Every Small Business Needs an Attorney. Here’s Why.

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Katie Fleming

Co-founder and COO of Owner Actions

A startup lawyer meets with a small business owner.

An startup lawyer can be an invaluable member of your team, especially as you work through the complex parts of starting your business, expanding your operations, fulfilling contractual obligations, and, one day, selling your business to a new owner.

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 startup lawyer and determine which tasks you should allocate to them—as well as which tasks you can take on yourself.


Who do I need?

Most owners need a small business attorney or startup lawyer who can take on these tasks:

  • File incorporation documents and trademark applications
  • Draft employment agreements
  • Review essential contracts (including lease agreements)
  • Set up terms sheets for investors
  • Provide guidance through tax concerns


How do I select the right startup lawyer?

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 businesses like yours and arrange an in-person consultation.

Would you like us to help you find a great attorney? Check out these options:

Many startup lawyers offer free in-person consultations. Be sure to ask for this consultation before agreeing to any legal services.

When you meet, ask about their experiences, strengths, and styles of communication. You can use these 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 tax guidance?


Then, ask about their practice, availability, and style of communication. Here are some questions that can help:

  •  Which members of your legal team will be handling my requests?
  • Could you refer me to another lawyer if an issue fell out of your realm of expertise?
  • What are your typical turnaround times for creating the documents I’ll need?
  • What is your fee structure?
  • Will you have any conflicts of interest in taking on my business?
  • How will you communicate with me (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. Use these sources to compile enough information about your attorney candidates to make an informed selection.


What about payment?

Payment is a huge consideration, especially for owners looking to keep their costs low. Be sure to ask the startup lawyers you may work with about their preferred payment arrangement. Then, ask whether they offer any payment structures that could help you minimize or defer your legal costs. Here are a few that you might see:


 Flat fee

Your attorney may offer a flat rate for drafting standard legal documents. This arrangement can be enormously helpful in budgeting costs.


 Discounts for multiple services

Your attorney may offer you a reduced rate for using the firm for all the documents and negotiations that are needed to begin operations or accomplish a set of goals.


 Contingent fee

Your attorney may be open to receiving payment after your incorporation documents or trademark requests are approved or your contract is accepted by a third party rather than billing 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 they provide.


The startup lawyer you choose may require an upfront payment or retainer, which can be refunded if the service provided is less than the retainer value. You could also be billed for 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. You can take on some tasks, like obtaining a business license, filing business formation papers, or applying for an employer identification number, without an attorney’s help. For other tasks, including drafting founder agreements, reviewing contracts, or setting up term sheets for investors, it’s best to work with a legal professional.

You could also reduce some of your legal costs by using a legal form site. Law Depot is one option that offers standard legal forms and services for a low monthly or per-item rate. Of course, lots of owners 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 slow the process or hurt their organization. Use your discretion when it comes to these sites.


What’s next?

It’s important to find a great attorney for your business. Next, find a highly qualified accountant who can help you create financial statements and forecasts and prepare your tax filings. Check out this article before getting started:


Interested in connecting with an accountant? You can check out some of our favorite firms here:


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