BUSINESS LAW 101 / SHOULD YOU HIRE AN ATTORNEY?

By Albert L. Kelley, Esq.

Must you have an attorney to start a business? No. Should you have one? Definitely, but only one who understands business law. Lawyers, like doctors, specialize. A criminal defense attorney is not likely to know the nuances in corporate law to properly advise you. Whether purchasing an existing business or starting one from scratch, there are legal issues all along the way. Every transaction has unique issues that must be dealt with.

Aside from buying a home, the start-up of a business will be one of the most important transactions a person can have. The cost can easily be the largest expenditure a person makes in their life. And if done correctly, the return on investment will support the new business owner and their family for the rest of their lives. With an investment of that value, the small additional cost of hiring an attorney to walk through the legal pitfalls is worth it.

There are several items to take into consideration when deciding on hiring an attorney. First is experience. As mentioned before, many attorneys concentrate in an area of law. For example, when I opened my own law practice in 1995 I concentrated on business law and intellectual property. I still maintain that concentration. While I know the basics of the criminal justice system I will not take a criminal case. Nor will I take a divorce case, even though I know the basics of family law. There are nuances in those areas of law that I do not know, and it would be doing the client a disservice by taking their case. The liability to the client is higher when they hire a lawyer who is less knowledgeable as issues might get missed that a more seasoned attorney may catch.

When investigating lawyers, ask to see their resumes; discuss their experience; look them up on the Florida Bar’s website. The Florida Bar website will show if the lawyer has been disciplined during the last ten years. Ask around town about their reputation. Talk with your local clerk of courts, realtors, other businesses.

Also look for attorneys who are willing to educate you. There are many lawyers and legal services who will file your Articles of Incorporation or Organization and then present you with a blank corporate book with no instructions on how to complete it. This is a disservice to the client and borders on unethical. A good business attorney will explain every document to you in detail and explain why certain things are necessary. The lawyer’s job is to make sure the client knows what, why, how and when.

Next, ask about their billing system so you know what to expect. Legal fees can be billed in many ways:

Hourly: The primary billing method is hourly. In an hourly billing system, the attorney keeps track of how many minutes he works on a case and bills the client based on how much time he spent. As an example, if the lawyer bills at $300 per hour and spends thirty minutes on a hearing, he will bill $150.

Flat Fee: In a flat fee system, the attorney charges a fixed amount regardless of how much work he has to do. With the flat fee, the attorney makes the same whether he can do the work in one day or if it takes six months.

Contingent Fee: In a contingent fee case, the attorney gets a portion of whatever recovery the client receives. This doesn’t really apply to business start-ups, although some lawyers will take a percentage of the business as payment.

Pro Bono: This is a free case for the client. Every attorney in Florida is required to do a certain amount of pro bono work or pay into a pool for others to provide free legal services. If the attorney determines that you qualify, they may be willing to work at no cost.

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University. He is also the author of “Basics of Business Law” “Basics of Florida’s Small Claims Court”, “Basics of Florida’s Landlord-Tenant Law” and “Basics of Starting A Business” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice. If you have any questions about legal issues, you should confer with a licensed Florida attorney.

[livemarket market_name="KONK Life LiveMarket" limit=3 category=“” show_signup=0 show_more=0]