One-fourth of small business owners think legal issues pose the biggest risk to their companies, according to a new survey by Rocket Lawyer. In today’s litigious society, that’s not surprising. But despite these worries, entrepreneurs aren’t seeking legal counsel as often as they should. The reason? More than half of small business owners (51 percent) say it’s because legal help is too expensive.
Failing to consult a lawyer is often penny-wise and pound-foolish. In fact, getting legal help is actually a smart way to save money for your business. A good lawyer can help you prevent costly problems later, spot loopholes in contracts and agreements that can cost you money, help you save on commercial leases and more.
Fortunately, it’s possible to use a lawyer without spending a fortune. Here are five steps to keeping your business’s legal costs down.
1. Understand how the lawyer bills you.
Some attorneys bill hourly, some by the day (per diem), and some on a monthly retainer. Attorneys may also charge flat fees for standard jobs like contract review. No matter what method your lawyer uses, ask questions to be sure you understand the details. For instance, if the attorney has assistants, are you billed for their work at the attorney’s rate? Also ask about extras—some lawyers will pass the cost of faxing and making copies on to the client, while others won’t.
2. Use time wisely.
Time is money for a lawyer, so when you meet with or talk to your attorney, plan ahead to keep the time as brief as possible. Make a list of questions so you don’t forget anything you need to ask; then focus on what you need to do.
3. Keep it simple.
The less work the attorney has to do, the less you’ll get billed for. Provide the lawyer with documents he or she will need to review before the meeting. Have your information in order. Send one, detailed email rather than 17 short ones with question after question. Like any businessperson, lawyers appreciate it when you make their job simpler.
4. Review your legal bills.
If you’ve got a complex project with an attorney, ask for an itemized bill. Go over it in detail to make sure you weren’t overcharged and that you understand what you’re being billed for.
5. Be proactive.Some entrepreneurs are scared to talk to their lawyers for fear of incurring a fee… so they let small problems spin out of control. Make it a point to communicate with your attorney briefly every month or so and bring up any issues of concern. This way, you can nip problems in the bud and take advantage of opportunities for growth when they arise.