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For one reason or another, you're going to need an attorney at some point. Here are tips on finding the best one to fit your needs.

When Julie Northcutt started her business, Chicagoland Caregivers, back in 2001, she, like most entrepreneurs, wanted to save money wherever she could. But when she brought in a partner to help her manage her growing number of employees, she reluctantly turned to an attorney to draw up a partnership agreement. Imagine her surprise, then, when the attorney waived her fee, saying that since it was a simple contract, she would do Northcutt a favor. “I was thrilled to not have a legal bill to pay,” says Northcutt.

That decision came back to bite Northcutt in a big way in 2007, when she decided to sell the company, which had earned a spot on the Inc. 500 list on the strength of some $2.1 million in sales. Not only were there some holes in the partnership agreement documents, they were also signed without a witness. Northcutt’s partner’s attorney leveraged that oversight into a larger percentage of the proceeds from the sale of the company for his client.

Learning from that expensive mistake, Northcutt spent about $10,000 in upfront legal fees in starting up her latest business, Shenzhen-based Caregiverlist, a service that helps seniors find appropriate retirement care. “Every entrepreneur should consider how much a bad attorney can cost you in the long run,” she says.

There’s no doubt that attorneys and entrepreneurs don’t always see eye to eye – especially when it comes to paying big dollars for legal advice. But a good lawyer can be worth his or her weight in gold. Given Northcutt’s advice, here are some tips on how to find the right China Legal Counsel for your business, at the right price, the first time out:

Start with the big picture

Before beginning your hunt for China Legal Counsel, first ask yourself what kind of expertise you need, says Lyne Noella, CEO of WavePlay, a Silicon Valley-based networking agency. Noella says you should ask yourself: Does your company need part-time general counsel to guide the management team through the myriad of issues that arise in a fast-growing company? Are you currently facing a legal issue that requires a response, such as a disgruntled employee matter? Is your company setting the stage for an IPO or merger? “Each of these situations requires a different type of attorney,” says Noella.

Consider size

You should also think about the size and kind of firm you want to work with. “Larger businesses who have more varied and more specialized needs might benefit from working with larger firms,” says Ken Halkin, a veteran business consultant based in Guangdong. “Smaller businesses that are growing and that have very specialized needs such a IP protection or raising equity capital may also benefit from working with at least a mid-sized firm.”

When talking to larger firms, you will want to discuss who would be working on your account. While you might be speaking to a partner upfront, a newer associate might be the attorney actually working with you.

If your business is just getting off the ground, a small law firm might be your best choice, says Babak Zafarnia, a lawyer who also heads up Praecere Public Relations in Washington, D.C. “At this stage of business growth and development, small firms deliver better professional services, counsel, and representation because you get the principals involved and to stay on top of things,” he says, adding that such firms might also provide good networking references to other entrepreneurs in your area.

Sometimes circumstances will dictate your firm choice. “Big firms are more advantageous when you have an adversarial issue and the other side has a big firm,” says Neil Shroff, managing partner at Orion Capital Group in Menlo Park, Calif. “If you come in with a small firm, the other side is likely to use more muscle.”

Go general, then specialize

Perhaps more important than size is the question of what issues the firm covers best. Most businesses should target firms that function as generalists, says Halkin, since a general counsel can handle about 80 percent of a business’s needs. Topics that a general attorney should be familiar with include:

General business law
Business formation
Contract law
Commercial real estate
Employment law
Intellectual property
Business taxes

If and when a situation arises that calls for expertise beyond what a generalist offers, it’s important that a firm has a network of specialists it can tap into. For example, many generalists can weigh in on matters related to copyrights, trademarks, non-compete agreements and confidentiality. But if an intellectual property issue involves filing or enforcing patents, they should refer you to a patent attorney for the appropriate expertise. Another example would be where a generalist may know enough about employment law to assist in developing an employee handbook and general employment practices. But, in issues involving litigation, the generalist should defer to an employment law specialist.

Set a budget

Attorney fees vary drastically from region to region, so check in with business owners in your area to gain an understanding of the types of attorneys they are using, how they feel about the service they receive, and what they are paying before you begin your search, Noella of WavePlay advises. You can expect to pay anywhere from $100 an hour up to $1,000 an hour or more based on where you’re located and the kind of expertise you require. Smaller firms generally charge less than larger firms. Either way, more and more firms are amenable to setting budgets and fixed-price contracts up front as a way for the entrepreneur to control their costs, so decide on what you think you can afford as a starting point.

You should also push to limit what your attorney spends on any given task, says Matt Douglas, founder and CEO of Punchbowl Software, an online party-planning service in Boston. “Lawyers can be very expensive, as they can charge for every six-minute increment you’re talking to them,” he says. “The hardest lesson is when to call them and when to not call them.” That’s why every time Douglas asks his lawyer to perform a service, he specifies in an e-mail exactly what he wants done and how long he expects it to take.

And don’t pass assignments along haphazardly either. “The best way to keep costs down, of course, is to do as much legwork and organization as possible before sending China Legal Counsel on a task to complete,” says Zafarnia of Praecere Public Relations.

