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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Sample Consulting Contract (2-page Word document). A basic consulting agreement as a Word form - simply fill in your name, client's name, rate of pay, and effective dates. This basic document will protect both you and your client legally and be a binding agreement. Feel free to modify and add to this to suit your needs. (Note: I am not a lawyer, [read more]
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“The first thing we do, let’s kill all the lawyers.”
This statement from Shakespeare’s Henry VI was made by Dick the Butcher to his henchmen who schemed to overthrow the king of England but feared the honorable lawyers would get in the way of the planned coup d’etat.
While the statement may sound controversial, it was intended to eliminate those who threatened the contemplated revolution—thus underscoring the role lawyers play in upholding the rule of law and protecting the society.
Similar in the business world today, lawyers are your first and last line of defense against unscrupulous litigations. You’ll need a business lawyer to protect yourself against liabilities and legal consequences. That said, here a few things to keep in mind when hiring a company lawyer.
1. Bringing an Attorney Early in the Process Can Save You Loads of Time and Money
Most companies make the fatal mistake of putting off hiring a lawyer until a law enforcement officer is standing at the door serving them with the summons.
The right time to hook up a corporate lawyer is before you’re sued. Once you’ve been served with the summons, there is no going back. The damage has already been done and is just a matter of how much you’ll need to pay in damages and court settlement fees to get the case settled.
Keep in mind that the fee a lawyer will charge to keep you out of trouble is only a fraction of the fee they will charge to get you out of court. That said hiring a lawyer in early stages can help you eradicate the legal risks around the most common sources of business failures.
2. Lawyers Charge a Hefty Hourly Rate
The lawyers most companies will deal with are likely in the $300 – $800 hourly range, but this varies depending on the size and reputation of the firm.
A junior attorney in a small town or lawyers in training charge $100 to $200 per hour, while senior attorneys working in big law firms and major cities can charge up to $1000 per hour. The cost varies depending on many other factors, including the nature of the litigation.
That said, lawyers earn a median salary of $122,950 but the salary largely depends on the area of practice. For example, a patent lawyer nets an average of $129,500 while a real estate lawyer earns an average salary of $90,125.
3. Lawyers Can Increase Your Company’s Value
Aside from helping you minimize risks, a company attorney can also help you maximize value. For example, if you’re torn between starting an LLC or a C Corporation, a lawyer can give handy advice, including the special tax benefits that accrue only to C corporations.
A business lawyer can also add value by introducing you to venture capitalists and angel investors while serving as a legal adviser for your company.
Wrapping Up: When Do You Need Legal Software Solutions?
No discussion about hiring a lawyer would be complete without touching on the digital legal services, the likes of LegalZoom, and others.
After all, many legal documents such as wills, business registrations, copyright registrations, and transfer of deed paperwork can be filed without a lawyer. Online legal services seem like a viable option for entrepreneurs on a tight budget.
If all you need is a basic contract, it makes sense to avoid the hefty costs of hiring a lawyer in favor of the legal software solutions.
But if you’re dealing with issues of legal consequences, like sending menacing letters to non-paying customers or negotiating a lease agreement, LegalZoom won’t cut it here. In such cases, you’ll need to hire an attorney
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