06 Jun Should Your New Small Business Hire a Lawyer?
Starting a new small business can be overwhelming.
One of the top reasons potential entrepreneurs hesitate to get started is the idea that they must spend hundreds or thousands of dollars on a lawyer right out of the gate.
In today’s litigious society, going it alone legally is risky. You want to make sure to make sure you’re setting things up and running them correctly. If so, you could prevent lots of problems for your business down the road.
However, legal help dips into your startup’s precious cash — cash you need for other things. Thankfully, you may find there are some options that can give you peace of mind without draining your bank account.
Should You Find a Lawyer Right Away?
Your timing for hiring a lawyer will depend on what type of business you’re starting and how complicated it is. Generally, the simpler it is, the less you need a lawyer.
Plenty of web-based companies such as NoLo, RocketLawyer and LegalZoom have sprung up in recent years. These companies give business owners and private citizens affordable alternatives for common legal needs. They offer templates that you can use to do things like creating a business, file for a copyright, or post a job and hire a candidate. For the price of site membership, some of these services also offer on-demand lawyers to handle your specific questions.
These options can be great for businesses that are relatively simple (such as sole proprietorships). However, if you are establishing a corporation with multiple owners and a partnership agreement, you might opt to involve a lawyer right away.
How to Choose a Lawyer For Your Small Business
Hopefully, you will be working with your lawyer throughout the duration of your small business. Take the time now to shop around and find a great fit. Here are a few things to consider as you choose:
The legal world is vast and varied, so find someone with as much background in your industry as possible. A small business lawyer can do the job, but one who has worked with your type of business is generally a better choice. See if they understand industry terms and anticipate your legal needs before you describe them.
The more complicated your legal needs, the more years of legal experience you should be willing to pay for. Some legal situations, such as selling a business, certainly have higher stakes than simpler tasks such as incorporation. Remember that years of general legal experience aren’t the same as the numbers of experiences in with a certain type of legal task such a business sale. Many firms have a deep staff and can task junior attorneys with simpler needs. Then, they will assign only the complicated ones to the more experienced attorneys, saving you money.
Your comfort level with your lawyer may be the biggest indicator of your future working relationship, as this column in The Muse explains. You shouldn’t dread calling your lawyer because you’ll be stressed enough already with running your business.
Red flags may include hidden fees, the feeling that your lawyer isn’t quite listening to you, or that they are billing you while still learning about your subject area.
Our Advice: Establish a Relationship Now
Whether you hire a lawyer right away doesn’t have to be strictly an either/or decision. Most businesses will want or need a local, in-person lawyer eventually. Rather than waiting until those needs arise, form a relationship with a lawyer as your business forms. That way, you can take your time to find the right fit and have them on call when you need them. This doesn’t require a large investment of money upfront, and you can save the cash for your other startup needs.
Consider that you can also use a combination of an online legal service and a hired legal professional for your startup needs, just as this NoLo blog suggests.
An attorney you speak to in person may be able to point you in the right direction as you set out to manage legal forms yourself. Or, you can work on the paperwork yourself to start, then have your lawyer review your work. These combination options cost less but still offer you peace of mind.