An attorney can be an invaluable member of your team, especially as you work through the complex challenges of startup.
But for many, it's challenging to figure out which kind of legal practice you need, and further, which attorney in that realm has the right skills and experience to support you through the process.
In this guide, you’ll learn how to find a great attorney and determine which tasks you should allocate to them—as well as which tasks you can take on yourself.
Who do I need?
Most business owners will need a small business attorney who can file incorporation documents and trademark applications, draft employment agreements, review essential contracts (including lease agreements), set up terms sheets for investors, and provide guidance through early taxation concerns.
How do I select the right one?
Your attorney will play an important role in helping you form your business and position it for growth.
Their role matters, so you need to be diligent in choosing one who's a good fit for your business. Start by locating multiple attorneys who have experience with startups and arrange a free in-person consultation.
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When you meet, ask about their experiences, strengths, and styles of communication. You can use the following questions to gauge their knowledge and expertise with small business issues:
- What is your experience with small business startups?
- Do you have experience filing incorporation documents and trademark applications?
- Do you have experience drafting employment and independent contractor agreements?
- Are you able to provide basic small business tax guidance?
Then, ask about their practice, availability, and style of communication. Here are some questions that can help:
- Who are the members of your legal team, and who will be handling my requests?
- Would you be able to refer me to another lawyer if an issue emerged that fell out of your realm of expertise?
- What are your typical turnaround times for creating the documents I’ll need to file to start my small business?
- What is your fee structure?
- Will you have any conflicts of interest in taking on my business?
- Will you be willing to communicate with me through my preferred medium (in-person meetings, phone calls, or emails)?
Pair what you learn with online reviews, verification of licensure, a review of the attorneys’ websites, and web searches to ensure you have enough information about your attorney candidates to make an informed selection.
What about payment?
Payment is a huge consideration, especially for new entrepreneurs looking to keep their initial costs low. Be sure to ask your attorney candidates about their preferred payment arrangement and whether they offer any of the following payment structures that could help you minimize or defer your legal costs:
Your attorney may offer a flat rate for drafting standard legal documents. This arrangement can help you budget the initial costs that are required to start your business.
Discounts for multiple services
Your attorney may offer you a reduced rate for committing to using the firm for all documents and negotiations that’ll be required to begin operations.
Your attorney may be open to receiving payment upon the approval of your incorporation documents or trademark requests rather than paying as services are provided.
Equity in the business
Your attorney may agree to accept equity in your business in exchange for the upfront and ongoing legal services he or she provides.
The attorney you choose may require an upfront payment or retainer. The retainer can be refunded if the value of the service provided is less than the retainer value, and you may be billed for additional costs that exceed the value of the retainer.
Are there other ways to save?
Another way to reduce your legal costs is to do some of the work yourself. Some tasks, such as obtaining a business license, filing business formation papers, or applying for an employer identification number, can be accomplished without an attorney’s help, while other tasks, such as drafting founder agreements, reviewing contracts, or setting up term sheets for investors, should be relegated to a legal professional.
You may also be able to reduce some of your legal costs by using a legal form site. LawDepot is one option that offers standard legal forms and services for a low monthly or per-item rate. However, many entrepreneurs prefer to work with a lawyer or legal team to ensure that their legal documents are filed completely, accurately, and without any oversights that could negatively impact the transaction.
Am I ready to get started?
Finding a great attorney is an important step. Next, you’ll need to find a highly qualified accountant to help you create the financial statements and forecasts you need to attain financing. Check out this article for includes must-read advice for selecting a knowledgeable professional:
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