business attorney:
These are just some of the more typical problems that can arise; occasionally, things that occurred before you even started the business can end up hurting you. Hence, it’s a good idea to research various local small business lawyers even if you don’t think you’ll need one when you launch your company. That way, you’ll have someone (or several) in mind when the time comes.
However, while some business lawyers specialize in a particular field, others are “generalists” and can assist you with a wide variety of legal issues. There are benefits and drawbacks to each of these choices (which we’ll get into later on), and the type of small business lawyer your company requires will depend on its unique circumstances.
Whether you’re seeking legal counsel for a specific issue or have already decided to find a small business attorney in advance, there are certain best practices to follow in order to select the most suitable lawyer for your company.
However, finding a small business lawyer is like looking for a business lender, accountant, or even a new employee. Having a variety of options to compare is a smart move. We advise you to meet with multiple lawyers before deciding on the one who best suits your company’s needs.
Your personal and professional networks are a great place to start when looking for local business attorneys. When dealing with similar legal issues, it can be helpful to get a recommendation from someone you trust, such as a family member, close friend, or fellow business owner in your industry. Another option is to get a recommendation from someone you currently work with in your company, such as your accountant or bookkeeper.
You might also look for local business attorneys in internet directories. Many state bar associations keep an accurate and searchable database of local licensed attorneys. Also, both Best Lawyers and U.S. News & World Report have curated lists of attorneys, but these lawyers usually represent high-priced corporations.
However, if you are looking for a business attorney, you might discover that legal assistance sites such as LegalZoom, Avvo, and Rocket Lawyer are especially helpful. You can find reviews of attorneys on these sites, in addition to a larger pool of available attorneys. Be careful not to put too much weight into online reviews, even though you should do your homework to verify the legitimacy of any small business lawyer you come across. There is frequently no background information regarding the client’s legal problem, and not all of these sites demand that reviews originate from verified clients.
As a result, you shouldn’t just rely on reviews when choosing a business attorney; you should also conduct additional research to make sure the lawyer is legitimate in your state, look them up on LinkedIn (if applicable), and see what other relevant information comes up in a Google search.
Once you have a shortlist of potential business attorneys, the following step is to schedule meetings with each one. In order to meet with prospective clients, the majority of lawyers provide free consultations lasting half an hour or an hour. If you are looking for a lawyer to represent your small business, a consultation is a great way to get to know them before you commit.
Make an effort to schedule an in-person consultation whenever you can. The lawyer’s willingness to meet with you in person shows that they value client relationships and are committed to getting to know you. To top it all off, getting to know a prospective attorney’s personality in person is the best way to gauge whether you two would mesh well as a team.
In order to choose the most suitable business attorney for your company, you can inquire about the following during the consultation:
1. Have you worked with small businesses before?
From a financial perspective, it is important that a business attorney have expertise representing small companies. The hourly rate of a lawyer who typically represents Fortune 500 companies will likely reflect that. Furthermore, they may favor expensive litigation over less expensive forms of dispute resolution.
A lawyer may be unable to give you specific information about their previous clients due to confidentiality concerns, but they should be able to tell you something like, “My clientele consists of 25% companies with fewer than twenty employees.”
2. In the past, have you dealt with cases similar to the one I have?
Asking a small business lawyer about their level of expertise in your specific legal matter should be your next step. Hiring a business attorney that specializes in your particular area of need is usually the best course of action. On the other hand, a generalist lawyer may be the best choice if you are facing numerous challenges while launching your business.
To give just a few examples, a startup lawyer can advise you on the optimal business structure, draft investor term sheets, and guide you through the first contract negotiations. Actually, you might end up saving both time and money if you hire a lawyer for more than one service. If, on the other hand, you need a business attorney for a specific reason, like handling litigation, you should make sure that they have experience in that area.
3. Can you suggest any other lawyers who specialize in representing small businesses?
If you need assistance with a matter that is outside of your business lawyer’s area of expertise, they should be able to recommend you to another small business lawyer in their extensive network. Not wanting to lose business, the poorer lawyers will refrain from making referrals. Get the lowdown from your lawyer on where they stand on this. In the end, most companies will require assistance with a variety of legal matters.
4. Will you be working with anyone else on the problems my business is having?
A legal team often consists of an attorney, their associates, paralegals, and law clerks. Because of their busy schedules, lawyers frequently delegate tasks to lower-level employees. Having more than one person involved can help your small business case, even though you may prefer to have your lawyer handle everything.
5. Are you biased against my company in any way?
If a business attorney has close relationships with numerous local businesses, this is a crucial question to ask. Take the hypothetical situation of a disagreement over a contract with a nearby vendor as an example. You should be wary of hiring a small business lawyer who has a conflict of interest if they have represented that supplier in the past, even in a separate case.
