What to Ask: Hiring an Attorney and Startup Tips | Linda Awkard, Esq.
Starting a new business? UpCounsel attorney Linda Awkard explains what every startup should be asking their legal team about hiring an attorney and startup tips3 min read
What hands-on experience has the attorney had with startup businesses, and how long did the attorney represent the business after initial formation?
This question is essential because experience provides the attorney with the ability to quickly analyze the initial needs of the business, and the greater the years of experience, the greater the ability of the lawyer to project and protect the client at the inception of their business.
Is the attorney's practice structured in a manner that allows for devoting sufficient attorney time to the legal needs of the client?
The devil is in the details, and no two client matters are exactly alike. The attorney has finite time in the day and must be able to devote as much time as necessary to address the needs of each client, not just giving perfunctory attention to the matter because of an excessive client load.
Does the attorney have a specialized practice?
In my experience, attorneys who "do it all" that is litigation and all areas of practice, divorce, estate and trust, tax, patent, securities, etc., may not be as well-versed in a specific area as is required in business matters.
Has the attorney ever been brought before the Bar for misconduct?
While there are times when bar complaints are erroneous and are brought by disgruntled clients, it would be important to know the circumstances for full disclosure.
Does the attorney have professional relationships with specialized counsel?
This is important so that the attorney has access to the most accurate and up-to-date information in a specialized area of the law, either in their firm or through the attorney's relationships developed with such counsel.
What is the best way a small business owner can protect personal wealth and assets from business risks?
The best way a small business owner can protect their personal wealth and assets from business risks is to structure a business form that insulates the owner from business debt, such as utilizing the corporate form, which insulates the shareholders from personal liability. In addition, the business owner must hire a contracts expert to negotiate terms and conditions and structure provisions, which protect the business owner individually.
What specifically are small business owners most confused about when you first meet with them?
Small business owners are most confused about the necessity of having competent counsel at the inception of the business. While this sounds self-serving, a large number of my clients come to me after they have conducted business on their own, minimizing the need for counsel and after having paid a heavy price for it.
How can quality legal services help a small business grow?
Quality legal services help small business grow, because growth comes with minimizing costly business mistakes.
How can quality legal services help small businesses save money?
In the end, small businesses that retain counsel at the inception of their business and establish a mutually beneficial ongoing relationship allows for the creation of business strategies and agreements, which mitigate costly litigation or losses due to unwittingly binding the businesses to a myriad of bad contracts, which permeate the business.
How can small businesses maximize the value of their legal team’s services?
A small business can maximize their legal services by entering into long-term relationships with counsel. If the small business is committed to its overall success, it must be willing to commit the time and resources to establishing these relationships. Much of my work addresses after-the-fact issues when I am requested to undo or resolve matters, which could have been avoided if the small business had committed to the retention of legal services and budgeted the funds at the outset. A business will pay fewer legal fees in the inception of its business or a lot after the fact.
Should business partners have the same amount of equity in a company? Why or why not?
There must be a decision-maker in a business. If partners want an equal interest in the business, they must have an independent mechanism for breaking a tie, so the business can move forward.
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. Determine why the business is for sale.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
It is essential that a small business budget for and retain counsel and an accountant at the inception of their business if the small business owner is committed to the overall success of the business.