A small business attorney plays an essential part in building your business and achieving success. They help new and nascent businesses avoid the legal pitfalls that inexperienced entrepreneurs may be faced with.
Even if you don’t need a small business attorney right away when you start your company, it’s worth looking into different local small business lawyers so that if you do, you’ll have someone (or a few) in mind.
In this article, we’ll show you how to hire a small business attorney.
Who Is A Small Business Attorney?
Uschamber.com defines a small business attorney as a legal professional that exclusively represents small businesses and their owners.
They assist young and growing companies in avoiding the legal hazards that novice business owners may encounter. Early on in the process, hiring a small business lawyer can assist you to avoid facing a lawsuit or getting into difficulty with the government for not filing the proper paperwork.
Why Do I Need A Small Business Attorney
If you run a small business, one of your biggest fears is probably getting sued. No matter how carefully you conduct business, hiring the wrong individual or a business deal gone wrong can come back to haunt you.
The best way to hedge your bets against legal problems in the future is to invest time and resources now in finding a small business attorney. A good business attorney is like a partner to your business and can see you through some of the most challenging times for your company.
The good news is that hiring a business attorney doesn’t have to break your budget, but it can help protect you from costly legal trouble down the road. All of this being said, the next line will discuss how to know when you need a business attorney, how to find and choose the best one, as well as explore top tips on conserving costs.
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What Can A Small Business Lawyer Do For You?
Corporate governance is a critical component of some businesses. Failure to do your due diligence in this area can result in serious legal consequences down the road. A small business lawyer can do the following to help new business owners avoid legal trouble:
- A small business lawyer can ensure that your company complies with the law, protecting you from future personal liability.
- They guide entrepreneurs through the process of sales or acquisitions, help draft letters of intent, draft contracts, verify trademarks, and go through contracts and agreements with buyers and sellers.
- Small business lawyers can also assist you in resolving disputes. If one of your former employees decides to sue you for any reason, such as discrimination, you may not be able to handle the case on your own. A small business lawyer can assist you in resolving such a situation.
- Additionally, they can help you distinguish protocols in advance to prevent future litigations from occurring or escalating.
- They can help you draft labor rules in advance to ensure that none of your employees face discrimination.
- They can also help set up proper sexual harassment prevention training to help avoid disastrous suits down the road.
- A small business lawyer can offer legal counsel and help you avoid common small business pitfalls that can eventually cost you money.
Where To look For A Small Business Attorney
Network referrals are one of the best methods to find a lawyer who is right for your small business. Ask other small business owners or coworkers in your network to refer you to a lawyer with whom they’ve previously worked or who they’re now working. Ask your connection when and how they worked with this lawyer to see if he or she is a good fit for your firm.
You can also find a small business attorney using online resources, such as social media sites like LinkedIn. While reading the evaluations on these sites may appear to be simple, be aware because they can contain phony sources.
Lastly, online services and directories can connect you to a local lawyer in your area based on your legal needs if your network doesn’t offer suggestions and you don’t trust online reviews.
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What To Consider When Choosing A Small Business Attorney
When selecting a small business attorney, consider why you require legal assistance. Perhaps you require the services of an employment and labor attorney after raising your employee count, or perhaps you are forming a business partnership and require the services of a contract lawyer.
When you’ve determined your business’s needs, here are a few questions to consider in your search:
- How many years have they been in practice?
- How often do they handle the issues you’re hiring them to deal with?
- Can I talk to existing clients with similar needs or business structure as me?
- What is the size of the law firm, and can it accommodate my needs? If it’s already big, would it have enough time to help me with my problems?
- What are their fees?
- Do they have financial arrangements that suit my business’s finances?
How To Hire A Small Business Attorney
It’s critical to assess your legal needs before selecting a small company lawyer. You should pick a lawyer whose experience and background align with your company’s objectives. You can also speak with a variety of lawyers to determine which one is best for your company.
Here’s the step by step process of hiring a small business attorney:
Step 1: Determine Why You Need a Small Business Lawyer
The best time to hire a business lawyer is before eventualities occur. That said, here are some common situations where small businesses should consider retaining a business attorney:
- Choosing a business entity: Your choice of business entity has an impact on your company’s potential to grow in the future. If you want to raise venture capital, for example, a C-corp is the ideal option. A small business lawyer can walk you through the advantages and disadvantages of various business formations and help you determine which is best for your firm.
- Raising money: When raising venture capital and selling equity to investors, it’s best to have a business attorney to help you draft term sheets and navigate securities laws.
- Drafting founder agreements: If you’re starting a business with partners, establishing each partner’s rights and responsibilities from the beginning will help you avoid future conflicts. Both partnership agreements and company bylaws can be drafted with the help of a small business lawyer.
- Contract review: Businesses grow by forming contracts with other companies or clients. An attorney can help you negotiate favorable contracts and ensure you understand all the fine print.
- Handling employment issues: As a business’s workforce grows larger, business attorneys often step in to help with labor law compliance and to resolve wrongful termination lawsuits.
- Obtaining IP protection: For businesses in the tech, health, or research sectors, obtaining a trademark or patent can be important to the business’s future. Business attorneys who specialize in IP, also called trademark lawyers, can help you protect your business’s creations.
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Step 2: Search for Small Business Attorneys Near You
Whether you decide to find a small business attorney before you need one or you’re looking for legal advice for a certain situation, there are a few best practices you can follow to find the lawyer that’s right for your business.
This being said, hiring a small business lawyer is, in some ways, similar to searching for a business lender, accountant, or your next employee. It’s wise to have multiple options to compare. We suggest meeting with a few different attorneys and then choosing the individual that’s the right fit for your business.
