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A start-up attorney is a vital resource for any new enterprise. Read on to learn how to choose the best one for your fledgling organization.
Why Hire a Startup Attorney?
Many entrepreneurs feel a start-up attorney is an unnecessary expense unless they're in legal trouble. However, by that point it's too late. The lawsuit is upon you and it will cost time and money to resolve it. The in-court costs, attorney's fees, settlement costs, and other expenses you'll face fighting a lawsuit can be crippling for a start-up, so it's crucial to avoid them.
A good start-up attorney can help you take the right action early so there's much less chance that someone will take legal action against you. Legal fees for staying out of trouble are a fraction of legal representation costs during a civil suit or criminal trial.
Your start-up attorney can also protect you from problems arising within your organization. Your lawyer will help you draft agreements clearly outlining the way your company's founders, employees, and investors will interact. These agreements provide a guide for how to resolve disputes about things like ownership rights, equity, and confidentiality.
All businesses must comply with government guidelines. Top start-up lawyers know these guidelines, including recent changes to them, and can ensure you don't face unnecessary fines or tax liabilities.
The earlier you form a relationship with a start-up attorney, the more beneficial this relationship will be. Your attorney will get to know your business and its needs over time to continually provide personalized and relevant advice.
Legal Tasks Your Startup Attorney Can Perform
Your startup attorney can help with almost every aspect of your startup business, including:
- Prepare contracts for partnerships with suppliers, clients, and customers
- Advise you whether to sign or amend contracts other parties issue
- Advise you how to hire and adequately compensate employees
- Advise you how to manage or terminate problem employees
- Negotiate your office or retail space lease with a standard "tenant's addendum"
- Ensure your business complies with zoning rules
- Help your business protect its intellectual property, including filing copyright, trademark, and patent applications, and making sure it doesn't breach any other business's intellectual property rights
- Ensure your advertising and marketing complies with federal guidelines
- Draft software license agreements
- Advise you whether to become a corporation or a limited liability company and prepare required paperwork
- Register your business for federal and state tax identification numbers
- Advise you of the tax consequences of your business transactions
- Help you incorporate your business
- Help you form business partnerships with other companies
- Oversee meetings and advise you on any legal points discussed
- Ensure company officials meet their obligations to shareholders
- Ensure your business adequately protects its customers' privacy
- Help your business respond to government data requests
- Offer legal advice to minimize the chances of other businesses taking legal action against your company
- Represent you in lawsuits brought against you or your company
How to Find the Best Startup Attorney
The best attorney for your startup will specialize in business. There's no sense hiring an attorney skilled only at preparing wills, for example. Consider the tasks you'll want your lawyer to perform and find an attorney experienced in these activities.
Browse through the list of startup attorneys on UpCounsel to compile a short list of recommended lawyers in your local area.
Things to Consider When Hiring a Startup Attorney
Consider your budget and needs when choosing a startup attorney. As a rule, the larger the legal firm, the greater its overhead, and thus the more you can expect to pay.
Smaller law firms have more affordable lawyers, but with fewer lawyers available, they're less likely to have all the skills your business needs to grow. Large firms usually have lawyers with a wide variety of specialties, so you can get all the legal services you need from one location.
In addition, lawyers working for larger firms typically have more influence in the community. If you're facing resistance or are threatened by another person or organization, a lawyer from a larger law firm usually has more power to resolve the situation in your favor. A lawyer from a large firm could also use his or her sway and introduce you to potential investors or business partners.
That doesn't mean small law firms and independent lawyers don't have their perks for startup businesses. When legal businesses are small, it's more likely the lawyer you speak to will handle your business's legal requirements. Small startups often find it easier to connect with small law firms and independent attorneys who understand the unique requirements of running small companies.
Your lawyer's age may also come into consideration. If your startup has a very youthful culture, then you may prefer working with a younger lawyer. Young lawyers are often more familiar with the technology that startups work with than older lawyers. While experience in the legal industry matters, this needs to be balanced with the type of relationship you can have with your legal representative.
Location also matters. You're likely to visit your lawyer often when your startup business is new or expanding. You don't want to waste a significant amount of time in transit. While you shouldn't base your decision on location alone, your lawyer should have offices convenient to yours.
Questions for a Startup Attorney
Meet with a number of potential attorneys to decide which one suits you. Ask the following questions to get a better feel for which attorney would work best for you.