6. In what way are you going to contact me?
Every legal professional has their own preferred method of communication. For some more traditional lawyers, the best ways to get their questions answered are in person or over the phone. While some people still prefer snail mail, others have found success with e-signature software. You should ensure that your lawyer is aware of your busy schedule as a small business owner and that you have a method to communicate any urgent matters to them.
7. How do you charge for your services?
When interviewing lawyers for your small business, this is likely to rank high among your most important questions. It’s important to remember that cheaper doesn’t always mean better. In fact, the inverse is often true: more seasoned and successful attorneys tend to charge more. Be that as it may, budgets are a necessity for startups. In the section that follows, we will discuss fees in greater depth.
Finding a business attorney on a tight budget is probably one of your primary concerns as a small company owner. It is crucial to acquire a written agreement outlining all the details of your fee arrangement so that you are aware of the precise amount you will be paying for your small business lawyer’s services. Typically, business attorneys charge hourly rates ranging from $150 for a junior attorney in a small city to $1,000 or even more for a top lawyer at a large city law firm.
Having said that, business attorneys occasionally provide small businesses with budget-friendly fee arrangements, such as:
1. Flat Fee
A lawyer may charge a flat rate rather than by the hour, depending on the nature of your legal matter. Particularly for simple cases that lawyers often handle, this can end up saving you a ton of money. In addition, some attorneys may provide discounts or a “package deal” if you hire them for multiple services at once. This is a common practice among small business lawyers who want to keep their clients happy so they may return in the future.
2. Contingent Fee
Your business lawyer may be willing to negotiate a contingent fee if your case turns out to be litigious. In a contingent fee arrangement, the attorney’s compensation is contingent upon the outcome of your case. But there are a lot of ethical issues that might make a lawyer wary of a contingent fee arrangement. For example, if a contingent fee arrangement is in place, it might be difficult for an attorney to recover compensation in the event that their client fires them in the middle of a case.
3. Equity in Business
In exchange for their legal services, business attorneys may ask for ownership stakes in their clients’ companies. Due to the high failure rate of small businesses, this situation is extremely unusual and comes with no assurance of payment to the lawyer. However, if your startup is expanding quickly, you may be able to work this out with a small business lawyer.
4. Retainer Agreement
Businesses that anticipate a high volume of legal matters may benefit from maintaining the services of a business lawyer on retainer. With a retained attorney, your company has someone “on-call” to handle any legal issues that may arise. When you work with an attorney on retainer, you usually pay a flat rate per month for a set amount of hours that the attorney will devote to your case. Any work that goes on beyond that time frame will incur a flat fee or an hourly rate.
The most important thing about hiring a lawyer for your company is being able to head off legal problems before they hurt your company.
No matter what kind of pricing structure you end up deciding on, it’s important that it’s well-defined, documented, and reasonable for your small business.
Generally speaking, you’re likely correct in thinking you need legal counsel. A growing small business can benefit from the advice of a business attorney on many matters. However, legal fees can build up rapidly; one way to keep costs in check is to be aware of when you should and should not seek legal counsel.
A business attorney is usually unnecessary for the following kinds of work:
These duties should be manageable for the most part; however, if you require assistance with, say, bookkeeping, you can always consult with a business expert who is not necessarily an attorney.
Having said that, a business attorney’s help may be necessary in a complex matter. For example, it could be wise to hire a lawyer to help you with the business license application process if the city where your company is located has complex zoning laws or has recently rezoned.
Concerned that you may need the services of a business lawyer? Legal aid websites can be a good resource, as we mentioned before. Sites like Rocket Lawyer and LegalZoom, which offer consumer assistance, may already be familiar to you. For small businesses on a tighter budget, these sites also provide legal representation, typically for a flat rate.
As an example, LegalZoom offers business incorporation services for less than $150. Common legal forms are also available on these websites. There is often a “attorney on-call” option as well. For about $30 a month, users of LegalZoom can speak with attorneys over the phone about matters ranging from trademark law to contract law.
But there are a few things you should be careful of when using legal aid websites. To start, there’s a chance that some of the forms aren’t up-to-date or that you’re paying to use one that’s freely available on a public website. Beyond that, there’s a chance that generic versions will be invalid in legal proceedings. So, if you want to know the rules that apply to your field or state, but aren’t sure, it’s wise to hire a small business lawyer.
You will save money and time in the long run if you hire a business lawyer. Successful entrepreneurs know the importance of getting counsel in advance of any legal issues that may arise.
Like we said before, there are a lot of places to look for qualified attorneys to represent small businesses, and the vast majority of them will be willing to work out a payment plan that is reasonable for you. So, whether you get a referral, use a legal directory, or visit a legal aid website to locate a lawyer, it’s important to have an honest discussion with them to ensure they’re a good match for your company.
Also, keep in mind that you are the client in the relationship between your small business and the lawyer. Feel free to consult with as many lawyers as you need to find the one who best suits your company’s needs. And if you’re ever unhappy with your chosen business lawyer, you can always end the relationship and begin the search again.
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