Choosing a lawyer to represent your business interests is not a decision to be taken lightly.
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Think about all the situations where entrepreneurs may need help from a good lawyer:
- choosing a business structure
- signing contracts
- obtaining financing
- negotiating a lease
- hiring employees
- sharing equity with employees
- doing business in areas involving heavy government regulation
- protecting intellectual property
- dealing with litigation
- acquiring another company
- selling your company
- going out of business
Tips for Selecting Lawyers
When hiring a lawyer, here are some considerations that will help you to find the best lawyer for your needs:
- Hire a Specialist. A lawyer that is adept at helping you to raise venture capital may know nothing about helping you to negotiate a lease. For any legal need, compile a list of lawyers specializing in that area and then select the best lawyer you can find.
- Get Referrals from Friends. Talk to friends and business peers for referrals in the legal area you need. Back in our entrepreneurial days, we were raising our first round of venture capital and needed a lawyer. We asked a good, experience venture capital friend these questions: "What lawyer do you hate to go up against? Who in town ends up getting the best deal for the entrepreneurs?" We got a great referral and hired a pit bull of a lawyer who did very well for us.
- Don't Buy Legal Knowledge Only. Remember that a lawyer can be a valuable conduit to wire you up with venture capitalists, customers, partners and others. Don't simply choose a lawyer that knows the law -- choose a lawyer that can add value to your business.
- Understand Fee Structures. It's good to ask your prospective lawyer how much things cost and who will do the work. Lawyers are under the gun to be billable, so it's good to monitor them closely to be sure they don't overcharge you. Know how much you are willing to pay. The best lawyer at the best law firm in town may cost $500 per hour - perhaps you could do better somewhere else.
- Fire Your Lawyer If They Don't Perform. Don't rely on one lawyer for everything. It's best to have relationships with a few different lawyers and let them know that you have options. If they don't perform well at a decent price, you will move on.
- Use Your Lawyer Intelligently. Many entrepreneurs overspend on legal fees because they let their lawyer do everything. To save money on legal fees, it's a good idea to do some of the work yourself. Draft a contract and then have your lawyer improve on it, rather than have them do it all. These days, you can find sample contracts and agreements on the Internet. IPO filings, which are public record, are a great source of sample contracts, for example.
- Hire a Smart Lawyer Who You Get Along With. The bottomline? You need a smart lawyer who will work hard on your behalf and execute all assignments in a prompt and efficient manner. You also need a lawyer who you get along with and like. Don't hire a mediocre lawyer, unless you want your business to suffer.