Tuesday, October 29, 2013

Ways to Save On Startup Legal Fees

If you're starting up a business there will come a time when a good lawyer will be your best friend. However, that doesn't mean you need to utilize their bill-by-the-minute services for every legal decision you make. There are ways to avoid legal fees. Consider these options:

Go Boilerplate

If you've ever signed a renter's agreement for an apartment you were probably using a boilerplate contract. This is a template agreement already drawn up by a lawyer and is readily accepted by both sides. You might find that many of business contracts can use boilerplates that are available for free on many online legal resources sites. These contracts can include:
  • Commercial building lease agreements
  • Employee contracts
  • Vendor agreements
  • Non-disclosure agreements
Just because you're using a boilerplate contract doesn't mean you can't put in your own terms, dates and names. That's what these contracts were created for. Here's a dirty little secret: You know that expensive lawyer you hire to write up your contracts? They use the same boilerplates. You didn't think they wrote every word of a new contract did you?

Ask For a Fixed Fee

Much like the boilerplate contracts, there are also boilerplate services. Filing for a trademark or setting up a corporation are pretty much routine. The only changes that are made are the names in each of the contracts.
Does this mean you should be paying a lawyer by the hour to get those papers in order?

Not at all.

Ask around and see if you can find a lawyer to handle those kind of for a fixed fee. That means whether it takes them two or 20 hours it will only cost you one price
You could also offer stock options in exchange for legal services. The caution with that is giving away too much for the kind of "simple work" mentioned above. Your new investors might not be happy about that.

And, if you want to avoid hiring a lawyer for basic corporate services, consider using a document filing service (like CorporationCentre.ca!) to submit your paperwork at a much smaller fee than a lawyer may charge.

Part-Time Lawyer

You might find that after your initial start-up filings you don't need a lawyer all that much. However, you're now stuck paying a hefty monthly retainer to a law firm. Not a wise move.

Instead, look for a firm that can provide you with a part-time attorney. This is someone you can talk to once a week for a reduced fee. Save up your questions and make that weekly meeting count. You can also look into legal insurance. You pay a small premium in exchange for getting a lawyer only when you need them. That's a lot less than the big retainer fee.

If you should ever come across a complicated issue with taxes or find yourself being sued then you don't want to turn that into a DIY legal matter. Get a good lawyer on your side. For everything else, look for flexible options from your legal firm.