Whether you are looking to hire a small business attorney for a particular transaction or to serve as general counsel, you want them to be knowledgeable, efficient, and accessible.
Usually, the first two of these requirements go without saying for any business, but the third can be equally as important and deserves expansion. For many small businesses, a single sale or contract can mean the difference between making payroll for the month or having to draw on a line of credit.
If your attorney is too busy or unwilling to attend to your needs in a relatively prompt manner, in the best case an important opportunity could be missed and in the worst case an unnecessary liability may be incurred.
As someone who knows the law, I can tell you that the laws governing business formation, employment, contracts, and leasing are many and complex. Although it is tempting for small business owners to go it alone when it comes to many legal issues, mistakes made in the early stages of a business’s life can have enormous legal consequences down the road.
In the long run, the fees you pay to a business attorney to get your foundational documents in proper legal shape will be returned to you in spades if lawsuits emerge or investors initiate due diligence.
Although you will want to get a lawyer to assist you during business formation and when the need arises, you do not necessary have to pay an arm and a leg for it. When I first started practicing law, confusion from clients regarding billing statements and billing procedures took up more of my time than I care to recall.
Though confusions were inevitably cleared up without consequence, I knew steps needed to be taken to present the billing information in a more user-friendly way on the front end. It is in this vein that I present these tips for both understanding and keeping your business’s legal costs down:
Read the entire fee agreement before signing
This may seem obvious, but you would be surprised how many people do not have the patience to read through their attorney-client agreement.
The agreement should list how much you are paying, when those payments are due, whether you will be billed hourly or pay a flat upfront fee, and whether or not other costs may be incurred. Do not be afraid to talk with the potential small business legal counsel about the billing details.
Be aware of your time
If you are being billed by the hour, make sure you know in what increments you will be billed, i.e. in 6 minute blocks. This will allow you to gauge how much you are being charged when in a meeting or on the phone with your attorney.
Be aware that most attorneys keep meticulous records of every minute spent working on your case.
Reduce the paperwork
In light of the above, you can probably see why this is important. Why make an attorney read 4 emails or answer 6 phone calls when the issue discussed could have been handled in just one of these with proper planning?
Keep your conversations focused on legal issues
It is not uncommon for an effective attorney-client relationship to involve at least some small talk, especially with small business legal counsel.
Personally, I try not to charge clients for time spent discussing nonlegal topics because I feel I have some control over the conversation and an obligation to bring it back to their legal needs if I plan on charging for my time.
Not all attorneys share this point of view, however, so try to keep interactions on topic to avoid receiving a large legal bill over a discussion about Charlie Sheen’s latest antics.
Be proactive
Call your attorney periodically to check in on your case’s status and discuss any additional legal needs your business might have.
This may sound counterintuitive and contrary to the preceding tips, but you do not want to become so paralysed by the threat of incurring legal fees that you don’t keep your attorney in check and informed of company changes with potential legal implications.
Review your attorney’s bills
If you are concerned that you may have been over-charged, bring it to the attorney’s attention and ask for a more detailed explanation. Mistakes in billing are made from time to time, so it is usually worth your time to at least skim the bill.
I hope you enjoyed this post and found some information that may be useful to you, before you engage with small business legal counsel.
About the Author
James Garcia is a retired attorney, living with his wife and two dogs in Austin, Texas. James is passionate about helping small business owners save legal costs, and can be found on Twitter.