A startup lawyer is an essential partner to a new business, making sure you’re in compliance with applicable legal business/industry requirements and preventing legal problems that could hurt your business down the line.
The important thing is to find someone who meshes well with your business and understands the needs of your industry. Here’s how to find a great startup lawyer who can support you and your business in those crucial first years.
Where to find a startup lawyer
Many small-business owners think of hiring a business attorney only after they’ve been sued or in response to a legal problem. However, it’s best to be proactive about finding a lawyer and identify lawyers who can help you before you ever need them.
Here are four ways to find a startup lawyer:
1. Get a referral from a lawyer who has helped you with personal legal matters
Do you love the lawyer who drafted your will or helped you with that personal injury lawsuit a few years ago? If there’s a lawyer you trust who has assisted you with a personal legal matter, then ask him or her for a referral to a startup lawyer. Good lawyers typically know other good lawyers.
Just be sure to make it clear that you need a lawyer who is experienced in helping new businesses get off the ground. Some lawyers identify themselves as business attorneys, but they may be more familiar advising mature businesses. Startup lawyers are equipped to handle the complexities involved with launching a brand-new business.
2. Attend business events & conferences
Startup incubators, industry conferences and business meetups are other great ways to find lawyers. The best startup lawyers are often invited to speak at or attend these events.
Just keep in mind that you shouldn’t ask for legal advice at the event. You’ll need to make an appointment with the lawyer to discuss your business and your particular needs.
3. Online legal directories & services
There are several online legal directories and services that give you access to legal help.
Fast online legal advice
Have a quick legal question? Just want to confirm the laws in your state? Many online legal services will let you consult with a startup lawyer over the phone or via email for a fixed fee. The fee is a fraction of the steep hourly rates charged by law firm attorneys.
We recommend LegalZoom or Rocket Lawyer.
LegalZoom has a Business Advisory Plan that costs $31.25 per month. For that price, you get:
Unlimited 30-minute phone consultations with a startup attorney on new legal issues.
Unlimited document review for documents up to 10 pages (extra fee for longer documents).
Unlimited access to legal forms that have been attorney-reviewed for accuracy.
Annual business evaluation to help you comply with legal requirements.
Rocket Lawyer has a similar membership program for $39.99 per month. Or, if you don’t want to sign up for a monthly plan, you can have a 30-minute phone consultation with an attorney for $59.99. The monthly plan includes:
Unlimited 30-minute phone consultations with a startup lawyer on new legal issues.
Unlimited online Q&A with attorneys.
Unlimited access to legal forms that have been attorney-reviewed for accuracy.
These sites also let you file business formation paperwork for corporations, LLCs and nonprofits.
Lawyer match sites
Services like LegalMatch and UpCounsel will match you to the best startup lawyers located near your business. These sites are a great way to find attorneys who can help you through complicated legal concerns.
You post a description of your legal issue on the site, and the site will match you with an attorney who is qualified to help you. The programs have pre-vetted the lawyers, so you can trust that they are good at what they do.
Online lawyer directories
Just need help sorting through the lawyers in your zip code? Try a site like Avvo, which hosts the largest lawyer directory online. You can sort through lawyers based on location, areas of expertise, years of experience and rating.
Each state’s bar association also usually has an online directory of lawyers who are licensed to practice in that state, and some have a phone number you can call to get a referral to a lawyer.
4. Get referrals from other business owners
The final way to find a startup lawyer is simply to ask fellow business owners. These include business owners you personally know, as well as owners on forums or online groups.
Personal referrals sometimes will score you a free consultation or a discount on the lawyer’s standard rate.
Questions to ask before hiring a startup attorney
Okay, so you’ve used the tips above and have a short list of startup lawyers. Here are seven questions you should ask to find a startup lawyer who can advise your business:
1. How much experience do you have with this specific area of law?
The main question you should ask your lawyer, of course, is how much experience they have in the specific area or areas of law that you’ll be needing help with. For example, if you want a lawyer to help you decide how to structure your business, someone who has advised thousands of businesses on this topic will likely be more appropriate than someone who has just dabbled in this area of law.
There are a few areas where it’s particularly wise to consult a startup lawyer with specific expertise:
Taxes: If you want legal advice on your business’s tax situation or tax consequences, you should hire a commercial tax attorney.
Intellectual property: You’ll want to hire an IP attorney if you’re interested in securing a trademark, copyright protection, a patent or otherwise protecting your business’s IP assets.
Real estate: If you’re looking to purchase a commercial space for your business, it’s a good idea to hire a commercial real estate attorney.
Litigation: If you’ve been sued, you’ll want to hire a litigator who has experience with mediation, arbitration and litigation in court.
Law is all about applying the law to the facts, so experience makes a lawyer more adept at handling unexpected scenarios or complicated circumstances. If you have a legal issue that may end up in federal court, it’s also wise to check if the lawyer is licensed to present cases in federal court.
