7 Qualities to Look For in a Lawyer

When do you need a lawyer? Although the answer depends on your business and your particular circumstances, it's generally worthwhile to consult one before making any decisions that could have legal ramifications.

Some entrepreneurs wait until something goes wrong to consult with an attorney, but in today's litigious society, that isn't the smartest idea.

"Almost every business, whatever its size, requires a lawyer's advice," says James Blythe Hodge of the law firm Sheppard, Mullin, Richter & Hampton. "Even the smallest business has tax concerns that need to be addressed as early as the planning stages."

Many entrepreneurs say their relationship with a lawyer is like a marriage -- it takes time to develop. That's why it's important to lay the groundwork for a good partnership early.

How do you choose the right attorney? Ask for recommendations from business owners in your industry or from professionals such as bankers and accountants you trust. Don't just get names; ask them for the specific strengths and weaknesses of the attorney's they recommend.

Then take the process one step further: Ask your business associates' attorneys whom they recommend and why.

Next, set up an interview with the top five attorneys you're considering. Tell them you're interested in building a long-term relationship, and find out which ones are willing to meet with you for an initial consultation without charging a fee.

At this initial conference, be ready to describe your business and its legal needs. Take note of what the attorney says and does, and look for the following qualities:

Experience. Although it's not essential to find an expert in your particular field, it makes sense to look for someone who specializes in small-business problems as opposed to, say maritime law. "Find someone who understands the different business structures and their tax implications," says Hodge.

Understanding. Be sure the attorney is willing to learn about your business's goals. Sure, you're a startup today, but does the lawyer understand where you want to be tomorrow and share your vision for the future?

Ability to communicate. If the lawyer speaks in legalese and doesn't bother to explain the terms he or she uses, you should look for someone else.

Availability. Will the attorney be available for conferences at your convenience, not his or hers? How quickly can you expect emergency phone calls to be returned?

Rapport. Is this someone you can get along with? Good chemistry will ensure a better relationship and more positive results for your business.

References. Don't be afraid to ask for references. Ask what types of businesses or cases the attorney has worked with in the past. Get a list of clients or other attorneys you can contact to discuss competence, service and fees.

Reasonable fees. Attorneys charge anywhere from $50 to $1,000 or more per hour, depending on the location, size and prestige of the firm as well as the lawyer's reputation and experience. Shop around to get quotes from several firms before making a decision.

However, beware of comparing one attorney with another on the basis of fees alone. The lowest hourly fees may not indicate the best value in legal work because an inexperienced attorney may take twice as long to complete a project as an experienced one will.

While there's no denying that lawyers are expensive, the good news is, there are more ways than ever to keep a lid on costs.

Start by learning about the various ways lawyers bill their time. Most attorneys bill by the hour. Some attorneys suggest a flat fee for certain routine matters, such as reviewing a contract or closing a loan.

If you think one method will work better for you than another, don't hesitate to bring it up with the attorney; many will offer flexible arrangements to meet your needs.

Have the attorney estimate the cost of each matter in writing, so you can decide whether it's worth pursuing. Learn what increments of time the firm uses to calculate a bill. Request monthly, itemized bills. See if you can negotiate prompt-payment discounts.

Before you meet with or call your lawyer, have the necessary documents with you and know exactly what you want to discuss.

Meet with your lawyer regularly. At first glance, this may not seem like a good way to keep costs down, but you will be amazed at how much it reduces the endless rounds of phone tag that plague busy entrepreneurs and lawyers. More important, a monthly five- or 10-minute meeting (even by phone) can save you substantial time by nipping small legal problems in the bud before they even get a chance to grow.

How can you tell if your attorney is doing a good job for you? The quickest measure is how many legal difficulties you're having. Lawyers should be fending off legal problems. A good attorney identifies potential problems in advance.