Below is Nance’s full submission to Urban Freedom Magazine regarding how to choose a lawyer when you have a startup budget:
- Lawyer Retainers. You don’t necessarily need to tie up your operating funds with a lawyer retainer. Many attorneys who have experience working with startups and small businesses will work with you on an as-needed basis and charge you for occasional consultations, when those are most appropriate. For larger projects, you might pay an hourly rate, or you can negotiate a flat fee in some cases. Start developing a relationship with an experienced small business attorney early, so you have someone to call when you hire your first workers, are considering outside funding, land that great contract, etc. We are trained to issue-spot and help you minimize the impact of entrepreneurial risks, so we will often see vulnerabilities before you do, and we can help you create an action plan unique to your business, timeline, etc.
- Legal Document Providers. Large-scale services can be useful for business owners who have a lot of experience with business formation, contracts, and other transactions that don’t require a lot of unique, personal touches. If, however, you’re relatively new to running a business or are operating in a new industry or state, you might want a more customized approach. I often negotiate reductions in penalties assessed against small businesses who, for example, purchased “standard contracts” for independent contractor relationships and didn’t know there is a very narrow definition of “independent contractor” in New York State. They misclassified their workers, failed to provide workers’ compensation and disability insurance, failed to pay overtime wages, failed to pay for sick or family leave, didn’t comply with the Freelance Isn’t Free Act, and now owe huge penalties and interest to the state. Likewise, I have mediated disputes among startup owners who used a large-scale provider for their business formation, but they didn’t complete the by-laws or operating agreement. When opportunities for outside funding arose more than a year later, the owners couldn’t agree on their respective shares, and they almost lost the opportunity to grow the business, as well as the business itself and the close relationships that inspired it. Think of it like the difference between buying on Amazon, versus your local bookstore. There are sometimes you want or need the personal touch. Choose accordingly.
- Costs. Lawyer fees will vary greatly. Some law schools and bar associations offer low-cost or free clinics. In some areas, there are subscription services and flat-fee options, as well as attorneys who charge by the hour. The rates of attorneys charging by the hour vary greatly, too. In small towns or mid-sized cities, attorneys might charge $200.00 to $300.00 per hour. Attorneys who operate in metropolitan areas, have large firm experience, and got degrees from expensive universities will probably command higher fees ($450.00 per hour and up in Manhattan) and might not provide you anything different from what the graduate of a state school provides. All of us practicing in the state in which you are operating presumably passed the same bar examination, have the same license, and abide by the same laws. So, shop around for someone who can provide you the services you need within the budget you have. Don’t screen solely on price. Ask about experience with service versus retail businesses, the size of most of the firm’s clients, the most interesting business they’ve worked with (not the name of it) and what they did for it, what they think are the biggest legal challenges for businesses like yours, and more. Choose someone you feel comfortable sharing your secrets and financial reports with. There will be times when you need to confide things that embarrass you, and you’ll want an attorney who can be honest, clear, direct, non-judgmental, and result-focused, regardless of the circumstances.
- Interviewing Each Other. During your first meeting with your chosen lawyer, you should expect your concerns to be addressed. We might know the law better than you, but you know your business better than we do. So, we should be listening to what you think you need and why. From there, we will ask questions about your business structure, your products or services, your vision and current goals, your workforce plan, and other unique needs. We will discuss the risks you need to be aware of and steps you can take to insulate yourself. We will probably review your formation documents and ask about your record-keeping, so you don’t lose the separate entity treatment you sought for personal protection. We’ll be screening you, too, to make sure we are the right fit for your needs or have access to attorneys and resources that meet the ones we can’t. We’ll be considering how well your business and our firm will work together in a strategic legal partnership. We hope this will be a good fit for everyone involved, but we have ethical obligations to point you in other directions, if we don’t think we have the appropriate competence. So, you can relax. It’s rare that we match our negative public image.
Click this link to read the final version and the complete issue on Business Transformation.
Urban Freedom Magazine is an Independent Media Company geared towards entrepreneurs, creatives and startups to provide inspiration, information, and motivation in the advancement of personal growth as well as community economic advancement. We are on a mission to provide proven wisdom to unconventional creatives, entrepreneurs and goal smashers seeking practical business knowledge. Interviewing industry leaders to provide experiential insight into all areas of business.
Nance L. Schick, Esq. is a New York City attorney and mediator who focuses on keeping people out of court and building their conflict resolution skills, especially in business and employment disputes. Her holistic, integrative approach to conflict resolution draws from her experience as a crime victim, human resources supervisor, minor league sports agent, and United Nations representative. She is a 2001 graduate of the State University of New York Buffalo Law School trained in Alternative Dispute Resolution (ADR) by the Equal Employment Opportunity Commission (EEOC), Financial Industry Regulatory Authority (FINRA), and International Center for Ethno-Religious Mediation (ICERM). She is also creator of the Third Ear Conflict Resolution process, author of DIY Conflict Resolution: Seven Choices and Five Actions of a Master, and an award-winning entrepreneur, who has been acknowledged by Super Lawyers (ADR, 2018 & 2019), the New York Economic Development Corporation/B-Labs (Finalist, Best for NYC 2015 & 2016), U.S. Chamber of Commerce (2015 Blue Ribbon Small Business), Enterprising Women Magazine (Honorable Mention, 2014 Woman of the Year awards), and Urban Rebound NY/Count Me In (Finalist, 2013 Pitch Competition).