Many small businesses shy away from using an attorney because they are
afraid of an attorney’s hourly rate. They are willing to spend hundreds
and maybe thousands of dollars on new computers, business memberships,
and office furniture, but avoid investing, a small fraction of that cost,
to protect the business’ new assets.
There are many things a business owner can do to reduce the amount that
they spend with an attorney.
Business consultation. Most states do not require that an attorney prepare or submit formation
documents or tax forms for the business. You may schedule an appointment
with the attorney to discuss the pros and cons of different business forms
and strategies. You may bring the prepared forms with you for the attorney’s
review and get their feedback prior to submitting them to the state or
national government. The attorney will require that you put the limitation
of her services in the fee agreement to protect her from malpractice.
Annual legal review. Many businesses have legal audits done a month before their company’s
annual meeting or the end of their tax year. This can uncover omissions,
mistakes and changes in law that will affect the business. It also can
help save money via tax planning. Some of the issues that can be covered
in a legal audit are business incorporation documents, employment agreements,
licensing and leasing agreements, insurance policies, standardized contract
forms, internal policy and procedures manuals, regulatory compliance (ERISA,
SEC), annual returns and annual filings. This legal review prevents non-compliance
issues and fines. It allows the attorney to review all of the pertinent
information simultaneously, thereby saving time. As the attorney grows
familiar with the company, potential problems are solved earlier and the
review is accomplished with increasing efficiency.
Be organized and brief. Before you call an attorney, have all of the pertinent legal information
gathered together. If possible, bundle several matters into one conversation:
formation, tax status, immigration. Lawyers are people. We like to talk
about the baseball game too. But when you are paying several hundred dollars
an hour, you may want to stick to just the matters at hand.
BEFORE committing to major decisions.
Your attorney will be far more effective and inexpensive if they are part
of the transaction before it is finalized. It much more difficult and
expensive to undo a mistake than to consult with an attorney beforehand.
These are just a few ways to reduce the costs associated with hiring an
attorney. Contact your attorney and work out a strategy to protect your
business and your bottom line.