Ways to Save On Startup Legal Fees

If you're starting up a business there will come a time when a good lawyer will be your best friend. However, that doesn't mean you need to utilize their bill-by-the-minute services for every legal decision you make. There are ways to avoid legal fees. Consider these options:

Go Boilerplate

If you've ever signed a renter's agreement for an apartment you were probably using a boilerplate contract. This is a template agreement already drawn up by a lawyer and is readily accepted by both sides. You might find that many of business contracts can use boilerplates that are available for free on many online legal resources sites. These contracts can include:

• Commercial building lease agreements
• Employee contracts
• Vendor agreements
• Non-disclosure agreements

Just because you're using a boilerplate contract doesn't mean you can't put in your own terms, dates and names. That's what these contracts were created for. Here's a dirty little secret: You know that expensive lawyer you hire to write up your contracts? They use the same boilerplates. You didn't think they wrote every word of a new contract did you?

Ask For a Fixed Fee

Much like the boilerplate contracts, there are also boilerplate services. Filing for a trademark or setting up a corporation are pretty much routine. The only changes that are made are the names in each of the contracts.

Does this mean you should be paying a lawyer by the hour to get those papers in order?

Not at all.

Ask around and see if you can find a lawyer to handle those kind of for a fixed fee. That means whether it takes them two or 20 hours it will only cost you one price

.

You could also offer stock options in exchange for legal services. The caution with that is giving away too much for the kind of "simple work" mentioned above. Your new investors might not be happy about that.

And, if you want to avoid hiring a lawyer for basic corporate services, consider using a document filing service (like CorporationCentre.ca!) to submit your paperwork at a much smaller fee than a lawyer may charge.

Part-Time Lawyer

You might find that after your initial start-up filings you don't need a lawyer all that much. However, you're now stuck paying a hefty monthly retainer to a law firm. Not a wise move.

Instead, look for a firm that can provide you with a part-time attorney. This is someone you can talk to once a week for a reduced fee. Save up your questions and make that weekly meeting count. You can also look into legal insurance. You pay a small premium in exchange for getting a lawyer only when you need them. That's a lot less than the big retainer fee.

If you should ever come across a complicated issue with taxes or find yourself being sued then you don't want to turn that into a DIY legal matter. Get a good lawyer on your side. For everything else, look for flexible options from your legal firm.

Finding the Right Small Business Lawyer

You need a lawyer. By now you've already embraced that fact as a way of moving your company forward. However, you don’t know how to find the right small business lawyer for your needs. Obviously, asking a friend or business associate for a referral is the best first step you can take. Just because someone you trust recommends an attorney, doesn't automatically mean that attorney will be a perfect fit. Here's what you need to think about when interviewing potential business lawyers:

Fees: Clearly, you need to know how much your new lawyer is going to cost you. Will there be a fixed retainer or will they bill you by the hour? Is every quick phone call going to cost you big bucks? Yes, you should look for fair rates but keep in mind that a lawyer with a hefty hourly billing rate might be a better investment. That's because with experience comes higher fees. That experienced lawyer can finish an assignment in a couple of hours while the new lawyer might take several days. What would you be saving then?

Attention: As a small company you might have small issues to deal with at first. Will your new lawyer devote the same level of attention to your concerns as they would to a bigger company? They'll probably tell you that won't be a problem. Yet, if you discover you're not getting the attention you need then it might be time to change it up.

Return Call Rate: Coinciding with the amount of attention you'll receive will be the return call rate. How fast will your lawyer get back to you? If you're waiting a day or more then there are some problems you need to work out.

Patience: You're not a lawyer otherwise you could handle your own matters. Will your new lawyer have the patience to explain the legalese to you? You should never feel like you're asking silly questions and your lawyer should have the ability to walk you through complicated contract issues.

Focus: You'll be able to tell a lot about your new lawyer by the way they handle that first interview meeting. Are they constantly being interrupted by calls? Are they checking their Blackberry for emails? If they can't focus on a simple meeting how do you think they can handle the big stuff? Are you being too demanding asking for their undivided attention? Absolutely not. That's what you're paying for.

Excitement: You're not going into business with your lawyer but that doesn't mean they can't be passionate about what you're trying to accomplish. Are they excited to work with you? They should be! 

How to Reduce your Legal Fees

As professions go, lawyers are probably among the most maligned out there. You definitely want a "barracuda" on your side but the moment an attorney starts serving you papers they become the bane of your existence.

If you're in business, you need a lawyer. Hopefully it will only be for the start-up and lease negotiation process and not defending you in a lawsuit.

Even with the simple contract work, legal fees can take a huge chunk out of your bottom line.

How can you reduce your legal fees? Consider these ideas: 

1)  Be clear on what you’re paying for

Before entering into any arrangement with a lawyer you should understand their billing practices. Instead of billing for every piece of work on an hourly basis, your potential attorney could work on a flat fee. This is a good arrangement especially if you are looking for contract review and not a lot of back and forth "fixes."

Understanding what you're paying for also means going over your bill every month. If something doesn't look right, ask your attorney for clarification.

Make sure to keep track of your own contacts with the lawyer to compare with the bill.

2) Think before you call or email

Having a lawyer at your disposal is a bit like living with a doctor; you just can't resist the urge to ask about every question that pops in your head. Just know that with a lawyer you're going to be billed for every phone call and email that you send.

Even if it takes them 30 seconds to respond, they're going to charge you at least a quarter of an hour.

All of this means to plan before you communicate. You might be able to answer your own question and save yourself some bucks.

3) Do some of the work yourself

Always keep in mind that lawyers will bill for everything. Reduce costs and time by making copies and delivering documents on your own. Also, try to respond in a timely manner whenever your attorney requests information. If they have to keep reminding you to submit something, that will be another charge.

4) Don't hesitate to shop around

Nurture a great working relationship with your lawyer. It could make all the difference. However, if you find them doing the kind of basic work that any decent attorney could do, you might be well advised to shop around. Find out what other attorney's are charging. Ask your friends who they use. Remember that the lawyer is working for you!