What to Ask: Hiring an Attorney and Business Operations | Ken Moyle, Esq.
Starting a new business? UpCounsel attorney Ken Moyle explains what every startup should be asking their legal team about hiring an attorney and business operations3 min read
Would you consider yourself a business person or a lawyer?
This is a trick question. Most business lawyers want to convince their clients they're business people, too. But lawyers need to understand their role. The two are not necessarily dichotomous, but in the end, the lawyer is there is advise on the law, and the business person is responsible for the business decisions.
How often are you the smartest person in the room?
The answer to this question can reveal much about the personality of the lawyer; her confidence, willingness to listen, and ability to take direction or take a stand.
When was the last time you said "no" to a CEO?
The answer to this question can reveal much about the ethics of the lawyer; her moral compass, willingness to compromise principles.
Who is your favorite fictional lawyer?
This question is designed to reveal the self-perception of your legal adviser. In some cases, you find that your lawyer aspires to be a fighter, while you may not want that. In other cases, you may find your lawyer wants to be more like a thoughtful judge, where you would rather have an advocate. Listen carefully to the response and determine if the character being described fits your idea of an ideal legal partner.
What is more important: maximizing revenue or minimizing risk?
Another trick question. The answer should be neither. The lawyer's alternative response should help in gauging the alignment of your risk appetite versus hers.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Putting the business assets and risks behind a well-defined entity is essential to protecting business owners from overexposure to liability. The addition of a comprehensive errors and omissions insurance policy is also highly recommended.
What specifically are small business owners most confused about when you first meet with them?
The importance of a well-defined business model.
How can quality legal services help a small business grow?
Scalability is all about logical planning. A good business lawyer has enough experience to understand how to plan for growth. As a trusted adviser, the strong business lawyer will be able to help entrepreneurs map out the basic steps for scaling the business.
How can quality legal services help small businesses save money?
The best business lawyers possess the experience and business acumen to recognize patterns and help clients avoid common mistakes would otherwise result in lost time and wasted resources.
How can small businesses maximize the value of their legal team’s services?
By not treating legal advice as a scarce and expensive resource. There is a tendency to only turn to legal advisers when things are going badly, or as a last resort to "test" a fully formed idea. True business lawyers are trusted advisers through every step of the business planning process.
Should business partners have the same amount of equity in a company? Why or why not?
Not necessarily. The most important element of equity is transparency. If one co-founder has less equity than another, they all should know it and understand why.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Financial condition as revealed by the company's last 2 years' financial statements
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Yes. Your lawyer is your backstop, but he's also your coach.