Hiring a Business Lawyer

| Posted by | Categories: Litigation, Small Business

Most of my practice involves representing small and medium-sized businesses — including startups in nearly every industry.

On many occasions, new owners or managers have never worked with a business lawyer and only come to me after something has gone wrong (which, in many occasions, could have been prevented if I could have gotten to them earlier).

There are plenty of guides out there that discuss the general topic of hiring a “lawyer.” This post will focus on how to hire a business lawyer for the smaller company:

1.   Not all lawyers are the same.

Lawyers have different specialties. For example, you would not want to hire me for your divorce, criminal hearing, or estate plan. I can refer you to those who will do excellent work in those practice areas, but I’ve spent the past 15 years learning about my specialty — not someone else’s. Conversely, someone who handles every type of case may not have the expertise to handle your business issue.

Training also is important. There are certain things that you can only learn at a large law firm or working on complex issues. At the same time, there are plenty of lawyers who are sophisticated and do tremendous work — and never have worked with another lawyer or been part of a larger firm. I am biased because of my own personal training in the presence of some truly fantastic business and trial lawyers.

Look at your lawyer’s experience. See what types of cases they have handled. You’ll be able to tell pretty quickly if they have a strong business acumen and have been in the trenches on commercial or construction litigation.

2. You can (and should) interview your potential business lawyer.

I believe in auditioning for my clients. In fact, I enjoy it. Hiring a lawyer is a big decision. Your business lawyer should “fit” your company and your personality.

Plan a meeting with your prospective lawyer. Go see their office. Spend some time asking about their philosophy to solving issues, how they respond to questions regarding their own preferences and their value system on how to practice law.

One suggestion is to prepare a few hypothetical questions based upon your own experiences. Ask how the lawyer would have handled that situation and compare it to the reality that exists in your own world.

Remember, the lawyer/client relationship is far from one-sided. It truly is a collaboration that takes time and trust to develop. It must start off on the right foot, and that process begins with the client choosing the right person.

3. Style Matters.

Many clients believe that part of a lawyer’s job is to make the other side “suffer.” Some believe this suffering comes in the form of an aggressive lawyer who “means business.” Others focus on the result, not the means by which it is achieved.

It’s absolutely true that the other side needs to feel “pain” in the form of having skin in the game and being equally motivated to resolve a dispute or situation. For example, if one side is spending all the money, time and effort, and the other side is not, then the issue may not resolve quickly or efficiently. Everyone needs to feel some heat to make the case progress.

Where I do not agree with the notion of “pain” is when the client uses the lawyer as a proxy to attack someone — and the lawyer allows it to happen. This is where TV and reality split. In fact, if I’m not bringing you “light without heat,” meaning that I’m calmly and rationally explaining your options, then I’m not doing my job. It is really easy to inflame passions or cause a client to get worked up over an issue. The hard part is putting those emotions aside and coming up with a reasoned and valid strategy to solve a problem.

There is a time and place for everything. Is it ok for the lawyer to get animated during discussions or at trial? Sure. In fact, it’s hard not to. However, no client is well served if rage is the main tactic or motivator — in my opinion. That works for some people, but not me.

This point highlights the need to interview your lawyer. Some owners or managers want an attorney who is aggressive all the time and under every circumstance. If I’m not their cup of tea, they should know that right off the bat before they waste any time or money.

BTW, I’m going to get along with your opponent’s lawyer. Usually. We’ll fight like dogs in court, but I will not be disrespectful or nasty. In fact, the better the lawyers get along, the better served their clients will be.

4. Talk fees up front and understand the American system of law.

The American system of law means that you pay your own attorney fees. You won’t be able to recover attorney fees from an opponent except under very limited circumstances.

This is always a kicker. Business A has a contract with Business B.  Business A breaches the contract, which annoys the owner of Business B, causes him to bounce checks, miss vacation, stay up at night, etc. Business B wants to sue for breach of contract, punitive damages for suffering and “they should have to pay my lawyer fees!”

No they don’t… Usually. Unless you have an attorney fees provision in your contract or there is a statute that applies, you are paying your own fees — and so is the other side. One exception might be (and I mean might) is if the conduct is intentional or egregious.

Have good contracts and you don’t have to deal with that issue. Until then, you will have to pay your own fees.

Also, most business lawyers work on an hourly basis, not on a contingency fee (meaning we collect a percentage of the recovery). Speaking of which…

5.    Not every case can be done on a “contingency.”

The lawyers on TV promise that they won’t get paid unless they win. Those lawyers handle personal injury, workers compensation or other physical damages cases. They sue insurance companies and usually don’t take losing cases.

Business law is entirely different. The issues involve relationships and contracts and detailed facts on how a business transaction is conducted. There are entirely different measures and notions of “success,” too. In some business cases, a walk away where no one pays anyone else may be a win. In other situations, losing less than what you are being sued for is a win.

As a result, I usually cannot take a case on a contingency. I can work within a budget and I can provide a likelihood of success to make a risk analysis. But my fee is a cost of doing business.