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Hiring a lawyer for a small business can be a bit tricky, as many business owners struggle to find the right attorney and aren’t clear on when they should hire one. Your ability to protect your business and steer clear of legal issues is important for your business’s growth.

You need to learn what type of lawyer you’re looking for, how they should be compensated, and what steps lawyers are taking to ensure the best legal services.

Hiring An Attorney

Hiring the best attorney possible takes due diligence and considering different aspects of their work. It’s not just about a lawyer’s education but also success rates, areas of expertise, and how they handle cases.

The Right Time to Hire an Attorney

It is always more of an advantage to hiring an attorney as early as possible, but many don’t hire an attorney right away due to limited capital. It’s understandable to not have one right away from a startup, but the last thing you want to do is wait until there’s a problem.

A business attorney has the ability to prevent problems from happening in the first place and can advise you on future steps to protect the business.

On the flip side, our law firm has often dealt with clients who did not obtain a lawyer for whatever reason and now has a legal problem. Sometimes we are able to fix the problem, but clients need to understand that it will usually cost more to do so.

There are even times where a last-minute legal issue is financially impossible to fix. If the problem is too complicated, it may cost more to fix the problem than to just close the business and start over.

It may not be the financial aspect, but the actions of the clients prior to seeking legal counsel could prevent us from getting them out of the situation. They could have incurred a fine, breached a contract, or done something that leaves lawyers with nothing they can do.

Our firm hates to see these scenarios because oftentimes the issues could have been prevented if they sought legal counsel prior to making certain decisions. Here are a few things to consider when deciding to seek an attorney:

You May Not Need Them If You Can’t Afford It

Sometimes businesses are just trying to get off the ground. Many have consulted us about the proper steps in doing so. Usually, we can tell by initial consultation whether a business is ready for a lawyer. Now just because it’s unaffordable doesn’t solely give a business owner a reason to not get a lawyer. Other reasons in addition to insufficient funds can cause a business owner to not get legal help.

Legal Ducks Are Not In a Row

The IRS is more than likely not coming after a small business. Your local sheriff isn’t looking to penalize you for operating without proper licensing. This is mainly because most people don’t know your business yet. Hopefully, you have not done anything that can land you into a potential lawsuit. A lawyer can help you legally establish your business, but seeking an attorney isn’t your first step.

The Type of Business You Have

Keep in mind that there are some types of businesses that need legal assistance from the very beginning. Normally if the business requires licensing to legally operate or could be a business with a higher risk of something happening. If you were to open a business like a bar, it’s beneficial to get a lawyer initially because you’ll need licensing, permits, and significant insurance coverage to protect you.

You Need to Know If Your Business Can Make Money

If your business cannot produce an income, then having an attorney is the least of your worries. Before you invest the time, effort, and money into hiring a lawyer and building the legal framework for your business, you need to find out if there’s a need for your product or service. Can your business support your lifestyle, or at least provide some income on the side of your day job?

Ultimately, the reason for a business attorney is to reduce risks, protect assets, and increase profits. You won’t need a lawyer if your business cannot maintain assets or profits, or if the business isn’t exposed to any risks.

Niche Lawyers

When you interview attorneys to find the right one, make sure that you get an attorney that is experienced in business cases specifically. It is better for you to find a niche lawyer, who focuses on cases in a particular area.

There are some lawyers in Louisiana that identify themselves as business attorneys, but actually represent more than just business owners. The thing is they may not be as prepared as they should when representing a business. They may be great at litigation, but they fail to proactively guide the business owners around litigation.

Too many times we have seen an opposing attorney who is not a specific business attorney, hurt the client more than help due to lack of experience. We see this most often with personal injury attorneys taking on cases from business owner clients. They get into personal injury law because it can be lucrative, but the business owner clients they have are not prioritized and they suffer as a result.

Would you hire a foot doctor to perform open-heart surgery? Of course, you wouldn’t make that decision. The same should apply when choosing a lawyer. Don’t get a lawyer focused on bodily injuries than one that’s experienced in growing and protecting successful businesses.

