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Should a Small Business Use an Attorney?

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Deciding whether to hire an attorney for your business’ legal transactions can sound like a costly proposition. Attorneys generally charge by the hour, even in non-litigation situations, and their services can be quite expensive.

The proliferation of Internet legal services has made it easier for those who want to go it alone to get solid legal advice for a relatively nominal fee while doing the legwork themselves. While this can result in significant savings for your business, the ideal approach may be to strike a delicate balance between doing your own legal work and hiring an attorney.

“The ease of finding legal information on Internet is wonderful,” said Luanne Mayorga, manager of the Illinois International Trade Center at the College of DuPage in Lisle, Ill. “However, it can make you seem like a legal expert when you’re not and that can end up costing you a lot of money in the end.”

Mayorga said that she has seen small businesses save a few hundred dollars by doing their own legal work only to end up paying thousands in fees later on to rectify a legal issue they handled improperly.  While using on-line legal services or simply going it alone may be all right for some legal issues, there are a few for which Mayorga recommends you always use an attorney. These include:

  • Filing papers of incorporation
  • For human resources issues
  • For contract agreements
  • For partnership agreements

One way to ensure that your legal fees do not spiral out of control is to find an attorney that is willing to give you a per project (rather than hourly) estimate up front.

Hourly fees can range between $200 and $600 or more an hour. The attorney fees associated with filing incorporation papers could be in the $1,200 to $1,500 range. The creation of contracts and partnership agreements could cost between $800 and  $1,200. The attorney’s fees associated with human resources issues could be higher.

“Human resource or labor and employment law is a specialty,” said Robert A. Goldstein, a Florida-based retired attorney and counselor for SCORE (Service Corps of Retired Executives), an outreach of the Small Business Administration.  “Its practitioners may be slightly more expensive than general practitioners.”

Goldstein, however, believes it is worth the investment.

“A business can get into all kinds of trouble if this area is not handled properly, so my advice would be to retain a professional in the field and follow his or her advice. If you don't want to spend the money, there are individuals who work as employment specialists who may be cheaper and knowledgeable, but I'd be sure that I had some good references before I hired one,” he said.

Additionally, you can seek legal advice for free from your local Small Business Development Center, an outreach of the federal government’s Small Business Administration.

There are also many online communities of business owners in which you can start your search for legal advice — even if it ultimately leads you to an attorney. One place to start is another federal government web site, specifically for business owners, located at www.business.gov.