The term “legal fees” can literally send my hackles standing. Most people (rightly or wrongly) harbor a mix of fear and derision for lawyers—seeing them as cunning foxes with dollar signs in their eyes. The sentiment runs stronger among small and micro entrepreneurs who often sweat buckets thinking about the exorbitant lawyer’s fees that they have to shell out for legal requirements in order to get their upstart business ventures up and running.
Although there are instances where hiring an attorney is inevitable, there are actually little-known tricks on how a newbie business owner can save on startup legal fees. Let me share some of them.
1. Minimum possible legal services and protection.
2. Alternative billing systems.
Although most lawyers still bill their clients by the hour, many are changing their ways to suit these hard times and adopting new billing systems that make it easier for cash-strapped business owners to avail of legal services. Such systems include paying in equity instead of cash or fixed term fees for simple legal matters such as incorporating. Before committing to these fee arrangements, however, make sure that you understand all of the risks involved and are willing to take them. For example, giving your lawyer an inordinate amount of equity can make you seem unreliable and desperate to other business partners—so before you sign anything, read the fine print to avoid any booby traps.
Outsourcing generally means that you have a part-time company lawyer on retainer. Not only will you get to enjoy the convenience of having access to legal services when you need it, outsourcing will also help you save a pretty penny in the long run—retainer fees often end up a lot cheaper than having a lawyer bill you by the hour. Ask your lawyer if you can work out an arrangement similar to this one. You can also explore other options such as a legal subscription—wherein you can buy legal insurance for a small monthly fee.
Of course, all of these hacks are not meant to substitute for heavy legal requirements. For those cases, you still need to hire a credible law firm to represent your business. But for minimal legal work, the abovementioned tips can be of great help – especially for startup entrepreneurs on a shoestring budget.
Do you have your own experiences regarding saving legal fees? Share your secrets in the comments!