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Attorney

Definition: A person who's been formally trained in the law, especially one whose profession is advising others in matters of law or representing them in lawsuits

A business attorney can be a critical part of your advisory team, no matter what stage your business is in. When do you need a lawyer? Although the answer depends on your business and your particular circumstances, it's generally worthwhile to consult one before making any decision that could have legal ramifications. These include setting up a partnership or corporation, checking for compliance with regulations, negotiating loans, obtaining trademarks or patents, preparing buy-sell agreements, assisting with tax planning, drawing up pension plans, reviewing business forms, negotiating and drawing up documents to buy or sell real estate, reviewing employee contracts, exporting or selling products in other states, and collecting bad debts. If something goes wrong, you may need an attorney to stand up for your trademark rights, go to court on an employee dispute or defend you in a product liability lawsuit. Some entrepreneurs wait until something goes wrong to consult an attorney, but in today's litigious society, that isn't the smartest idea.

In a crisis situation--such as a lawsuit or trademark wrangle--you may not have time to thoroughly research different legal options. More likely, you'll end up flipping through the Yellow Pages in haste...and getting stuck with a second-rate lawyer. Better to start off on the right foot from the beginning by doing the proper research and choosing a good lawyer now. Many entrepreneurs say their relationship with a lawyer is like a marriage--it takes time to develop. That's why it's important to lay the groundwork for a good partnership early.

How do you find the right attorney? Ask for recommendations from business owners in your industry or from professionals you trust, such as bankers or accountants. Don't just get names; ask them for the specific strengths and weaknesses of the attorneys they recommend. Then take the process one step further: Ask your business associates' attorneys whom they recommend and why. (Attorneys are more likely to be helpful if you phrase the request as "If for some reason I couldn't use you, who would you recommend and why?") If you still need more prospects, contact your local Bar Association; many of them have referral services.

Next, set up an interview with the top five attorneys you're considering. Tell them you're interested in building a long-term relationship, and find out which ones are willing to meet with you for an initial consultation without charging a fee.

At this initial conference, be ready to describe your business and its legal needs. Take note of what the attorney says and does, and look for the following qualities:

For many entrepreneurs, the idea of consulting a lawyer conjures up frightening visions of skyrocketing legal bills. While there's no denying that lawyers are expensive, the good news is, there are more ways than ever to keep a lid on costs. Start by learning about the various ways lawyers bill their time:

If you think one method will work better for you than another, don't hesitate to bring it up with the attorney; many will offer flexible arrangements to meet your needs.

When you hire an attorney, draw up an agreement (called an "engagement letter") detailing the billing method. If more than one attorney works on your file, make sure you specify the hourly rate for each individual so you aren't charged $200 an hour for legal work done by an associate who only charges $75 an hour.

This agreement should also specify what expenses you're expected to reimburse. Some attorneys expect to be reimbursed for meals, secretarial overtime, postage and photocopies, which many people consider the costs of doing business. If an unexpected charge comes up, will your attorney call you for authorization? Agree to reimburse only reasonable and necessary out-of-pocket expenses. No matter what methods your attorney uses, here are steps you can take to control legal costs: