How do I Select a Lawyer? Interacting with Lawyers and Keeping Costs to a Minimum By Leon Presser of What it Takes to become an Entrepreneur
When I started my first company I needed help from a lawyer for a number of reasons. I had to decide what kind of legal structure to create (e.g., C corporation, S corporation, LLC, …), I needed advice on my lease for space, I needed guidance on employment agreements, I was going to be selling software and I needed a software licensing agreement, and I had a few other issues where I required legal assistance. These days lawyers generally charge anywhere from $200 to $600 per hour. When you are starting you have a very finite amount of dollars (i.e., your seed money) and you must protect it like a tiger. Remember, this is typically all the money you have to get your business going until you start generating revenue. So, turning on a lawyer’s charging clock will keep you awake at nights. Thus, the basic questions you face are: how do I select a lawyer, how do I interact with the lawyer, and how do I keep my legal costs to a minimum? These are challenging issues you need to address. I will provide you some of the guidelines that should help you obtain good legal advice while keeping your cost down. Pointer 1: Determine the area in which you need legal help. For example, does your problem concern employment law, contract law, intellectual property law, or real estate law? In any case, you need to hire a lawyer who specializes and has experience in that area. You want to get the best advice you can, and you want to minimize the lawyer’s research expenses. Pointer 2: Before you hire a lawyer, check him/her out. Identify two or three candidates. Ask around. If you do not receive solid recommendations, look for other lawyers. Meet each candidate and follow your gut feeling. Do not compromise. If none of the lawyers makes you feel comfortable, keep looking. The type of questions you want to ask others about a lawyer include: Is he/she competent? Is he/she easy to communicate with?
Is he/she efficient and fair in his/her billing? Is he/she timely in dealing with clients’ tasks? Is he/she respected by others in the legal community? Does he/she have many repeat clients? Do you know anyone who was not happy with this lawyer? (If you get a yes answer, follow this lead to its logical conclusion). Also check with your State Bar Association to see if any disciplinary action has ever been taken against any attorney you are considering. Pointer 3: Meet with each lawyer you are considering. The questions you want to ask the lawyer when you meet him/her include: What is your area of expertise? What is your actual experience in this area? Do you feel comfortable working on my particular problem? What is your time availability to deal with my problem? Who are other colleagues you can consult if necessary? How do you charge for your services? Will you be assigning an associate to this case? (If yes, meet and query the associate. “Associate” is the title given in law firms to junior lawyers). Pointer 4: Be prepared to describe to the lawyer what you need as clearly as you possibly can. Do your best to define your need as a well-contained request. Try not to give your lawyer an openended task. Pointer 5: Ask your lawyer to provide you with a written estimate of what the charges will be for working on this problem and for providing the answers or legal products you need. Lawyers refer to a
letter describing what work they will do for you and how they will charge for their services as “an engagement letter.” You will need to be careful and fair. If you change the scope of the legal task you have given the lawyer, he/she will tell you that the original estimate no longer applies. I recommend that once the lawyer has provided you with an acceptable estimate, you request that if at any time he/she realizes that the charges for this job will exceed the estimate, you are to be notified before the additional charges are incurred. Finally, try to negotiate a “not-to-exceed” amount as long as you do not change your task in any major way. The above discussion should get you started in preparing to identify and interact with lawyers. Of course, I must tell you that I do cover this topic in much more detail and provide a number of additional guidelines in the book. I do want you to read the book.
Leon Presser is a veteran entrepreneur and author of “What it Takes to be an Entrepreneur”. Read more of his entrepreneurial advice at www.WhatitTakestobeanEntrepreneur.com