Hiring a Business Lawyer: Everything You Need To Know

Make no mistake—at some point in the life of your business, you will need to consult with an attorney. Hiring a business lawyer can go a long way toward positioning your business for success.

If you’ve never thought about hiring a business lawyer before, don’t worry—it doesn’t need to be stressful.  

It’s just a matter of asking the right questions and finding attorneys who have the right experience for resolving your specific issues.

When to Start Thinking About Hiring a Business Lawyer

Legal issues can come up in any stage of a business’s lifecycle, so it’s always good to have legal contacts in your back pocket even if you don’t necessarily need their help on a day-to-day basis.

Some important stages where your business could benefit from an attorney’s assistance include:

• Organizing your business: This is perhaps the most important components of forming your business, since the type of entity you go with will dictate not only your tax structure but your own personal exposure to creditors and other business-related liabilities.  

• Choosing where to organize your business: Deciding on the right state to organize your business is also crucial. Some states, such as Delaware, offer favorable laws for corporations and judges who are well-versed in corporate issues, while other states—such as New York with its publication requirement for limited liability companies—have additional registration requirements you’ll need to factor in.   

• Protecting your IP portfolio: Patents to protect your inventions or trademarks to protect your brand images can be powerful tools for keeping competitors from poaching your ideas or tarnishing your brand.

• Resolving employee issues: Whether it be troubleshooting workplace safety considerations, workers’ compensation problems, or background checks, dealing with employees presents a number of legal issues.

• Analyzing contracts and leases: Attorneys can help analyze your vendor contracts, commercial leases, and other agreements to make sure they’re in your business’s best interests. They can also help with negotiating your agreements to address potential issues.

• Negotiating with investors and venture capital firms: Lawyers experienced in IPOs and venture capital financing can help analyze and negotiate complex investment deals.

• Merging and acquiring companies: Reach out for help with analyzing and drafting merger and acquisition agreements—if the time comes, you’ll want to know that your interests are fully considered.

• Data security: Companies that store employee or customer data need to structure their data preservation policies to comply with a number of data security standards to avoid costly sanctions.

These, of course, are only a sampling of the types of scenarios that could pose pressing legal questions for your business.

How to Know You’re Being Billed Fairly

Entrepreneurs hiring a business lawyer can expect a confusing range of fee arrangements, including hourly rates, retainers, contingency fees, and even subscription plans.

Lawyers, however, are not allowed to charge unreasonable fees. Under the American Bar Association’s model rules—which reflect the rules of most states—some factors courts consider when judging the reasonableness of attorney rates include:

• The time and labor required, the novelty and difficulty of the questions involved, and the skill needed to properly perform the legal service

• The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer

• The fee customarily charged in the locality for similar legal services

• The amount involved and the results obtained

• The time limitations imposed by the client or by the circumstances

• The nature and length of the professional relationship with the client

• The experience, reputation, and ability of the lawyer or lawyers performing the services

• Whether the fee is fixed or contingent

Other indicators such as the market your attorney works in and the type of firm the attorney is associated with can also impact pricing. It’s best to ask other attorneys and professional contacts in your market for more insight.

Finding the Right Attorneys or Law Firms for Your Legal Needs

When shopping for legal services, your end goal is to find a lawyer or law firm that has experience in—and a successful track record with—the types of matters you’re dealing with. There are a number of other factors, however, that can impact your decision. Some other considerations you should keep in mind when interviewing attorneys include:

• Where the legal action will occur: Confirm with state and federal bar associations that the attorneys you’re considering have the state or federal court licenses required to try your case, or is otherwise eligible to appear pro hac vice in courts they’re not licensed in. Just because a lawyer is licensed in a state doesn’t mean that they’re also licensed to try federal cases in that state.

• Specialties and experience: Ensure that the lawyer you’re working with has an established track record with resolving the matters you’re dealing with, or bring aboard a lawyer on your legal team who is.

• Level of support needed: Find attorneys or firms that can provide the right level of support and manpower for resolving your specific issues.  While boutique firms can generally provide a more personalized experience, larger firms tend to be better equipped to providing quicker support, more legal manpower, and diverse specialties.  

• Attorney’s history of ethical conduct: Check with state bar association grievance committees to confirm whether the attorneys you’re considering have acted unethically or conducted any bad faith practices, as foul play could hurt your business both inside and outside the courtroom.

Starting Your Search

Yes, you’ve got a number of factors to consider when hiring a business lawyer, but don’t let this frustrate you.  

Start by asking your professional contacts, family, and friends for referrals, and start setting up informational meetings with specific attorneys and firms. It’s important to start this process as soon as possible, as you don’t want to rush this process while you’re under the time crunch of responding to a legal action.

In the end, regardless of where you’re at with your business, it never hurts to consult with an attorney.  

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