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3 Hacks to Save on Startup Legal Fees When it comes to legal hurdles, an attorney can be your biggest asset or your biggest expense. Here's how to trim your legal costs.

By Veronica Picciafuoco

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If not the quarterly tax filing slog, it's often said that the worst part of being an entrepreneur is maneuvering around legal hurdles. Not only is it a necessary evil, it can also set you back a pretty penny.

While sometimes paying hefty lawyers' fees is unavoidable, there are some proven "hacks" to save time and money and still ensure that your business is legally kosher. Here are three:

1. Minimum viable legal protection.
Even attorneys agree that it's not always worth going to an attorney that will bill you hundreds of dollars per hour. For day-to-day contracts and small deals you should consider widely adopted alternatives, like using publicly available standard forms and automatic document assemblers. Legal information is not locked in big books anymore, and a little time to self-educate can save you big bucks.

Related: Tips for Overcoming Early HR Hurdles

Let's consider privacy policies, for example. If you have a website and collect customer's personal information like name and email, you probably need a privacy policy. An experienced attorney can bill you a couple thousand dollars, easily. Yet, if you use a privacy policy assembler, or start from an open-source standard and maybe read a couple of articles on the topic to make sure you're following the industry's best practices, you can get to a decent first draft that your attorney can review in an hour or for a small fixed fee.

2. Alternative fee arrangements.
Sadly, the majority of lawyers still bill by the hour by default. But times are changing. It is always worth it to ask your lawyer for other options. The smart ones already offer fixed fee arrangements for common situations like incorporation or filing a trademark. Fixed fees are good because they give your lawyer an incentive to be efficient, but beware of the fine print. Make sure you're not waiving a basic guarantee of good service, or being sold additional services you don't really need -- and that will be billed by the hour.

Related: Are Your Eyes Bigger Than Your Budget? 3 Tips to Rein in Your Startup Costs

Other options include deferred fees and, in early-stage startup scenarios, paying your attorney in equity instead of cash. Not all lawyers will go for that, but if you already established a relationship of personal trust with your attorneys it might be worth asking how they feel about convertible notes. They'll never bring it up, so it is up to you to convince them your company is a good investment. Beware not to make the opposite mistake, and give away too much equity too early just because you're bootstrapped to the bone. No investor will favorably look at a startup where the lawyer got a huge chunk of stock without vesting.

3. Outsourced general counsel.
If you are a small company, but not small enough to avoid administrative and corporate overheads like board of director's meetings, HR compliance, insurance and the like, consider having an outsourced general counsel. It's basically like having a part-time in-house attorney on retainer. Many firms offer limited counsel services and they're very flexible: You can have a lawyer handy at any time, or one day a week, or meet with him virtually. The counsel only needs to work few hours a week to take care of time-consuming obligations that will save you valuable time, and you'll know exactly how much it costs.

Related: How to Recruit a Top-Notch Recruiter

Of course, you will need to hire an external law firm for heavy-duty legal work. For a financing arrangement, for example, a part-time in-house counsel can be invaluable in making sure the other firm prices fairly and does a good job. Low cost "legal subscriptions" are also gaining popularity. Companies like LegalZoom and RocketLawyer let you buy a sort of legal insurance for less than $50 a month.

Legal services are not about to be disrupted: It's already happening. You should take advantage of it.

How have you saved on legal fees? Let us know your secret in the comments section below.

Veronica Picciafuoco is the director of content for Docracy , the home for free, open-source legal documents. She has a legal background and works closely with tech startups and small businesses in Brooklyn, NY.

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