A business attorney is an attorney that provides legal services concerning the operations and regulations of businesses. Business attorneys handle various legal matters, but most commonly they:
- Assist with buying and selling a business;
- Filing incorporation documents; and
- Drafting and reviewing business contracts.
- Business formation;
- Business disputes;
- Conflicts involving the sale and purchase of stocks and other securities;
- Compliance with business regulations and laws;
- Improper use of protected business information, such as copyrighted and trademarked materials; and
- Interstate and international legal issues, such as the transportation of goods.
Business attorneys represent several many different types of clients, including business owners, employees, insurance agencies, and other parties.
You may find yourself in need of a business attorney to advise and assist you in dealing with laws and regulations concerning your business. For new and startup businesses, a business attorney can help you lay the legal foundation for your business, as well as provide you with advice on how to use the law to protect your new business.
If your business is established, they can make sure any mergers or acquisitions go smoothly with limited complications, or navigate any complicated compliance issues you may be facing.
The most common fee structure utilized by business attorneys is the hourly fee structure. Hourly billing is used for nearly every legal service, with the exception of personal injury cases and routine tasks. The amount an attorney charges per hour is based on several factors, including:
- The amount of experience the attorney has;
- The complexity of the case; and
- The average hourly rate in your community.
Typical hourly fees range from $150 per hour to $325 per hour. Hourly fees can vary widely based on the factors previously mentioned, with larger markets such as San Francisco likely demanding higher hourly fees than smaller towns. Additionally, more experienced attorneys will likely demand a higher hourly fee as opposed to a less experienced attorney. If the issue goes to trial, litigation work can incur higher rates, as can complex work such as mergers or acquisitions.
It is important that when consulting attorneys in order to choose one to take your case, you discuss their fee structure as well as clarify what their hourly fee is if that is the agreed upon fee structure.
An attorney will generally work out how their fees are to be paid when they first meet you. A standard fee arrangement will require you to fill the attorney’s retainer, which provides a set amount to the attorney that they may draw from for their first amount of work. Any subsequent work would incur the agreed upon standard hourly rate.
Something else to consider when agreeing to an hourly fee structure is whether any other staff, such as secretaries or paralegals, will be working on your case in addition to the attorney, as their time may be added into the overall cost. Further, out of pocket expenses as well as other costs incurred by the attorney are often billed in addition to the hourly rate.
Not all business attorneys utilize an hourly fee structure, as some prefer a flat fee. Business incorporation, LLC formation, drafting employment contracts, and reviewing business contracts are some examples of the many business services some attorneys will perform for a flat fee. For example, a flat fee for forming an LLC in California can range from $500 to $2,000.
A flat fee is generally only offered if the case is relatively simple or routine. With a flat fee arrangement, fees to any third parties are not typically included, and you must pay them separately. Thus, while you may pay your attorney $500 for an incorporation, you will owe an additional fee to the state in which you are incorporating.
Recently, some startups and new businesses have been offering to compensate their attorney with equity in their new venture, as opposed to providing monetary payment. While this arrangement is allowed under legal ethics, it is likely a risky bargain for the attorney. Because of this, many attorneys will not consider or agree to this sort of payment arrangement.
Again, with any type of fee arrangement, it is important that you ask what costs and other expenses will be covered by the agreed upon structure.
Which fee structure is best is whichever structure works best for the client. Business attorneys are sensitive to and aware of the needs and limits of a business, and want to ensure that the client gets the most for their money.
Attorneys prefer to establish relationships with their clients, so they have a higher client satisfaction and retention rate. An attorney meeting a potential client may be flexible on their fees and how they are paid.
As previously mentioned, although some business matters will incur a flat fee, most business attorneys utilize an hourly rate. In order to keep these hourly costs low, there are a few things you as the client can do to get the most out of your money:
- Try to ask as many questions as possible, in as few hours as possible. Unless it is truly an emergency, it is best not to call your attorney every time you think of a new question. Attorneys billing by the hour will often start a new hour every time they must answer the phone. While this may not sound fair to the client, a good attorney will be working on multiple cases which can complicate organization when multiple clients call at once. A good attorney deserves to be compensated for ALL of their time spent working on your case;
- Use email whenever possible and appropriate. This ensures that the attorney will not need to respond immediately, and will give the attorney more time to thoroughly research the answers to any questions. Charging emails by the hour is not common; or
- It may be worthwhile to attempt to negotiate the hourly price with the attorney. There may be some rate flexibility, which can save you a good bit of money in the long run.
Although a business attorney may seem like an unnecessary expense if you are not experiencing any disputes, especially to new or startup business, they will be invaluable in establishing a firm legal foundation for your business. Additionally, they can assist in more complex matters as your business grows and your needs change. A skilled and knowledgeable business attorney will also represent you in any necessary litigation.