If you are in business for yourself, chances are you will need a business attorney sooner or later. Choosing the right attorney is the biggest question because for most of us, we donít know the difference between a good attorney and a bad attorney. Picking the wrong attorney can lead to legal mistakes and cost you a fortune. Unfortunately, having a license to practice law doesn't necessarily mean that the attorney is qualified or even that they aren't a complete hack.
When choosing an attorney for any purpose, you should know that just like in medicine, there are generalists and there are specialists. Even attorneys that specialize in a given area can be generalists or specialists within that given area of law.
Business attorneys practice business law, which is different than family law, real estate law, tax law, patent law, or criminal law. But a business attorney may specialize even further into areas such as incorporation, employment law, product liability, healthcare law, and so on. There are literally hundreds of subgroups and it takes a bit of knowledge to know which direction to go.
For instance, when selling a small business, it can be a good idea to work with someone who is more of a generalist in business law than it is to work with someone who only does corporate mergers. The later is highly specialized and will almost certainly cost you more for the same amount of work. On the other hand when incorporating, you should consider a basic incorporation attorney because itís a fairly limited area of law, relatively simple, and thereís not a lot of time or expense involved for most cases. In this instance, a specialist could actually be cheaper.
A small business generalist attorney can help you define the structure of your business, write or review your standard client contracts and waivers, and generally make sure that you stay out of minor legal scrapes.
Few things make a cash-poor business owner more nervous than hiring a lawyer. So do your homework ahead of time. Understand the advantages and disadvantages of large vs. small firms.
Large firms have specialized expertise that can become critical as you grow. Small firms can offer a more personal touch and can be more efficient. Most entrepreneurs need something in between. Understand your needs (e.g., contract law, employment law, etc.) and make sure they have an expert that can address your needs as these issues arise.
Additional considerations in choosing an attorney
Get at least three referrals from people you trust. Your best source is other entrepreneurs. Interview each firm carefully. Think about things such as:
Here are some questions to ask a prospective business attorney before you hire one:
Do you have time for my business?
This might seem like an odd question, but a business attorney that is trying to stack client on top of client might not be there when you need him. No attorney is going to divulge how many clients he has and few will tell you that they donít have time for you. You are pretty much going to have to use your intuition on this one.
Do you typically work with small businesses and what do you do for them?
Small businesses and large businesses have different needs. A lawyer who is used to handling million dollar cases may not be as likely to consider your measly little $25,000 case to be worth investing any real time in. It's a different world.
What are your charges?
You should have a good idea of what you want the attorney to do for you. Find out if they have flat rates for each service or if they charge by the hour. Donít be afraid to ask for an estimate. If an attorney gets a bit flaky talking about prices, go elsewhere.
Do you work on retainer?
A retainer means that you pay the lawyer a certain amount of money each month and in return, they handle routine legal matters for you. In the beginning, this probably doesnít make much sense, but as you grow, it can save you money. When lawyers take retainers, they often give discounted hourly prices.
Can you provide me with references?
Any experienced attorney will be able to provide these. Ask the provided references about how the attorney is to work with, if he listen to the client, if they are satisfied with his billing practices, his communication skills, and anything else that may be important to you.
Listen to your gut feeling as to whether or not you could work with this person. If you donít feel comfortable, move on. There are enough choices in the world.
Use your attorney appropriately
Finally, donít just dump all of your problems on your attorney. The best clients ask about strategy and help make decisions. They donít ask the attorney to do everything for them. The best attorneys however, let clients do the things they can do and they involve them in the decision making process.Finally, an attorney who will not listen is a complete waste of time and should be avoided at all costs. They are expensive, and most people will not be pleased with the results. Arrogant attorneys ironically often have a minimal understanding of the issues involved because they already believe they know it all and they donít wish to be corrected. Their mistakes are costly, but only to their clients.