How to Save on Small Business Legal Costs

Based on my experience as a small business owner, if you start and operate a small business, there are times when you are going to need legal advice. Since cash flow is often tight for a small business and lawyers are expensive, legal costs can easily blow a hole in its budget. However, there are ways to control small business legal expenses, including the following.

Be Selective. Don't pick a small business lawyer out of the phone book since an inexperienced lawyer can cost you time and money. Look for an attorney with small business experience in the areas where you expect to need help, such as incorporation or contract law. Talking to other small business owners is one of the best ways to identify competent business lawyers in your area.

Interview First. Many lawyers offer a free initial consultation. Take advantage of it to interview an attorney before you hire her. Not only will this process help you make the best decision for your small business, but you may pick up a little free legal advice in the process. Meet with two or more business lawyers before making a choice, and ask for and check references for an attorney before you hire her.

Agree on a Fee Structure. Ask about a flat fee arrangement. Some law firms will agree to one for a small business, rather than the more traditional hourly fee structure. If your ongoing legal requirements are limited and relatively basic, a flat fee could be mutually beneficial. However, be sure it is clear what the fee covers, since the type of and amount of services may be limited. You can also offer to accept service limitations, such as communication only be phone or email, for a better price.

Compare Prices. If you are interviewing two or more attorneys with comparable resumes, compare their fee structures and don't hesitate to use the fee information you have to try to strike a better deal.

Use a Specialist When Necessary. A lawyer who is an expert in a particular area of business law may charge higher fees than a generalist, but she also may be able to handle your legal work more efficiently and help you avoid pitfalls that a generalist might overlook. As a result, in the end, she may actually cost your small business less. Also, depending on your needs, you may be able to negotiate a flat fee for her services.

Be Prepared before Meeting with a Lawyer. You can save a lot on legal fees by not asking a lawyer to do what you can do yourself. Before consulting your lawyer about a specific issue, gather and organize all the relevant information and paperwork, take it with you and be ready to discuss your needs clearly and concisely. The same goes with regard to day-to-day issues that may arise in your business. Before picking up the phone or dashing off an email to your lawyer, see if you can find the information you need by doing a little research yourself.

Use Strategies to Reduce Billable Hours. If you have a fee structure based on billable hours, find out exactly how telephone and email communications are handled. You may find that a brief call to ask a question can be as expensive as a longer call that covers several topics if calls are billed in set increments of time. If you understand your lawyer's billing practices, you can develop strategies, like waiting until you have several questions to address before making that call, which will save you money.

Address Legal Issues Sooner Rather Than Later. If a business issue arises that you expect to require legal advice, consulting your lawyer immediately may be the most cost-effective strategy, since she may be able to help you avoid actions that could result in more complicated and more-time consuming legal issues.

Sources:

www.sbaloans-123.com, 5 ways to save money on legal fees/SBA Loans -- 123.com

www.fizzlaw.com, Lawyer Fees/Small Business Reduce Legal Costs/Flat Fees

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