Focus on niche lawyers and be sure to ask questions about their cases to highlight their area of expertise. Always ask potential lawyers the following questions:

  • What percentage of your work and your revenue is devoted to working with business owners?
  • Do you help clients with legal issues that have nothing to do with running a business, such as criminal or personal injury?
Proactive Vs Reactive Lawyers

Some clients we have don’t see an immediate need for an attorney. They don’t see much value in getting assistance with contracts and agreements. Nothing has gone wrong yet, so they don’t think they need a risk assessment. These clients feel this way because they only think of a lawyer being reactive.

A lawyer that’s reactive helps you in the event something has happened already. Some niche lawyers like divorce attorneys, personal injury attorneys, and criminal attorneys are supposed to be reactive. We all hope that we won’t ever need these types of lawyers but if something happens, we can hire them.

A business lawyer among others like estate planning attorneys is considered to be proactive lawyers. A business attorney helps build the foundation of a business before any issues happen. An estate planning attorney would help with organizing things in the event of your death. These are the lawyers that protect you before anything does happen.

Remember that a proactive lawyer for your business is more cost-effective than getting a reactive lawyer. Being proactive about your legal needs has its benefits:

  • You’ll have more time to shop around for the right lawyer
  • You’ll be able to build a relationship and trust with the lawyer you choose

But if you need a reactive lawyer, you are probably already knee-deep into an issue and may need the first lawyer to find. Trust us, some reactive lawyers will take advantage of your immediate needs.

Things to Consider About Lawyers Before Hiring

Business Handlings

Lawyers sometimes don’t practice what they preach. How can a business attorney help you grow your business if they cannot gauge their own? Ask them a couple of questions about their business acumen:

  • Do they have a business plan?
  • What financial reports do you review for their business every month?
  • Do they have a business coach?

Law firms are businesses also. Therefore if they don’t run their law firm like a business, they won’t be much help to your business. Would you hire a CPA who hasn’t file taxes in several years?

Malpractice

Attorneys are humans too, and they perform services just like other professionals where mistakes can happen. Lawyers can become liable when providing bad legal advice because they are licensed professionals for legal services. Now if a business owner consulted a non-lawyer and acted upon their advice, they are personally at fault.

Inquire if the lawyer has malpractice insurance and what their coverage is. Lawyers are not required to carry malpractice insurance in Louisiana. Some lawyers have chosen to operate without saving on insurance costs because it’s not mandatory.

The lack of malpractice coverage is a bad business practice and if a lawyer doesn’t have it, you may want to steer clear of that attorney.

If you have found an attorney that has malpractice insurance, you can request a copy of the declarations page of their policy. It’s a simple document that proves they have the insurance and how much their coverage is.

Reviews and Testimonials

What have others have to say about the lawyer you are considering for hire? Every business attorney should understand that testimonials are an essential component of any business. It shows that the lawyer knows how to keep their business running and create positive relationships.

We recommend using Yelp and Avvo for getting started. If the law firm has a website, then check their reviews page. Also, ask for referrals from other business owners if possible

Ratings and Recognition

If an attorney has been recognized by an accredited third party, then they must have been evaluated by relevant quality metrics. It should reflect some of the results the attorney has delivered for clients.

Platforms such as Avvo and SuperLawyers have ratings for lawyers also. Spera Law has been recognized by these platforms. Andrew Legrand has been on the Louisiana Rising Stars list for SuperLawyers from 2015 to 2018. This honor is reserved for the top 2.5% of attorneys in Louisiana. The annual selections are made using a patented multiphase process that includes:

  • A statewide survey of lawyers
  • Independent research evaluation of candidates
  • Peer reviews by practice area

Avvo has rated Andrew Legrand with a 10, on a scale of 1 to 10. This platform was created by a tech-savvy lawyer, who wanted to make it easier for people to find lawyers. Almost all lawyers in the United States are rated by Avvo. The platform offers millions of searchable legal questions and answers.

Special Training

Ask an attorney if there is any special training or additional experience they have that might benefit your business. Business law really isn’t taught much in law school. Although lawyers learn about the legal ramifications of operating a business, lawyers are not taught management, marketing, finance, production, or any other practical aspect of running a business.

Ask your potential lawyer some questions about their business experience:

  • Do they have a degree in business?
  • What are their favorite business books?
  • Are they involved in mastermind groups?

Most attorneys working with small business owners have an online presence. That will help will many of the questions one would have vetting from the right lawyer.

