5 Questions to Ask When Hiring a Lawyer
Many startups and small businesses find hiring a lawyer to be a scary and challenging task. We’ve all heard the lawyer jokes, and we all have heard that lawyers are expensive. Also, it’s very difficult for a layperson to evaluate a lawyer’s particular knowledge and abilities. Even so, having a good lawyer on the team is crucial to the success of any business, whether it’s a Fortune 50 corporation, a small business, or a startup.
You ask your friends, family and colleagues for recommendations, you read articles in the newspaper, you do some research online, but when the prospective lawyer is sitting in front of you, what should you ask? Here are five essential questions to ask of any lawyer that you are considering as an advisor to your startup or small business:
1. What kind of law do you practice? This seems basic, but you want a lawyer that practices the kind of law that you need. If you own a business and need a contract to be written, you shouldn’t go to a lawyer that does criminal defense work. If you need an office lease, you shouldn’t go to the guy that handles your will. Those are just very different bodies of law and experience. Beware of the “door lawyer” — the lawyer that takes anything that comes through his door. He says he practices criminal defense, estate planning, immigration law, civil litigation, personal injury, employment law, and business law, but can he really do all of these very well?
2. What is your experience? This is related to the first question. You want the lawyer to have experience doing the kind of work that you need, so that she has a decent level of competence and understanding of the issues. Of course, there is a first time for everything, and just because a lawyer has never drafted an office lease, for example, doesn’t mean she can’t figure it out and do a good job. Just make sure you aren’t paying for on-the-job training for your lawyer. Pro tip: at big law firms, you almost always are paying for on-the-job training for the junior lawyers, who will be doing most of your work (see Question 4).
3. What size is your firm, and what kind of clients do you serve? You want to avoid a mismatch between the law firm and your business. Bigger isn’t always better. A firm that has hundreds of lawyers, and that primarily caters to Fortune 500 type companies, is not usually a good match for a small business or a startup. Your 5-employee company with $500,000 in revenues is not going to be the most important client of the firm that typically services companies with tens of thousands of employees and billions in revenue. That doesn’t mean you can’t get good service, but don’t you want to be the most important client for your lawyer?
4. Who will be working on my matters? Bigger firms tend to staff projects this way — a partner (your contact) takes in a project, and then hands it off to a junior lawyer, explaining what he wants the junior lawyer to do. The junior lawyer does the work, checking in with the partner occasionally for feedback and correction. They go back and forth, billing you for each lawyer’s time and for the meetings between the two lawyers. You may meet this junior lawyer at some point during the process, or you might just see her name on your final bill and wonder, who is that? This has some baked-in inefficiencies and problems. First of all, you want the lawyer you chose to do the work, don’t you? Second, it probably takes more time (and costs more) for the partner to explain the project to someone else, and to have to correct that person’s work, than it would take for the partner to do the work himself, even at a higher billing rate. You are the client, and you have the right to veto these handoffs and require the lawyer of your choice to do the work.
5. How (much) do you charge? I put this last, because although it is important, it isn’t necessarily the most important item. Of course, you want to know how much the lawyer charges, to ensure that you can afford it. Some lawyers cost a lot more, usually because they have a higher cost structure — expensive office space, fancy artwork and furnishings, lots of staff, etc. You also want to know how the lawyer charges for the project. Is it a fixed fee? Is it by the hour? Hourly billing sometimes can’t be avoided, but it is open-ended and it rewards inefficiency. Definitely ask about fixed fees or some other alternative billing arrangement.
Those are five key questions to ask when evaluating a lawyer to represent your business. Hopefully, these questions will enable you to choose a lawyer that can help your business grow and thrive, and who can be a trusted advisor to you.