Most California businesses wait until they are sued to hire a business attorney, and it is disastrous for their company. “By the time you receive summons, the damage is already done, and it is just a matter of how much you will pay to settle the lawsuit. If you hired a business attorney from the very start, you would have saved yourself time, money, and your company’s reputation,” according to Brad Nakase who is a Los Angeles business lawyer at the Nakase Wade law firm.
A California business lawyer helps set up your company in a way that will prevent most lawsuits and make it easy to quickly quash any that may arise. They can help you with some of the following things when setting up your business:
- Negotiating favorable real estate contracts
- Obtaining licenses
- Registering your business for federal, state, and local taxes
- Complying with industry regulations
- Protecting your company’s intellectual property
- Incorporating your company
An attorney is also a great sounding board for your business; they deal with countless other companies and have seen the pitfalls that new owners fall into. They have seen what leads to success and what is a recipe for failure. For example, an attorney can help setup company protocols to avoid hostile work environment before you need a sexual harassment lawyer to defend a lawsuit.
We know, we know, lawyers have a bad reputation (thanks, Hollywood!) But when you find an attorney that is a perfect fit for your company, then it will be a valuable professional relationship. Read on to learn more about how to find a business lawyer for your company.
What Do I Need To Consider When Searching For a Business Lawyer?
There are a number of factors you should think about before you even start looking for a business attorney. Spend some time brainstorming what sort of law firm will suit your company the best.
What Skills Will My Company Need?
All attorneys will specialize in one or more areas of law. These are areas that the lawyer is good at, enjoys, or understands really well. Business law is a specialization, but it is often paired with other areas of law as well. Business law often crosses over with many different areas like:
- Tax law
- Real estate law
- Copyright protection
- Litigation and liability / Personal injury law
- Corporate law
- Employment law
And that is to just name a few! Think about what your main business is and write down some skills that you will need often. You should only look for lawyers who possess this skill set. Generally, you will need your attorney to refer you for help for complex issues in other areas, but it will be more convenient for the bulk of your legal dealings to be with one lawyer or law firm. For example, if you are a graphic designer, then intellectual property protection would be a vital skill set for your attorney to have. Contract law may also be pretty high on your list if you deal with a number of clients.
Would a Big Law Firm or a Small Law Firm Be Best?
There are law firms of all sizes out there, and deciding what type you want to work with will help you to narrow down your options. There are benefits to each law firm size, so you need to weigh up what will work best for your business. A large law firm will have higher operating costs because of office space and staff numbers, so they will be more expensive. But they will have an excellent reputation in the local area, so cease and desist letters will be more effective. A smaller law firm will be more cost-effective and more personable. Remember, you only need to think about your company’s needs for the next 5 years or so. Many companies will have one law firm that specializes in startups get them through the first few years of operations. Then once they are established, they might switch to another law firm that will be better suited for their company’s needs.
Look at the size of the startup and what businesses they cater to as well when making your decision.
Do They Have Experience In My Industry
You want a law firm that has experience in your industry but one that does not work with too many competitors. The more of your competitors that the business lawyer works with, the higher the risk that a conflict of interest may arise in future.
By having industry experience, your lawyer can help you to navigate industry regulations and discuss what may have worked or not worked for their clients in the past.
Attorney Fee Structures
It is important to know the three common fee structures that a business lawyer may use, so you can be aware when negotiating fees. Your attorney may use different fee structures for different services or even a combination of two or more.
- Contingency fee – Instead of being paid upfront, your attorney will only pay you once they win the case. Their fee is paid as a percentage of the financial compensation you receive, so it is only used if winning means recovering damages. An attorney will be unlikely to use this for new clients because if you switch lawyers, then they have put a lot of work in for no pay.
- Flat fee – This is a set price for a service that has a clear scope and does not require interaction with other people to complete. It is often used for drawing up a contract, incorporation, or preparing paperwork. The service will be clearly defined in advance so that the attorney knows how much time to put aside when charging for the service. A flat fee rate is the most predictable and easy to budget for.
- Hourly rate – Any services that require dealing with other parties or without a clear scope of work will be charged at an hourly rate. This is because the attorney will not know how long it will take them, and they want to be paid for their time. Negotiations, litigation, even compliance training for staff will be charged at hourly rates. The best practice is to ask your lawyer to give time expectations in advance and to keep you up to date for how the reality is comparing to expectations as they go.
Interview Business Attorneys
Once you have a shortlist of business lawyers, you need to book a consultation with them all to see if they will be a good fit. We recommend creating a list of questions for the consultation so that you can compare the lawyers easily. It will help direct the conversation and keep you on track during your allotted time.
These questions need to be specific to you and your company, but here are 5 great questions to get you started:
- Do you spend the time to educate your clients? – A good business attorney will take the time to send out newsletters with legal tips and law changes. They will also take the time to explain things to you in a way you can understand, i.e. No legal jargon.
- What is your experience? – Ask them about their legal experience and where their expertise lies. Ask them about cases they have worked on for companies like yours and what value they think they added.
- Will you be the one working on my account? – Most law firms will have paralegals doing some clerical work on your account, but bigger law firms may have a number of attorneys who will deal with you. You want to find out what the arrangement is before you commit and meet the lawyer who will be your main contact.
- Do you foresee any conflicts of interest? – If you file a lawsuit or a sued by one of your attorney’s other clients, then this creates a conflict of interest. You will need to find a new attorney for the case and will be at a disadvantage because they need time to get up to speed with your company.
- Do you have a good network? – You may need to tap into your lawyer’s connections if you need specific expertise. Your attorney should be happy to refer you and have a good network that they can tap into.