Paying Attorneys

When speaking with lawyers for a consultation, many wonder if the initial conversation will be free of charge. In many cases no but it really just depends on the issue. Our firm receives plenty of calls and emails from people looking for advice. They may not necessarily need full-time representation either.
Honestly, an attorney could spend 40 hours weekly providing this type of advice and make nothing if there are no fees incurred. A law firm obviously cannot run that way. If the person contacting us is seeking to conduct an interview rather than receiving legal advice, we’ll waive our consultation cost.

Our firm tries to base our costs on the value we can provide you, meaning we may not offer the same pricing to everyone. Startup businesses with limited funding and little to protect might be less than a growing multi-million dollar business. Those bigger businesses have needs that attorneys have to sometimes drop everything to come help.

There are several ways to pay an attorney for their services. A business owner’s specific needs help determine which payment method makes the most sense for them.

Hourly

This is the most standard way to pay lawyers. An attorney will provide an hourly rate and keep track of their time. Time is tracked in 1/10th (6 minutes) or 1/4th (15 minutes) hour increments.

Hourly billing can create an inherent conflict of interest. If financially incentivizes lawyers to spend more time on a matter, and be less efficient. Our firm prefers to avoid hourly billing unless it’s a method of last resort or if my client demands it.

Fixed-Rate

Flat rates are a preferred method at Spera Law for how we charge clients. It works best when there is a set scope of work that’s easily defined and a checklist of the work can be created and completed. There can be a difficulty when an opposing party throws a wrench into the calculation.

Generally, flat rates are paid initially upfront. Our firm will discuss the scope of work with you, provide a checklist of work to be done, costs (that can be sometimes broken down into milestones), and a total amount.

Our firm attempts to give you a price and payment plan based on the needs and budget of the business.

Contingency

Contingency fees are when the lawyer and client both expect to recover an amount owed. The fees collected by the attorney vary by case circumstances. Any costs will also be taken care of then the remaining sum goes to the client.

In addition to fees varying from case to case, they can also escalate within a case. What could start off at 15% for letter and email negotiations could turn into as high as 45% for the case going to trial and is appealed.

Understand that this fee gives the lawyer a higher incentive to do more for the client, but the lawyer is accepting larger risks. They know they are getting paid on an hourly or fixed-rate basis, but in a contingency situation, there is no guarantee for compensation.

Blended Rates

A blended rate is usually a combination of the three payment methods. It could be tricky to arrange at the beginning, but generally very effective at meeting everyone’s needs.

These are not the only ways of compensating an attorney either. Honestly, a lawyer could be paid in any way they are willing to negotiate. Maybe they could receive an equity interest in the company in exchange for work. Generally in Louisiana, as long as compensation is fair compared to the work done, there is no restriction on the method of compensation.

The best advice we could give is to normalize the costs of doing preventative maintenance instead of when something happens. It could save money to prevent a problem than to fix a problem.

Mistakes When Hiring an Attorney

Hiring the wrong attorney is single-handedly the biggest mistake you can make when it comes to legal business matters. Many people hire attorneys based on referrals or if they offer a cheaper quote. But problems arise when not hiring attorneys based on experience.

Our firm focuses on business law and we are often approached by business owners who had run into a problem looking to get out of it. Normally it leads back to one of two outcomes:

  1. They didn’t hire a lawyer
  2. They hired a lawyer who advertised themselves as experts in other areas

This goes back to understanding niche layers and working with ones that have experience in the issue a business owner brings forward.

The worst part of hiring the wrong lawyer is that the money is spent but the client did get the legal advice they needed. Sure, they might have received the legal document they wanted but is it protecting the business’s best interests?

The lawyer should be working on cases similar to yours about 80% to 90% of the time. Remember to ask questions about their case experience.

More About Spera Law Firm

Our firm offers several packages that we offer to small businesses. They are monthly general counsel packages that you can inquire about by contacting us. There are four packages targeted to different size businesses to help:

  • Reduce risks
  • Protect assets
  • Help increase profits

The Small Business General Counsel Monthly Packages are designed so the small business owners can have access to legal services are a flat monthly rate. Each plan includes:

  • Unlimited phone calls and emails
  • An annual legal checkup
  • Legal conferences
  • Custom legal documents
How We Measure Our Client Growth

Our firm uses the Net Promoter Score (NPS) rating system to measure customer experiences to help predict a business’s growth. We apply this system to our own client growth by asking one question:

How likely are you to recommend [Spera Law Group] to a friend or colleague on a scale of 0-10?