- What experience do you have that would be relevant to my business? If you have specific requirements, like plans to become incorporated, feel free to ask about the lawyer's experience in this specific area. Consider not just the type of experience but the duration. Experienced lawyers are the most efficient because they don't need to learn about the topics relevant to your business.
- What is your focus? It might seem appealing to pick a lawyer claiming to do a lot of things well, but in reality, generalists never make the best attorneys. Discover your potential lawyer's focus and determine whether that focus fits your firm.
- Are you part of a full-service law firm or do you have close relationships with other attorneys specializing in the topics you're not familiar with? Even top lawyers can't specialize in every area of business law. If your lawyer can't handle a specific area of business law, having connections to someone that does will benefit your business. You don't want to start from scratch searching for a new lawyer every time you need help with a new legal area. Some lawyers will happily refer you to colleagues, while others work for full-service law firms employing attorneys specializing in all the legal areas you'll need.
- Do you have other clients in my industry? Having other clients in your industry gives your lawyer specialized knowledge of your field. This is much more valuable than having a general understanding of business law. The legal code of ethics requires all lawyers to keep client information confidential, so you shouldn't worry about other clients learning information about your firm.
- Have you had experience with other startups at my stage of their life cycle? A new startup has different legal requirements from a more mature startup firm. Look for lawyers who have worked with startups at a similar stage of their life cycle.
- Will you be the person I'll deal with on a day-to-day basis? Especially when dealing with large legal firms, you may find the lawyer you're introduced to won't be the one dealing with your work. If this is the case, ask to meet the lawyer responsible for your workload. It's important to feel comfortable with this person, not just the lawyer you were introduced to.
- Are you open to teaching me? As an entrepreneur, you probably feel most comfortable having a hand in all elements of your business. That includes the legal side. Some lawyers will take the time to teach you about the law and how it impacts your business. Others just prefer to get on with the job. If you find a lawyer that will teach you, you can learn to save money by handling some legal tasks yourself, like filing applications and reviewing contracts.
- How do you prefer to communicate? In the modern age, we have a wealth of communication tools at our disposal. Find a lawyer whose communication style matches yours. Does your lawyer want face-to-face meetings to discuss any legal matters or could you video conference? Does the lawyer like using the phone? How about sending instant messages or using social media?
- Can you handle slow and busy times? Working with a startup can be unpredictable. There are bound to be lull times followed by very busy periods. Your lawyer should be willing to put in extra hours when needed yet also understand when you have relatively few legal requirements.
- Can you provide me with a clear, comprehensive quote for your services? Startup companies can't afford unexpected expenses. While price shouldn't be the only factor dictating your choice, you should expect a potential lawyer to be transparent about his or her pricing policy.
- Do you have flexible billing arrangements? Cash flow isn't always on the side of startups. It can make you feel more confident to know that your lawyer will be flexible about billing. If the lawyer charges a flat fee up front, ask whether you could hold back 10 to 20 percent of that rate until you're satisfied. See whether the law firm has a startup package or offers a discount for paying before your invoice is due.
- What do your fees cover? It's common practice to exclude some items, like filing fees and overnight courier charges, from flat fee calculations. Make sure you know what a flat fee covers and any additional costs you must pay.
- Can I call your references? An attorney will always try to present his or her services in the best light. Calling a lawyer's references is the best way to separate sincerity from spin and discover what an attorney is really like to work with. Approach any lawyer unwilling to share references with caution. Ask the references how responsive the lawyer is, the type of work the lawyer completed, and what the working relationship was like.
While the answers to these questions are important, don't underestimate the importance of your gut instinct. Even if a lawyer seems right on paper, that doesn't matter if you don't have the right connection. Select a lawyer you feel you can trust and enjoy working with.
Other Resource Ideas
No matter what your own legal knowledge is, when you do your research you can feel confident you're selecting the right startup lawyer for your new business.
On UpCounsel, you can find and connect with top-rated startup attorneys & lawyers that provide a range of startup law services for startups and entrepreneurs that are starting a business. Any of the top-rated startup lawyers you connect with will be available to help with a variety of your startup law related legal needs on-demand or on an ongoing basis.
From primarily dealing with things like business formation, contracts, leases, equity financing, securities, and intellectual property protection, the startup lawyers on UpCounsel can help you with a variety of specialized and general startup law related legal matters. No matter what type of startup law needs you have, you can easily hire an experienced startup lawyer on UpCounsel to help you today.
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