I’ve had many questions come across my desk as to why and how a person or a company with a small budget should choose a lawyer. Well, lucky for you, I’m here to answer those questions and lay out the considerations you should be taking into account when hiring a lawyer.
1. What is the Purpose of Having a Lawyer on Retainer as a Business Owner?
There are many purposes to having a lawyer on retainer as a business owner. In a complex legal world, you’ll need a highly trained professional who has navigated those murky legal waters before and lead you as a business owner in the right direction. There are a few categories that you should look for when retaining a lawyer for a new business—
(1) Business and Entity Formation. This really requires a lawyer to work hand-in-hand with the start-up owner to understand where the company is currently, where they plan to be in the near-term future, and even where they plan to be in the long term. From this, the lawyer should be able to set-up the correct legal entities that best fit the owners plans for their business. This considers several things—how many owners and employees the company envisions, how owners want and should limit their liability, where the owners eventually see their exit happening, and even consult with the company and its operators as to how they should form their business relations with their intended business partners.
(2) Contract Drafting. This is really a subset of the first category, but owners should be wary of the provisions in operating agreements, employment agreements, and other general business agreements they are entering and how they will impact the business going forward. Generally, every business needs personally tailored sets of contracts—this takes an attorney who really understands all of the aspects of the business and will implement these agreements to best position the owner and the company. Also, this is a ongoing relationship—throughout the life of the business, there will undoubtedly be new agreements that neither the attorney nor the owner of the business can foresee from the outset.
(3) Regulatory Consulting and Compliance. This is a big one—all businesses should aim to be run legally. However, not all companies or their owners understand the regulatory requirements applicable to them. When you think about it, these regulations vary on the federal, state, and local levels—that means you as the owner must understand and correctly implement three layers of regulations. This is no easy task, and an attorney who has worked in the specific industry should be consulted to help the owner and the company navigate these requirements to make sure that the business is, and stays in, compliance with all applicable laws.
2. Who to Choose on a Small Budget: Signing up for a Large-Scale Legal Firms and Groups or Choose a Boutique Firm and/or a Solo Practitioner?
Well, in a lawyerly fashion, the best answer for this question is “it depends”. Generally, most people get what they pay for in legal services, but this is not always the case. Large or national law firms such as Legal Shield, Rutan & Tucker, Greenberg Traurig (just to name a few) run at very high fees—partners’ time generally starts around $1,000 an hour, with their low-level associates charging you around $500 an hour. As you can see, this is not really a viable option for small businesses who don’t have that type of capital to burn. On the other end of the spectrum, there are tons of solo practicing attorneys or smaller legal groups who are just as capable of handling your legal issues all at a more reasonable price. These types of groups will typically run you from $150 per hour for low level associates to about $500 an hour for the high-level partner’s time. Well, what’s the issue here? Generally, these solo practitioners and smaller legal groups are highly specialized and can only service a niche set of needs. In this case, it requires more work on the part of the companies and their operators to source different solo practitioners and small legal groups to work on different problems that are right up their alley of expertise.
3. What Type of Pricing Can You Expect?
I kind of alluded to this in the prior question, but you can see fees running from $150 and hour for low level associates for small law firms and solo practitioners to in excess of $1,000 an hour for high level partners who work for national or global scale law firms. Obviously, even these prices can vary on a firm by firm basis, but some group will run as low as $75 an hour for work performed by their paralegals, bookkeepers, and other administrative personnel within the firm.
4. What Should You Expect in Your First Meeting?
Come ready to the table. Don’t show up empty handed without a good idea of what your legal problem is and how you want the lawyer or firm to handle it. This will help save your time in finding the right lawyer and will help save you money if the lawyer or firm charges an upfront fee for a first-time consultation.
That’s right, a lot of attorneys and firms out there will charge for your first-time consultation, but this is generally reserved for hot-shot attorneys and law firms. What is more common is a free first-time consultation, but just because its “free” doesn’t mean you’re getting off without incurring anything. You need to be prepared and understand your legal problems when walking into this meeting so you can best convey your legal issue and determine if the lawyer or firm you are meeting with can really handle your problem.
Looking for a free consultation? Feel free to contact Alton via any of the methods listed here.