Mitigating uncertainty and confusion when choosing a business lawyer

The Lawyer Question

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Disclaimer: Hire an Esquire, LLC is not a law firm. Nothing in this presentation should be construed as legal advice. The following is a compilation of research and statistics on the legal market and the experiences of businesses and attorneys as reported. This should not be interpreted as legal advice for specific situations.

Where to concentrate your ounce of prevention The bigger your success, the bigger your legal risks

• Common business issues– Securing Intellectual property– Ill-documented relationships– Contracts with vendors and clients– Proper business formation

• Good business insurance agents as risk mitigation resources– Liability assessment– Cyber security & IP insurance policies can lessen the impact of

potential liability

Source: How to Avoid Common Business Legal Mistakes, SmallBusinessLawFirms.com,;Startup Law 101, Grellas Shah, LLP; interviews with experienced entrepreneurs.

Assess how an attorney fits for your business’s needs Dermatologists shouldn’t perform heart surgery; don’t go to a heart surgeon to check your pulse

• Background and Experience• Ask how many similar cases and clients an attorney has handled• Gauge familiarity with your industry through questions• Big firms equipped to handle complex matters and litigation can be

unnecessarily expensive for non fortune 500 companies

• Communication Skills• Responsiveness is a primary lawyer complaint, beware of initial

inattentiveness• Mutual understanding reduces billable time and costly misunderstandings

• Ability to handle adjacent legal matters• Familiarity with foreseeable adjacent issues provides better protection• Saves the time & money of finding and orienting a new attorney

• Gut Check• Do you trust this person with your business• Would you want to otherwise work with this person if (s)he wasn’t a lawyer? • Does (s)he seem competent, knowledgeable and “on top of” things?

Source: “How to Hire an Attorney,” Cliff Ennico, Entrepreneur Magazine, Interviews with entrepreneurs and attorneys that regularly work with entrepreneurs and sometimes clean up messes of previous lawyers.

• 2009 Average hourly billable rate by region:• Northeast $319• West $296• South $276• Midwest $264• National $284

• Experience and firm size were largest variables• Hourly rates by firm size 2009

– 2-8 attorneys: $262– 150+ attorneys : $332

• High priced commercial firms & corporate clients skews averages– 65% of $281.2B US legal market is business & corporate clients

• Hourly rates by years experience, Consumer Law (2011)– Northeast: 1-3 : $175; 6-10: $262– Pacific: <1: $162; 6-10: $244

•

Source: 2009 Incisive Legal Intelligence Survey; IBIS World “Law Firms in the US” 2011; “United States Consumer Law Attorney Fee Survey Report, 2010-2011;” Hire an Esquire, LLC.

The largest cost variables are firm size, experience, and location

Generally speaking, the larger the firm,

the larger the overhead

Entrepreneur Magazine”How to Hire an Attorney”

Sample Rates Hire An Esquire Attorneys:

$500 flat fee TM, $50 office action: • 10+ years experience filing TMs for

business clients

$175/hr, $200/hr litigation• 10 years at AMLaw 100 firm

• Specialties: business law, litigation• Clients: businesses of all sizes, large law

firms

$100/ hr• 5 years experience

• Represents business clients• Assists other law firms with litigation

Source: IBIS world Study, “Law firms in the US”; “How to Hire an Attorney” ; Cliff Ennico Entrepreneur Magazine; CT Ty Metrix real rate report; Venture Hacks, “Top 10 Reasons Entrepreneurs Hate Lawyers”; Interviews with entrepreneurs and business lawyers.

• Negotiate– Large clients make law firms negotiate, compete & agree to

outcome-based fee arrangements.– 85% of lawyers charge clients different rates for the same work – Request per minute instead of incremental billing

• Request Flat Rate Billing on most transactional matters– Many lawyers offer but won’t volunteer this option– Generally not realistic for litigation

• Be prepared before contacting a lawyer– Do background research on your industry – Have applicable documents and forms ready and organized

• Use experienced solos or freelance lawyers – Lowers costs – Experienced attorney instead of inexperienced expensive

associate

Being an informed legal consumer is crucial to cost control and work quality

The smaller the client – the smaller the transaction —

the further down the ladder the work gets pushed at the

big law firms.

Venture Hacks“Top 10 Reasons Entrepreneurs Hate Lawyers”

When “Cheap” DIY Legal Websites are Expensive“let me google that fill out that form for you”

• Paying to fill out the same form on commercial website that can be fill out for free on a government website • DBA name registration $99 + filing fees (free to fill out, most state

websites)• Obtaining EIN $79 (free to fill out on irs.gov)

• Headaches and denials from gaps in IP counseling and research • Lack of proper background research risks litigation later• Standard forms don’t account for subjective nature of IP• Lack of counseling and understanding risks loss of expensive filing fees &

website fees when IP isn’t eligible for protection for various legal reasons• With limited knowledge, 15-30 min. access to an attorney is insufficient to

address most concerns

• Automated forms are the least risky for standard situations• Always use caution• If you must use, do background information on common problems in your

industry to be aware of what a standardized form might not anticipate• Consider retaining a lawyer on a flat rate basis to review the form’s

applicability to your unique situation

Source: Comparisons of Legal Zoom, IRS, USPTO, state and local websites; April 2012 interviews with various business & IP attorneys.