One of the best ways to source potential business attorneys near you is through your own personal or professional network. A recommendation from a trusted friend or family member, or from a business owner in the same industry can be very valuable, especially if they’re facing the same legal concerns as you are. You might also consider asking for a recommendation from a business professional you already work with—like your bookkeeper or accountant.
Step 3: Compare Small Business Attorneys by Asking the Right Questions
The next step after sourcing a handful of business attorneys is to meet with all of them. Most lawyers offer free half-hour or one-hour consultations to meet with potential clients. A consultation is a good way to see if a small business lawyer is a good fit without committing.
Step 4: Work out a Fee Arrangement With Your Business Attorney That Fits Your Budget
As a small business owner with a budget, fees are likely one of your top concerns when looking for a business attorney. Generally, hourly billing rates for business attorneys range anywhere from $150 per hour for a junior attorney in a small city to $1,000 or more per hour for a top attorney at a big-city law firm.
How Much Does It Cost To Hire An Attorney?
The most prevalent method of payment is hourly rates. As previously stated, you should request a preliminary estimate of how much time the lawyer will need for your job so that you can choose whether to sell your business to hire a business attorney
A business lawyer’s hourly cost might range from $100 per hour in a small town to more than $1,000 per hour for a senior partner at a large metropolis law firm. Given these fees, it’s no surprise that many small business owners want to know if they can get free legal counsel for their company.
Here are some of the budget-friendly fee arrangements business attorneys sometimes offer for small businesses:
1. Flat fee
Depending on the type of legal services you require, an attorney may charge you a flat fee rather than an hourly cost. This can save you a lot of money, especially on simple cases that attorneys handle on a daily basis.
A flat fee is when a lawyer charges a specific, total fee regardless of the nature and amount of work done.
Most lawyers will charge a flat one-time fee for routine matters such as forming a corporation or LLC, but will not volunteer a flat fee unless you specifically request one. Inquire whether the flat fee includes disbursements (out-of-pocket expenses incurred by the lawyer, such as filing fees and overnight courier charges) and when the flat fee is due.
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2. Hourly rate
When you have an hourly rate case, your lawyer will charge you for each hour (or portion of an hour) that they work on your case. For instance, if the lawyer’s hourly rate is $100 and the lawyer works 5 hours, the charge will be $500. Most small business attorneys don’t go with this fee structure.
Some lawyers charge different rates for different types of work, such as conducting legal research vs. appearing in court. Furthermore, fee scales for lawyers in large firms are typically different, with more senior members charging higher fees than young associates or paralegals. You can ask the lawyer to give you an estimate of how much time they will need to devote to your case.
3. Referral Fee
A lawyer who refers you to another attorney may request a percentage of the total fee you pay for the case. Unless the arrangement meets certain criteria, referral fees may be prohibited under applicable state codes of professional responsibility. The total fee, like other fees, must be reasonable, and you must agree to the terms. Additional information about the appropriateness of a referral fee may be available from your state or local bar association.
4. Retainer Fee
A retainer is when you pay the lawyer a set fee, usually based on the hourly rate of the lawyer. Consider a retainer to be a “down payment” against which future costs are billed. Typically, the law firm will place the retainer in a separate account and deduct the cost of services from that account as they accrue.
Many retainer fees are non-refundable unless the fee is deemed unreasonable by a court. A retainer fee may also imply that the lawyer will be “on-call” to handle your legal issues for a set period of time. Because this type of fee arrangement can mean a variety of things, make sure the lawyer thoroughly explains the retainer fee arrangement.
By retainer agreements, we mean an agreement where you pay your attorney in advance for work that may come up today or sometime in the future.
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5. Statutory Fee
The fees in some cases are set by statute, or a court may set and approve a fee that you pay. These types of fees may appear in probate, bankruptcy, or other proceedings.
With all types of fee arrangements, you should ask the lawyer what costs and other expenses are covered in the fee. Does the fee include the lawyer’s overhead and costs, or do they charge those separately? How will they charge for costs like staff, such as secretaries, messengers, or paralegals?
Can A Small Business Attorney Consult For Free
If you’re looking to get free legal advice on situations you encounter running your business, here are a few ways to get a small business attorney service for free:
1. Federal Trade Commission
The Federal Trade Commission’s (FTC) website has a Tips & Advice section with a Business Center subsection that contains documents, blog posts, and reports about various aspects of running a small business, such as advertising and marketing, credit and finance, and privacy and security.
2. Small Business Administration
If you have a simple question and are unable to schedule a free consultation with a business lawyer, the Legal Compliance section of the Small Business Administration (SBA) website can provide business legal advice. It contains information and documentation on internal record-keeping, state and federal tax filing, and the acquisition and maintenance of business licenses and permits.
3. Take advantage of free consultations
Many attorneys usually offer free initial consultations to meet their state bar’s requirements on pro bono hours. This consultation offers you an opportunity to ask initial questions and to discover if the lawyer is a good fit for you and your business.
4. Join ‘Ask a Lawyer Community’
Like booking a business lawyer for a free consultation, “ask a lawyer” communities comprises of licensed attorneys who answer questions on business-related topics. You can check out the following sites for free legal advice:
Attorneys who respond to your questions may offer general small business legal advice that will point you in the right direction — and help you avoid legal trouble.
FAQs On Small Business Attorney
Who is a small business attorney?
A small business attorney is a legal professional that exclusively represents small businesses and their owners.
Why do I need a small business attorney?
A good business attorney is like a partner to your business and can see you through some of the most challenging times for your company.
Can a small business attorney consult for free?
Many attorneys offer free initial consultations to satisfy their state bar’s requirements on pro bono hours.
What can a small business lawyer do for you?
A small business lawyer can ensure your company follows the law properly, relieving you of possible personal liability in the future.