Based on client responses, we group the clients into three categories. Clients could either be classified as promoters, passives, and detractors.

Promoters
  • Rated the company 9 or 10
  • Loyal customers that keep buying
  • Likely to refer others
Passives
  • Rated the company 7 or 8
  • Satisfied but not enthusiastic
  • Vulnerable to competitive offerings
Detractors
  • Rated company 6 or below
  • Unhappy customers
  • Can do damage to business brand
  • Stunt growth by negative word of mouth

The simplicity of this rating system is why we continue to use it with our clients and our firm. It’s an easy and effective way to track business relationships.

If customers are classified as ‘promoters’ then a business can continue to do things as they have been. If customers are classifying as ‘passives’ and ‘detractors’, then adjustments need to be made.

Lessons From Andrew Legrand

Andrew Legrand is the founder of Spera Law Group and provides valuable advice through various platforms. Andrew started a solo practice during his second year of law school. He graduated from Loyola University New Orleans College of Law in 2011 taking his career into his own hands, noticing the dismal state of the legal job market.

MO.com Interview

Opening the law firm coming out of law school got the attention of MO. com and they conducted an interview where Andrew gave great advice. Here is good advice from that interview:

MO: What advice would you give someone who thinks that they need the advice of a lawyer but isn’t sure of how to start the process or even exactly what they need?

Andrew: There are several websites out there like avvo.com, which allows people to post questions and get answers from real attorneys. LegalZoom also offers attorney consultations for minimal fees. In the end, neither of these methods will be enough to actually solve the legal problem if there is one, but it will help you start the process. You will find out what type of attorney you need, or what you need to do.

MO: Do you anticipate virtual law offices to become a growing trend? If so, how do you think this emergence will impact the law industry?

Andrew: Yes, I do anticipate it as a growing trend. As lawyers begin to realize that they need to bring costs down, more lawyers will become interested in the virtual model. Also, as Generation X and Generation Y grow up and need legal services, they will be looking to get help online. Banking, communication, and nearly every other service is offered online, so why wouldn’t legal services be there as well.

Automating Law Firms

Andrew launched the firm virtually, but can still meet with clients in-person in the New Orleans metro area. He has been an advocate for finding ways to automate law firms.

Lawerfy is a New Orleans based company that believes technology should minimize time attorneys spend on routine tasks to increase value given to clients. The company creates tools that help lawyers easily manage client relationships and understand them better. They reached out to Andrew for an interview to get feedback on a product they created and how it better serves the needs of our firm.

Part of the repetitive tasks lawyers handle would be documentation. Common documents of law practice such as client engagement letters and routine filings. Andrew recommends that other law firms automate high frequency documents that way it just needs minor tweaks based on client needs. This concept could save time in any business so more focus is on the client.

Useful tools to automate documents:

  • The Microsoft Word’s Styles tool allows automatic formatting.
  • TextExpander (for MacOS) and Breevy (for Windows) are beneficial because they use keywords such as ‘xlaca’ to automatically change to the appropriate citation to Louisiana state law.
  • Dragon NaturallySpeaking offers fast and accurate dictation and transcription, advanced customization, and seamless integration across devices. The platform also has built-in recognition of legal terms.
Handling the Pandemic

Because Spera Law Group helps business owner clientele, Andrew provided some advice to business owners in New Orlean City Business. Legrand insisted that insurance companies have denied certain coverage related to COVID-19.

Employers face legal risks if they don’t have a plan in place to keep employees and customers safe. Both could allege they became sick because of the conduct of the business. A company could in turn say the plaintiff came into their store and assumed the risk of getting sick.

Andrew further stated:

“These lawsuits may say they went to a business and this business wasn’t providing masks and gloves, and their employees weren’t required to wear masks or gloves, and that’s how they got sick. It’s hard to prove causation with this because this isn’t like a car accident where you can clearly see one person rear-ended another person.”

When it comes to hiring the proper attorney for your business, you have to do due diligence and not just hire any attorney willing to take your case. We hope shedding a light on hiring attorneys and our firm’s practices helps provide some clarity to get the best legal services possible.

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