Choosing an Attorney for a Firm

It is important for an entrepreneur to select an attorney as early as possible

when developing a business venture. Selecting an attorney was instrumental in
helping XploSafe, the company profiled in the opening feature, establish a firm
legal foundation. Table 7.3 provides guidelines to consider when selecting an
attorney. It is critically important that the attorney be familiar with start-up
issues and that he or she has successfully shepherded entrepreneurs through
the start-up process before. It is not wise to select an attorney just because she
is a friend or because you were pleased with the way he prepared your will.
For issues dealing with intellectual property protection, it is essential to use an
attorney who specializes in this field, such as a patent attorney, when filing a
patent application.10
Entrepreneurs often object to the expense of hiring an attorney when there
are many books, Web sites, and other resources that can help them address
legal issues on their own. However, these alternatives should be chosen with
extreme caution. Many attorneys recognize that start-ups are short on cash
and will work out an installment plan or other payment arrangement to get the
firm the legal help it needs without starving it of cash, as was the case with
XploSafe. This is particularly true if the attorney senses that the new venture
has strong commercial potential and may develop into a steady client in the
future. There are also ways for entrepreneurs to save on legal fees and to
increase the value of their relationship with their attorney. Here are several
ways for entrepreneurs to achieve these dual objectives:
_ Group together legal matters: It is typically cheaper to consult with an
attorney on several matters at one time rather than schedule several
separate meetings. For example, in one conference, a team of start-up
entrepreneurs and their attorney could draft a founders’ agreement,
decide on a form of business organization, and discuss how to best draft
nondisclosure and noncompete agreements for new employees. (We discuss
these issues later in the chapter.)
_ Offer to assist the attorney: There are excellent resources available to
help entrepreneurs acquaint themselves with legal matters. An entrepreneur
could help the attorney save time by writing the first few drafts of a
founders’ agreement or a contract or by helping gather the documents
needed to deal with a legal issue.