It is usually confusing and daunting to select a lawyer, especially for your startup. That said, it is a crucial part of starting your own business. What you need is the right legal expertise on your side – one who can help you deal with the legal ducks as you get busy settling down to business. He/she will be responsible to safeguard your interest; you should therefore be sure of your lawyer’s credential. Besides, there are several other factors that you need to consider when selecting the best lawyer for your startup.
The following are four tips to help you find the right business entity formation and incorporation attorney:
1. Look for the Right Fit
You will be sharing a lot of confidential information and data with your lawyer. Therefore, he/she must be someone whom you trust completely. In addition, it is important that you get along with your lawyer, as well as enjoy working with him/her, since you need to make a lot of decisions together. Your lawyer, too, must have an interest in you and your business so that he/she can relate to you. In short, your attorney must be a good fit for your startup.
The person must be competent, experienced in your particular domain, and responsive enough to come up with prompt solutions whenever you need legal help. However, the most important thing to consider here is the lawyer’s experience in your particular industry, as different industries have different legal requirements and considerations.
Another thing that you need to consider is the lawyer’s seniority level. He/she must be the right fit for any given task. Hiring a senior partner just to prepare your startup’s incorporation documents hardly makes any sense; similarly, you don’t want to hire a third-year lawyer to deal with your venture capitalists.
2. The Lawyer Must Identify With Your Business Vision
As a small business owner, you would probably like to hire people who share a similar vision for your startup. It must be the same when hiring a lawyer for your startup. Spend time researching lawyers with interest and expertise in your business space.
Your lawyer must identify clearly with your business vision. Startups and small businesses are different from larger enterprises in many ways, including their legal requirements. It is essential that your lawyer understands and identifies the startup culture. A solo practitioner, for example, will be a better choice than someone working with a larger firm, as he/she is more likely to realize your plight as a startup business owner. In fact, a solo practitioner will be more cost-effective, compared to a business attorney working in a large law firm.
That said, hiring a larger law firm has a number of advantages over solo practitioners, as the former is generally better equipped to deal with lawsuits, patent/trademark filings, deal negotiations, drafts of software license agreements, creation of employee policies, and so on. Better yet, such firms usually have specialized lawyers to take care of various legal aspects of your startup.
A better choice is a solo practitioner who has the experience of working with a large law firm with complex cases and big clients. This ensures that your lawyer will be bringing his/her big firm experience to your startup business.
3. Speak Candidly
Irrespective of the type of law firm/attorney you want to hire for your startup, make sure that you speak to him/her candidly, explaining the nature of your business and what you expect in details. Do this during your initial consultation. Typically, lawyers don’t charge for the initial consultation. But even if no money is exchanged, the legal advice that you would seek during this consultation will be protected by means of the attorney-client privilege. You should therefore speak freely with the lawyer you are seeking legal advice from, extensively discussing all of the support and help that you would require.
In case, you aren’t sure about the extent of support you would need, your lawyers can also advise you on the same. Opt for a lawyer who can counsel and guide you through all the legal decision-making processes that you are likely to face in the coming days. For example, you might need to decide if you need trademarks or copyrights to safeguard your intellectual property.
Your lawyer will also be responsible for explaining the pros and cons of each legal decision you take, so make it a point to ask as many questions as you may have. Listen closely to him or her, so that you have a clear understanding of your lawyer’s expertise, as well as the consequences of the choices that you are likely to make.
4. Understand How Much It Is Going to Cost You
Most lawyers have a pre-defined hourly rate. A startup lawyer is most likely to charge you anything ranging between $350 and $800 an hour, although the amount may vary depending on the type of law firm that you are approaching. In general, the larger law firms are going to charge higher hourly rates, as they have greater overhead cost. But, such firms often provide increments – that will likely save you a good amount of cash.
Again, the fee may vary depending on the seniority level of your lawyer, the type of the firm, and your location. For example, the cost of a junior startup attorney or a solo practitioner from a smaller city will be significantly lower than a senior partner of a big firm in some major cities. However, a junior lawyer can hardly conjure the expertise and experience that senior partners can bring into your startup. You will be paying for their deep expertise and experience in dealing complex legal matters.
The good news is there are other options available these days. These range from fixed fees for certain common situations, such as filing a trademark or incorporation to deferred fees. Some lawyers also accept payments in equity instead of charging cash. However, be careful about this payment option, as giving away too much equity to your lawyer might have a bad impression on your investors.
As a new entrepreneur, you are likely to be overwhelmed with a lot of things when setting up your startup. Thinking about the legal aspects is something that you should leave on the experts, as doing otherwise will only make you vulnerable to unnecessary business risk. Besides, this will make it more difficult for you to take the business to the next level. So, even if obtaining legal advice means incorporating added costs, don’t shy away from hiring the best attorney for your startup.
Michael Dyson is a freelance content writer, who has years of experience in providing unique and high-quality content for the law industry. He has been writing for Richard G. Burt law firm, based in California. They have decades of experience in handling business and real estate cases.