The ABCs of Business Attorney Fees

If you're looking to hire a business attorney, then congratulations are in order, because that is probably a good sign that things are booming.  But as you set off to find the right business attorney, you have to keep a few things in mind.  First and most importantly, if you're hiring a business attorney for the first time, you need to make sure you don't get ripped off.  This requires surveying the market to find out what the going rates are, deciding how much of your budget you want to allocate for legal expenses, and then selecting an attorney who fits within your budget.

Please note that when it comes to business attorneys, more money does not always mean more quality.  In fact, sometimes, the opposite is true.  Business lawyers at large firms charge insanely high rates, and they tend to specialize to a very narrow degree.  For example, a given lawyer doesn't just practice business law, nor does he specialize on a particular type of transaction or even a particular type of deal document.  Instead, a given lawyer might specialize exclusively on a particular clause within a particular deal document!  Granted, he's probably one of only a few hundred experts on that clause, but if your legal matter doesn't pertain to that clause, you don't give a rats ass.  You would rather have an attorney with a broader view of what's going on.  The point is, you shouldn't assume that more money means higher quality of service.

The next thing to think through is the scope of the engagement.  If you're hiring an attorney to perform a limited scope of services, you should search one way, but if you're hiring an attorney to be a long term partner and advisor in growing your business, then your selection process should be very different.  As an example, some people hire an attorney to form their corporate entity (LLC, corporation, etc), and they know, at the time, that they have no intention of sticking with that attorney for the long haul.  If this is the case, then it's perfectly fine to hire based on price and proximity (there are some caveats, which we will explain in a future article).  On the other hand, if you're looking to hire someone who you will view as a trusted advisor and who will grow with you as a business owner, that is a very different story.  It's the difference between searching for a provider of commodity legal services and searching for a true legal counselor.

The final thing that you should be aware of is the basics of how different services are priced.  For services where the attorney is able to predict, with reasonable confidence, the amount of time and effort that will be involved, attorneys will generally be willing to price their services on a flat fee basis.  Examples of this include incorporation, forming an limited liability company, and writing a partnership agreement.  By contrast, services that appear open ended tend to be priced on an hourly basis.  This is for good reason - if the attorney has no way of knowing how long the engagement will take or how much work will be involved, he would be ludicrous to commit himself to a fixed price.  Examples of this tend to come from contentious cases - disputes between founders, disputes between management and owners, disputes between company and stockholders, etc.

That wraps it up for Business Attorney Fees in a Nutshell.  In another article, we will put some actual numbers onto all of this to help you form a better idea of how much it will cost to hire a business attorney for your legal needs.

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