Today we're going to talk about hiring an attorney. Now, attorneys can be very useful for you as you engage in the early stages of your business development. Lawyers can provide, not only sound legal advice, but they can also help you avoid potential liabilities for your company. Now, hiring a lawyer can be very expensive, and so let's talk about some of the things that you want to think through when making the decision to hire a lawyer. First, we'll talk about why you may need an attorney. Then we'll talk about some ways that you can go about finding the right attorney. I'll give you some tips on interviewing potential candidates. Finally, we're going to spend some time talking about the engagement letter. First, why do you need an attorney? As I said, attorneys can be very useful in giving you sound legal advice early on in the development of your business. For example, if you're working with multiple business partners, a lawyer can help you think through the requirements of your partnership agreement. Maybe you and your business partner are bringing different assets to the business, maybe the profits and losses aren't shared equally, and so a lawyer can help you think through the ramifications of your partnership agreement. One of the most important decisions you'll make as a business owner is the form of which your business will take. Is it going to be a corporation? Will it be an LLC? Will it be a general partnership? This is a very important question with serious legal implications, and a lawyer can help you think through the best way to make that decision. Now, later on in the development of your business, you'll tackle issues like intellectual property or eventually you'll hire employees, and all of the employment issues are things that a lawyer can be very useful on. Tax. Ultimately, if you decide to take your business public, there's a ton of issues around securities that lawyers can be very useful in helping you navigate. All of these issues are very important to the success of any business, but they're very wrought with landmines, and so you want to make sure that you consult early on with a lawyer to tackle these types of issues. How do we find the right lawyer? Well, the first thing you should know is that the best lawyer for you will be someone who you trust and someone you feel comfortable being completely open and honest with. In fact, in order for the lawyer to give you the best advice, you must have this environment of complete candor and openness. So the best way to find a lawyer that you trust is to get referrals. You can ask friends, family, co-workers, essentially anyone you trust to refer you to a lawyer. You can even ask other lawyers to refer you. There are tons of online resources that are available, Google searching, findlaw.com, that will allow you to, not only just find a lawyer, but you can narrow your searches by your geographic area or the area of expertise that you're looking to hire a lawyer for. Most lawyers are part of what we call bar associations. This is just really an association of lawyers that are in a particular practice area or in a particular geographic area. Many local bar associations offer referral services, and so you can consult with these bar associations to get a referral to a lawyer. One thing to keep in mind here is that just because a lawyer has been good for one client does not necessarily mean that that would be the best lawyer for you or the best lawyer for you on the particular issue that you need help with. So if you find lawyers, before you hire one, you want to make sure that you interview multiple candidates. You want to do this to make sure that you find the right fit. One of the questions that I like asking lawyers when I'm interviewing them for an early stage company is what is their experience dealing with startups or early stage companies. This is a very important question to ask for multiple reasons. First, if a lawyer has no experience dealing with an early-stage startup, then that lawyer may take a ton of time to help you navigate through issues that a more experienced lawyer can do more quickly. If the lawyer could do it more quickly, that's going to mean a lower expense for you. Also, you want to make sure that the candidates that you're interviewing understand not just your specific business idea or your business venture, but also the larger industry in which your business will operate. Again, if the lawyer understands the industry, it's going to help you get better advice, but it's also going to lessen the time it takes the lawyer to walk you through potential legal issues, which will result in lower costs to you. Again, having a lawyer help you out early on in the process can be expensive, so these are things that can help you find the right lawyer at a lower cost for you. That leads us to cost. That's going to be one of the biggest drivers in making the decision to hire a lawyer and also it's oftentimes a deterrent in seeking good legal advice early on in process of developing your business. There's ways to deal with this. In the interview process when you're interviewing potential lawyers, you want to find out how the lawyer will be paid because there are multiple ways to do it. Some lawyers accept retainers. This is essentially a sum of money that you put aside for the lawyer, and as the services are provided, monies are deducted from that sum. Your job as the client will be to either maintain that sum or to refresh it once it runs out. Lawyers can also be paid on an hourly basis, or a fixed fee, or project-based fee basis. Hourly fees can be quite expensive. Some lawyers charge hundreds of dollars per hour for their services. So if you're going to engage a lawyer on an hourly-fee basis, you want to be sure that you understand how long it will likely take the lawyer to provide those services. If it's a fixed fee or project-based fee arrangement, you want to understand exactly what services you're intending to get from the lawyer for the cost that you've agreed to do. Finally, I'll say a bit about equity. This is a very useful tool for early stage companies that don't have a lot of cash on hand. This arrangement allows you to essentially offer the lawyer a small stake in your company in exchange for the legal services that he or she will provide you. Now, either way, whether it's a retainer, or an hourly, or fixed fee, or an equity type arrangement, it's very important for you in that interview process with potential candidates to get a firm understanding of what costs will be associated with the services being provided. Finally, the engagement letter. The engagement letter is essentially an agreement between you and the lawyer that outlines the scope of the representation. This is essentially spelling out what services the lawyer will provide you, how the lawyer will be paid, and when you are to pay the lawyer. Be very careful, when you're signing an engagement letter, to read the fine print. You want to make sure that you have a very firm understanding on three major areas. First, the scope and nature of the representation. You want to make sure that you understand exactly what you're asking the lawyer do and exactly what the lawyers is intending to give you in terms of services. Secondly, you want to make sure it's very clear in the engagement letter how the lawyer is to be paid. What fee structure exists between you and the lawyer? Is it an hourly? Is it fixed fee? Is it equity? Is it a retainer? Either way, make sure that you understand what the fee structure is. Then finally, billing. How often will you pay the lawyer? Will it be once the services are completed? Is it a monthly arrangement? However you decide and however you agree with the attorney, make sure that's spelled out very clearly in the engagement letter. The key takeaways from this lesson. First, lawyers can be very helpful to you and your business early on. Not only will they give you sound legal advice, but they can also help you avoid future liabilities for your company. In order to find a lawyer, you want to use referral services: asking people you trust, asking co-workers, even using online resources to narrow to specific areas of practice and geographic areas. Before ever hiring a lawyer, you want to make sure you interview multiple candidates to ensure that you're getting the right fit. Finally, when signing the engagement letter, make sure you understand the scope of the representation, the fee structure, and the billing arrangements.