Top 7 Questions to Ask Before Engaging a Business Attorney

Selecting corporate counsel for your business is an important decision – having the right advisor in your corner, who is not only a legal expert and a qualified attorney, but a true “counselor” as well, can be a critical component in protecting and growing your business. For an entrepreneur, a new business is a little bit like a baby – it can be fragile and needs care, but given the right protection and resources, can eventually become something truly amazing. Here are a few questions that you should ask before deciding on who you want to represent your “baby.”

1. Generalist or Specialist?

You probably want a business attorney who is somewhat specialized. If your business is going to be making deals and contracts, you will want a deal lawyer; whereas if your business is going to be getting into disputes, you want a litigator.

If your business is heavy into real estate, you want a real estate lawyer (and if it isn’t, you don’t.)

If your business is heavy into intellectual property, you may want an intellectual property lawyer (and if it isn’t, you don’t.)

You should ask your potential attorney what practices he or she actively carries on. If the answer is “well, I kind of do everything” it might be better to find someone a little bit more focused on your area. If you’ve ever heard the phrase “jack of all trades, master of none” then you understand the point of finding someone with a bit more focus.

Now, all of that isn’t to say that you should focus on finding someone who ONLY does ONE THING. Many attorneys have a secondary or tertiary unrelated practice area (for example, I also practice some Estate Planning Law – but I don’t litigate, I don’t practice family law, I don’t practice immigration law, I don’t practice real estate law, etc.; my other areas of practice including Small Business/Startups, Transactions/Corporate, and Outside GC are all business-centric)

By the way, the Texas Board of Legal Specialization does certify attorneys in various areas, but as of yet, there is not a specific certification for business law.

2. Who will REALLY be Working on Your Matter?

It is, unfortunately, has become quite common in the legal industry to have a division of labor between “rainmakers” and “service attorneys” – which is an industry-insider way of saying, the lawyer that gives you the sales pitch, and has the big shiny resume, is not the lawyer who’s going to be working on your matter. You will get his or her associate or paralegal (who you may not have even met) for the lion’s share of the work, and you’ll only get the man or woman whose name is on the door, for a few minutes’ cursory review (if that).

I encourage you to ask your potential business lawyer who will actually be working on your matters on a day-to-day basis. If it isn’t the person pitching you, demand to meet that person. Do you trust him or her? Do they seem smart enough, attentive enough, etc.?

As I note on my hope page, I do not agree with this approach. My value proposition is simple:

  • When you call my office, you will speak to me (unless I’m in a meeting, etc.)
  • When you ask me the question I recommend above, about who will actually be doing your work, the answer is: I will.

3. Fees and Transparency

Attorneys can costs hundreds of dollars per hour. That’s no secret.

That’s a lot of money for a startup or small business. Also no secret.

And, just like hiring the cheapest doctor you can find to perform life-saving surgery or hiring the cheapest engineer you can find to build a house for your family isn’t necessarily the greatest idea, you don’t necessarily want to hire the cheapest attorney you can find to protect your business.

But that doesn’t mean the only solution is to go hire the most expensive attorney you can find, either.

You should ask about what kinds of transparency and predictability options exist, when considering whether a business attorney is the right one for you. You should ask about how likely it is that you will get a “surprise bill.” You should ask them how often (if ever) they bill a client for 0.1 hour.

4. Education

While it’s definitely true that experience and on-the-job training count for an enormous amount in the legal field, you may want to ask your potential attorney where he or she attended law school.

The late Supreme Court Justice Antonin Scalia once observed, when asked about hiring law clerks: “I’m going to be picking from the law schools that basically are the hardest to get into. They admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest.”

Similarly, if you want to increase the odds that your business attorney will be one of the best and the brightest, a resume is one of the places to look.

You should also consider any other degrees or certifications that an attorney holds. Of course, this is not to say that such certifications or degrees should be your sole focus. But a business attorney who is committed to education is a business attorney who is more likely to be informed of the latest trends and developments, and can bring that knowledge to bear protecting your business.

5. Who Are the Attorney’s Other Clients/Previous Clients?

A lawyer has certain confidentiality obligations regarding the identity of his or her clients, so usually will not give you their names, unless the representation has been made public (such as by a press release, SEC filing, court filing, etc.) But the lawyer should be able to give you some general sense of his or her practice – for example, “I have done dozens of deals in the tech industry” or “I represent construction clients frequently”.

Some attorneys may show clients’ reviews on their websites (when the clients have consented to have their names or words publicly posted).

A business lawyer who has experience representing other companies in your industry, other companies with similar market positioning, or other companies with similar structures or targets, should be your goal here.

6. Previous Experience

After law school, attorneys are trained in many different ways – some are trained in the government; some are trained in prestigious but grueling “biglaw” shops; some are trained by small law firms; some are trained by businesspeople in in-house roles. This on-the-job training has a huge influence on your potential business attorney’s perspective, work product, and advice.

You should ask about, and examine, your business attorney’s on-the-job training and work history. Did he or she go out on his own almost immediately? Did he or she “earn his chops” at big-name megafirms? Has he or she ever served as an in-house counsel or GC (or otherwise worked very closely with non-lawyer management)? Was he or she a clerk for a prestigious court, or a lawyer for a prestigious government agency?

A lawyer who has been trained by other high-quality lawyers and worked successfully with businesspeople will generally bring much value to your business enterprise.

7. Business Sense

I saved the best for last.

If your business attorney is not “front and center” with the understanding that legal fees need to pay for themselves in terms of averted disasters, you may want to think again.

If your business attorney does not proactively understand the economics of your business (e.g. it does not make sense to spend $1,000 to generate extensive legal comments on a contract for $200 worth of goods, but it may make sense to spend $1,000 on a form that will be used on many contracts for $200 worth of goods), you may want to think again.

Litigation is expensive. Sometimes a court fight is called-for, but sometimes your only possible victory would be Pyrrhic. If your lawyer’s first response to everything is to fight, rather than to assess the larger picture, you may want to think again.

 

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