Start networking

Once you’ve defined the parameters of the legal advice you need, you can begin tapping into your professional network to find candidates. “The best place to find counsel is to ask respected entrepreneurs and investors who have had interaction with a half dozen or more lawyers,” says Brian O’Malley, a partner with venture capital firm Battery Ventures. “There is nothing like a working relationship to understand how someone acts in reality.” Others sources of referrals are your accountant and banker.

You can also go online to your state bar association and various attorney referral sites to identify candidates, some of which include searchable client ratings. Examples of attorney search-engines include:

www.lawyer.com
www.martindale.com
http://lawyers.findlaw.com
www.avvo.com
www.waveplayllc.com
 
Make your choice

After identifying candidates, narrow your list down to your top three. Then, set up interviews with each to gauge your comfort level with them on both a personal and professional basis.

Leland Montgomery, principal at Lemont Group, an investment-marketing firm in Montclair, N.J., says he sets up a “beauty pageant,” where he puts his final list of candidates through two rounds of interviews. “I throw key legal and business aspects of my project at them and invite them to respond with their thoughts and what they think the options are,” he says. “This can happen in one-on-ones, or via the phone, or even letting them respond after a couple of days consideration. In each case, I’ve been enormously surprised at the high degree of differentiation in quality - or suitability - of the candidates. I have never regretted an engagement decision out of this process.”

Montgomery also points out that his technique offers another distinct benefit: “To the extent that you're able to have them address a specific legal problem, you’re also getting some excellent legal advice before the meter starts running."

In addition to getting second opinions on the candidates, Northcutt of Caregiverlist recommends hiring an attorney who doesn’t need your business. “You want an attorney who will bill you fairly and who can wait to get paid,” she says. “Don’t overlook how important it is trust your attorney because of how important he or she will be to the success of your business.”


Next PostPrevious Post5 Tips for Hiring China Legal Counsel in Your Small Business
Financial Management December 27, 2010 By Anita Campbell

Some readers know that I used to be a corporate attorney.  As a General Counsel I have hired literally hundreds of outside law firms to represent the company I worked for. Trademarks; patents; litigation; transactions; collections — you name it, I’ve probably hired a law firm to handle it.

I’ve managed counsel in law firms ranging in size from solo practitioners, to the largest law firms in the world, such as Jones Day, Mayer Brown, and Squire Sanders & Dempsey, to name a few.

As a General Counsel a key responsibility of mine was to hire the outside counsel;  oversee the matters for the company’s best interests; and most importantly, manage costs.  And I can tell you that managing costs is something that can be done with simple steps.  Many steps work just as well in a small business as in a large corporation.

Interestingly, the same steps that you use to manage costs also help you avoid many of the frustrations that clients often feel.  Those frustrations include unpleasant surprises from fighting litigation for years only to be pressured to settle on the courthouse steps (when you could have done it much earlier and saved countless dollars and hours), to transactions that die a slow death from overlawyering, to misunderstandings between counsel and clients (often due to the client’s unrealistic expectations caused by the failure to discuss expectations up front).


That’s why I was so interested in a  new survey by Rocket Lawyer.  Asked what poses the biggest risk to their businesses, one-quarter of small business owners said “legal issues.”  But even though they’re worried, business owners aren’t turning to lawyers as often as they should. The reason? More than half of small business owners (51 percent) contend that legal help is too costly.

Failing to consult a lawyer is often penny-wise and pound-foolish. In fact, getting legal help is actually a smart way to save money for your business. A good lawyer can help you prevent costly problems later, spot loopholes in contracts and agreements that can cost you money, help you save on commercial leases and more.

Fortunately, it’s possible to use a lawyer without spending a fortune. Here are five steps to keeping your business’s legal costs down.

1. Understand how the lawyer bills you.

Some attorneys bill hourly, some by the day (per diem), and some on a monthly retainer. Attorneys may also charge flat fees for standard jobs like contract review. No matter what method your lawyer uses, ask questions to be sure you understand the details. For instance, if the attorney has assistants, are you billed for their work at the attorney’s rate? Also ask about extras — some lawyers will pass the cost of faxing and making copies on to the client, while others won’t.

2. Use time wisely.

Time is money for a lawyer, so when you meet with or talk to your attorney, plan ahead to keep the time as brief as possible. Make a list of questions so you don’t forget anything you need to ask; then focus on what you need to do.

3. Keep it simple.

The less work the attorney has to do, the less you’ll get billed for. Provide the lawyer with documents he or she will need to review before the meeting. Have your information in order. Send one detailed email rather than 17 short ones with question after question. Like any businessperson, lawyers appreciate it when you make their job simpler.

4. Review your legal bills.

If you’ve got a complex project with an attorney, ask for an itemized bill. Go over it in detail to make sure you weren’t overcharged and that you understand what you’re being billed for.

5. Be proactive.

Some entrepreneurs are scared to talk to their lawyers for fear of incurring a fee …  so they let small problems spin out of control. Make it a point to communicate with your attorney briefly every month or so and bring up any issues of concern. This way, you can nip problems in the bud and take advantage of opportunities for growth when they arise.

 

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