Legal

scales and a judgeYour attorney, like your business advisor and accountant, should be one of the first members that you choose for your advisory team.  Your attorney can guide you in setting up your company legally, protecting your personal assets from business debts, drafting important contracts and business documents, and assisting you when disputes arise.  It is key that you do not wait until a problem occurs, such as when you are sued.  If such an event should happen, you will want a lawyer who is already familiar with you and your business.  Of course, by having an attorney from the beginning, you might be able to prevent such events from occurring.

When choosing an attorney…

When you begin to look for an attorney, do not start in the yellow pages.  Although you can find competent legal counsel in that manner, since most lawyers have a listing, it is preferable that you ask colleagues, friends, and others in your industry for recommendations.  By doing this you will find honest suggestions and criticisms of legal professionals from those who have experience.  To help you with your search, Enterprise has selected a list of attorneys in the Pittsburgh area who work with small businesses in a variety of industries.  To find out more information on each one, click on the links below for company profiles and bios.

When conducting your search, keep several things in mind.  First of all, consider whether you want to retain a big firm or a small firm.  Typically, a big firm charges higher hourly rates, but it also has many lawyers with specializations in the various areas of expertise that your growing business will need. Larger firms usually have the benefit of more relationships with third party specialists, should you need them.  Smaller firms generally have lower rates but often provide more generalized services.  They may have to refer you to a “specialist” if you have a complicated situation.

Secondly, consider the work that you will need your attorney to conduct.  Several areas of specialization that you may need are business organization law, contract preparation, real estate lease review, license and tax registration, intellectual property, labor and employment law.

Finally, consider where their offices are located.  You will probably need to speak with them frequently during your start-up years and not want to waste a lot of time traveling to visit your attorney when you could be running your business.  Likewise, you will probably not want accumulate fees for them traveling to you.  Remember that a phone call usually costs much less than a personal visit.

When conducting interviews with attorneys…

After you have selected several good candidates for your legal team, you will want to thoroughly interview each one.  Remember that although you may be looking at one firm or another, you are hiring a particular lawyer.  You will be looking for several personal and professional qualities during your interview, including:

  • Are they knowledgeable in the legal areas affecting your business?
  • Do they seem honest and worthy of your trust?
  • Are they experienced in your type of business?
  • Do they have an established network of legal specialists that they can call on or refer you to in the event that they are not as knowledgeable in a particular area of law that your business requires?
  • Are they interested in representing you, and in teaching you or helping you to understand your legal rights, obligations, and laws that apply to your business?
  • Will they be available when you call and return your calls or emails promptly?
  • Are they personable and do you get along well with them?

In addition, be cautious of several characteristics:

  • Are they overly interested in the non-legal aspects of your business?
  • Do they suggest taking an ownership interest in your business in lieu of a fee?
  • Do they seem disorganized?

It is critical that you trust your attorney and find him or her to be knowledgeable and experienced in your industry.  In addition, you should understand that they don’t know everything about every kind of law.  A good attorney knows when to call on a member of their legal network to ask for assistance or for a second opinion.  Ask for credentials and references.  Call their references.  Was the work well done?  On time?  Efficient?  The extra steps taken now can save you a mile in the long run, especially during a critical time in your business’ development.  Remember, don't be intimidated during your interview.  Your attorney should be working for you, and you should be able to talk candidly with each other.  Several questions that you may want to ask them are:

  • How long have you been practicing?
  • What are your areas of expertise?
  • What kinds of clients do you represent?
  • How many small businesses do you work with?
  • How many are similar to my business?
  • Do you have any references?
  • Will I be working with you directly or a member of your staff?
  • What is your fee structure?

Understand their billing practices:

  • Are tasks typically billed at a flat one-time fee?  Or do they bill hourly? If so, what is the hourly rate?  Don't decide entirely on hourly rates.  An experienced lawyer may answer your question in a lot less time than one who is less experienced.
  • If other persons will be working regularly with you, ask for their rates and to interview them.
  • Ask if they have “caps” for bills that come in over estimates.
  • Learn in what time increments they bill.   We suggest 1/10 of an hour.  If it's a larger increment, such as ¼ of an hour, you will be charged a lot more than you should for a five minute phone call.
  • Will you get a detailed, itemized bill each month showing who did the work, what work they did, when it was performed, and how much time was spent?
  • Do they bill monthly, which is easier to review for mistakes or excessive fees?
  • Do they offer or can you negotiate prompt payment discounts?
  • How do they bill travel time?  Many firms bill at ½ rate, rather than at full rate.

Create a list of legal tasks that you need and ask for a written estimate of fees, before committing to a lawyer.  Monthly retainers may be more cost efficient initially, if you plan on having routine legal needs.

For more information, visit the American Bar Association at www.abanet.org

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