2. How much experience do you have with my industry?
Businesses in different industries are subject to different rules and regulations. Healthcare businesses, manufacturing businesses and child care businesses are some examples of industries with legal requirements that go above and beyond the norm.
Choosing a lawyer who has advised businesses in your realm will ensure that nothing gets missed and that you’re in compliance with all laws.
3. What is your fee structure and rates? Do you offer a free consultation?
The cost of a startup lawyer can range anywhere from a $50 fixed fee on an online legal service to over $1,000 per hour for a senior partner from a prestigious law firm.
Cost can be a major deterrent in hiring a startup lawyer, so it’s important to find out upfront how much you will be expected to pay your attorney. The following factors will affect your cost:
Size of the firm.
Attorney’s experience and seniority.
Your business’s industry (businesses in more regulated industries, such as healthcare, will be levied a higher bill).
Complexity of your business’s legal situation.
Time it will take to complete the work.
Some lawyers offer a free initial consultation during which you can introduce your business and evaluate if the lawyer is a good fit for you. During the consultation, the lawyer should give you an overview of how they plan to help your business.
Apart from the initial consultation, find out how the attorney will bill you. Some charge a flat fee for a certain project. Others charge an hourly rate. For litigation, some attorneys charge on a contingency basis, which means that you only have to pay if there’s a positive outcome in your case (contingency fees usually don’t apply to business cases).
Before the lawyer starts working on your behalf, make sure you have a fee agreement in writing and that you understand everything in it. If there are typos or confusing language in the fee agreement, you may want to think twice about hiring that attorney.
4. Who else is on your team?
Unless you’re working with a lawyer from a solo firm or a very small firm, chances are good that others in the lawyer’s office will handle your business’s information. These may include junior partners, associates, paralegals and legal secretaries.
If multiple people are involved, it can increase the time it takes to handle your case and, subsequently, can increase your final bill. So, make sure you understand what work the lawyer will do and what work the lawyer will delegate.
5. What’s the timeline for this work?
Find out if the lawyer can be responsive to your business’s timeline. For example, if a lot of money is riding on completing a joint venture with another company, make sure the lawyer can act fast to negotiate the joint venture agreement. The lawyer should be able to give you a clear expectation in advance of how long it will take to complete the work involved in your case.
6. How will you communicate with me?
Make sure the lawyer you’re working with is easily able to reach you and vice versa. Your lawyer should know your preferred method of communication — phone or email. They should also have an awareness of your day-to-day business responsibilities so that they aren’t calling you when you have a floor full of customers.
Most legal correspondence is online these days, so you should also ensure that you have a good internet connection for reviewing and signing documents electronically.
7. Do you have any conflicts of interest with representing my business?
Before retaining an attorney, check if they have represented any competitors, ousted employees or former business partners, all of which could create a conflict of interest. If this is the case, you may not feel comfortable sharing confidential information with the attorney and should hire someone without conflicts.
When you need a startup lawyer
A good startup lawyer is more than a lawyer. They are also a close advisor and confidante as you’re trying to grow your business.
Here are some of the important steps that startup lawyers can help you with:
Deciding how to structure your new business.
Creating employee agreements.
Raising venture capital and seed funding.
Negotiating partnership agreements.
Negotiating a joint venture.
Applying for trademarks, copyrights, patents and other intellectual property protections.
Securing commercial space for your business.
Navigating tax laws and understanding the tax consequences of certain decisions.
When you don’t need a startup lawyer
There are some straightforward things that you typically don’t need to consult a lawyer about, unless you have special circumstances or run into issues on your own.
In the following situations, you can usually forego the cost of hiring an attorney and handle the matter on your own:
Obtaining a business license: Only businesses in certain regulated industries, such as child care or food service, need business licenses. Your state or locality should have a website that outlines the process for obtaining a business license.
Incorporating a business: You can quickly file incorporation paperwork or start an LLC or nonprofit with an online legal service like IncFile, LegalZoom or Rocket Lawyer. However, a lawyer can help you decide which business structure is best for you.
Obtaining a business loan: Your loan specialist, lender and accountant can typically walk you through everything you need to know when closing on a business loan.
Finding a legal form: If you need to track down a specific legal form, legal websites like LegalZoom or Rocket Lawyer should have you covered — or you can get the form for free from government websites. However, if you need help negotiating a contract or understanding a particular provision of a legal document, that’s where a lawyer can help out.
Getting an employer identification number (EIN): If you’re a corporation or plan to hire employees, you’ll need an employer identification number (EIN). It’s free and easy to get an EIN online, so save some money by doing this on your own.
Hiring employees: An HR professional or HR software can walk you through hiring your first employees and getting them set up on payroll. However, you should hire a lawyer if you’re sued by an employee or are facing a specific legal issue involving an employee.
A version of this article was first published on Fundera, a subsidiary of NerdWallet