Attorneys’ fees are of big concern to entrepreneurs, and probably the primary reason why entrepreneurs put off or avoid hiring an attorney (even if they need to). However, here are a couple of tips entrepreneurs can keep in mind.
If you’re hiring an attorney that charges an hourly fee, it is perhaps more important to consider not the actual hourly fee but the amount of time the attorney will take to complete the matter. If an attorney is more experienced and more efficient at completing a matter, they are likely to be more expensive than a less experienced attorney, but will likely be able to complete the matter more quickly and therefore may be more efficient. For example, an attorney that charges $200 an hour but takes six hours to complete a matter actually costs more than an attorney that charges $500 an hour but can complete the same matter in two hours. So when comparing attorneys, ask how long it will take them to complete a matter in addition to asking what their hourly fee is.
Of course, while you can ask attorneys who charge hourly fees to estimate the time to complete, that’s not always a guarantee. Alternatively, you can always hire an attorney on a flat fee. Flat fees give you cost certainty, even if a project runs longer than you and the attorney expected. Some attorneys, such as myself, predominantly charge by flat fee; other attorneys may be willing to negotiate a flat fee.
Finally, if you’re being cost conscious when hiring an attorney, here are a couple of do’s and don’ts:
– DON’T try to negotiate or haggle with an attorney over their fees. There are a few reasons for this: 1) it’s not fair to other clients of the attorney who have paid the fee; 2) it puts the attorney in the uncomfortable position of saying no to a prospective client; 3) it may give the attorney the impression that you might be a problem client
– However, DO feel free to ask for alternative terms of payment. Although I normally require flat fees up front for many routine matters, I’m always open to discussing a payment plan if the client is unable to pay the full fee upfront. In addition, it is also usually possible to defer payment, for example after completing crowdfunding or a financing round.