How Much Will a Business Lawyer Cost?
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What Will It Cost to Start a Business?
Starting a business is an exciting prospect. It is also not something that should be taken lightly, and it would be in most business owner’s best interest to consult with a legal professional before signing business documents or entering into contracts. Every business is different, and what it will ultimately cost to get one off the ground will depend on several factors in addition to attorney’s fees.
What Factors Cause the Costs of Starting a Business to Vary?
The three main factors that cause the cost of starting a business to vary include:
- Type of Business – This is not to say a small business is necessarily less expensive to set up or maintain than a multi-national corporation. Instead, how the business incorporates, the nature of the business’ goods or services, and where the business is located will all play a huge role in fees, taxes, and liability insurance.
- Self-Help – There is a common misconception that self-help will keep costs down. To the contrary, it is more likely that self-help to ultimately result in more work for a lawyer to do; between correcting any initial mistakes, and ultimately assisting their client reach their initial goals, it is not uncommon for legal fees to be much higher where self-help forms have been used.
- Type of Legal Relationship – Whether a business hires a lawyer on a contingency fee and hourly basis, pays a flat fee or retains them as in-house counsel will ultimately make a huge in the overall cost of representation.
What Goes into Determining a Lawyer's Fees?
With business lawyers, their cost will be largely determined by their experience and where they are located. One can expect to pay less for a new lawyer in a rural area than a veteran attorney in a major city.
As mentioned above, another big consideration in the overall cost of the lawyer is how they bill. Generally, business lawyers either bill through a flat fee or by the hour. If a lawyer charges a flat fee, it is likely the lawyer will only be offering to handle a straightforward matter, such as incorporating or filing for intellectual property protection. For a flat fee, expect to pay anywhere between $800-$1,500. With an hourly fee, it is not uncommon for legal bills to quickly get into the $10,000 range. However, all things considered, for the amount work done it may also ultimately wind up being less pricey than a flat fee arrangement.
Why Would a Business Lawyer Charge an Hourly Fee?
A business lawyer will likely charge by the hour if the business requires several services, such as a filing the articles of incorporation, handling the tax matter, filing for trademarks or other intellectual property rights, and redlining contracts and business agreements. As mentioned above, if a business were to pay what a lawyer charges as a flat fee for these services instead of the lawyer’s hourly compensation, the bill may be considerably higher. Hourly rates will vary greatly, depending on the relative ability of the lawyer. Expect to pay $100-$500 an hour for a lawyer’s time.
A lawyer who works on an hourly rate may also require the payment of a retainer. This retainer will cover a certain amount of that lawyer’s time. After the retainer is expended, a standard - or potentially discounted - hourly rate will apply.
Is One Fee Structure Better than Another?
The best billing structure is the one that works for the client. Business lawyers understand this. Thus, their fee structure may vary depending on the needs of the client. Nonetheless, it is always best to understand what you are paying for. Asking your lawyer about why they bill the way they bill, and the easiest way to get clear answer about how they plan to use their time to best serve your interest and the interest of your business.
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Last Modified: 08-13-2014 10:58 AM PDT
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