Hiring a lawyer is a little like a trip to the dentist. Even though we might not like it, hiring a lawyer is the right thing to do especially if you are buying, selling or starting a practice. And, even if you aren't, having an established relationship with a lawyer before you need one is critical to effectively handling a potential legal situation.
by Mike Whitmer in Choosing Advisors on Wednesday, December 31, 2014
Remember as you look at choosing a lawyer that not all lawyers are alike. They do have specialties or niche industries they represent. As you begin your search, you’ll need to identify a number of things, which we’ll get to in a minute.
Ultimately, you’ll want a business attorney who is used to the challenges and opportunities facing small business because those are the issues you’ll be facing. You’ll want someone who can look at contracts, real estate deals, as well as represent you in any legal action.
So what are other considerations in your search?
- Get recommendations. No need to surf the yellow pages. Check with peers, friends and family to see who they would recommend. Be sure to ask what they like and don’t like about their recommendations.
- Size matters. A larger firm has more resources under one roof, but usually costs more. A smaller firm means you’ll likely deal with the same attorney regardless of the project. There are advantages to both, but it is what you are comfortable with that matters most.
- Fee structure. It is fair to ask a potential lawyer how they would bill you. Fees are typically structured in one of three ways: hourly costs, project costs or retainer.
The most expensive way is typically hourly. There is a set hourly wage and you are charged for the time spent on the project.
A project fee is usually a better deal, even if there is a clause for hours exceeding the agreement. The project fee is often based on the firm’s experience in handling a transaction and arriving at an “average” cost.
The retainer is good if you expect to have issues throughout a time period and you want to know what the cost per month is going to be. There will be some months that the retainer is a great deal, and there are some months there isn’t much billed against it. The idea is that it “averages” throughout the time of the retainer, plus gives you continuous access to the firm.
Ask questions. Understand who you will be working with. You’ll want to ask questions like:
- Do you have clients who are similar to me?
- What kind of experience do you have working with small businesses?
- What are the fees?
- What kind of activities do you think we’ll work on?
- If you aren’t on retainer, will I still be able to contact you if I have questions?
In the end, make sure you have enough information to decide whether you’ll like working with a lawyer and whether you’ll want this person on your side.