An entrepreneur should consider his or her legal needs early in the business development process. These needs can vary greatly, from occasional consultation to providing a sounding board for both business and legal issues. A good attorney can improve the bottom line by providing good advice and helping the entrepreneur avoid unforeseen liabilities. However, retaining an attorney can be expensive.
Legal Needs Most start-ups will need attorneys. As the business grows, the entrepreneur will face issues related to real estate, employment, intellectual property, tax, and securities law. These issues may be best left for an attorney to address so the entrepreneur can focus on running the business.
While quite a few self-help legal guides and pre-printed forms exist, an entrepreneur should not rely on these materials exclusively. The law can be complicated, and mistakes can be costly. Additionally, an attorney is useful to point out potential problems that an entrepreneur may not anticipate.
As with any business decision, entrepreneurs must weigh the time and cost of selecting and hiring an attorney against the benefits of the legal advice and other services an attorney provides.
Choosing an Attorney Like selecting a doctor, finding the right attorney is not as simple as looking in the phone book. While a state-licensed attorney can legally fulfill an entrepreneur's legal requirements, only a small fraction will have the expertise and experience to meet the entrepreneur's legal needs. The entrepreneur should consider whether it would be better to work with a small or large firm, and research some attorneys identified by referrals.
Size of Firm Large and small firms typically differ in the range of areas they practice and their costs and billing procedures. Large firms usually have several groups of attorneys practicing in specific areas of the law. Attorneys in large firms will have access to many specialists who can provide the entrepreneur with access to a large amount of knowledge. Large firms may also have attorneys who specialize in representing start-up companies, and the breadth of knowledge required by an entrepreneur. Smaller firms typically have attorneys with a greater breadth of knowledge or specialize in a specific area, like patents. However, at the start an entrepreneur may want to focus on hiring an attorney to handle immediate concerns quickly and efficiently.
Large and small firms differ in their costs and billing structures. Larger firms tend to have higher hourly rates, but may be more willing to defer payment and provide more efficient service because of their specialization in certain areas. They are more likely to have lower-paid assistants and associate attorneys to perform routine tasks at a lower rate.
Referrals Referral services and legal directories are numerous, but these services are insufficient for making a good decision on an attorney. Choosing the right attorney is a very personal decision, while these methods are very impersonal and untested. The best attorney is determined by the entrepreneur's own business sophistication, personality, and skills. Asking friends, coworkers, and other entrepreneurs who have used a law firm for similar needs is one of the better sources for a good lead. Other entrepreneurs in a similar industry will also provide some perspective on how to evaluate legal needs and prospective attorneys, and how to work with them.
Local community groups and universities may also provide good leads. Attorneys who specialize in helping start-ups often attend local entrepreneur conventions and meetings. Local colleges offering entrepreneurship classes often feature attorneys as guest speakers.
Additional sources of good leads include local bar associations, chambers of commerce, and accountants.
Making the Choice There is no single way to find a lawyer that is right for you and your case. One way to start the process is to call several lawyers to whom you have been referred. Some lawyers offer free consultations; you may be able to set up an initial consultation on the telephone. This helps you get an initial feel for the lawyer. The lawyer, in turn, will likely have a few questions for you, to help the lawyer identify potential conflicts with an existing matter or client. It also helps the lawyer gauge whether he or she is competent to handle your matter.
You may be able to ask each lawyer some preliminary questions before you commit yourself to a formal, in-person interview. Ideally, the answers you get will help you screen out a few lawyers to interview. To help you choose a lawyer, it might also be a good idea to write down any answers you get. You can compare the answers to help you choose one or more lawyers to interview.
After your interviews, review your notes and examine the strengths and weaknesses of each lawyer. No single factor will decide which lawyer to hire; you will need to weigh a number of factors to determine which lawyer is the "best fit" for you. Some factors to consider include:
Availability: Can the lawyer accept the case immediately? Will other lawyers work on the case also? Who will do most of the work?
Comfort: Do you feel comfortable with the lawyer? Do you trust the lawyer to discuss private matters? Does the lawyer listen to you?
Cost: Do you feel comfortable and knowledgeable about the financial arrangement? Will the lawyer keep you up to date on the progress and costs?
Experience: Does the lawyer have the necessary experience for your case?
Skills: Does the lawyer know your industry and have connections to investors and venture capital?
In the end, you will have to decide which of these or other factors are the most important to you.
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