Most corporations, even small non-profit ones, try to maintain good working relationships with one or more attorneys so they can obtain cost-effective help when needed. After all, legal crises can develop rather suddenly and may require immediate attention. If your corporation cannot afford in-house counsel, make sure when initially funding your corporation that you at least set aside funds to help when legal services are required. Keep in mind that even if you do ask one or more lawyers to serve as members of your board of directors, that may not want to provide you with their legal expertise for liability reasons – unless a separate employment or retainer agreement has already been negotiated. (Of course, this can lead to serious conflicts of interest, so it’s not usually desirable.)
Here is some general information about hiring attorneys that may help you be better prepared to hire one when lawsuits or general corporate issues make it a necessity.
Common Ways to Obtain Legal Help
By using a retainer agreement. Consider hiring a lawyer on a retainer basis who’s willing to provide his/her legal opinion over the phone within an “agreed-upon” timeframe as needed;
Making a contingent fee arrangement. You may be able to negotiate with a law firm specializing in specific business fields on a contingent-fee basis. However, this means that the firm will only get paid a set percentage of any possible damages -- if it prevails in defending you in a lawsuit. Most law firms don’t like to negotiate on this basis. However, it all depends on the nature of your lawsuit;
Negotiate on a flat-fee basis. This just means a firm will quote its fees to you based upon set (or agreed-upon) activities you may be requesting it to handle for you;
Request an hourly-fee basis. Be careful when requesting this billing method as it can prove very expensive – unless you actually agree in advance on many set “flat fees” as noted above.
When Corporations Usually Need Legal Help the Most
Obviously, you’ll probably need significant legal help when first choosing the best structure for your business and filing all of the required state and federal paperwork that may be required. Likewise, you may need to rely heavily on your attorney to draft executive job contracts and buy-sell agreements. The latter are necessary when one or more owners (or shareholders) decide to depart and you’re following an orderly process for repurchasing their shares or ownership rights (that you’ve already set forth in your articles of incorporation, operating agreement or bylaws).
During the first year or two you’re in business, you may also need an attorney to draft a variety of business contracts for you so you can negotiate deals with other companies. Should your corporation ever be targeted for a merger or acquisition, you’re likely to require legal advice at that time, too. (Furthermore, you may need one if you’re trying to force a director or other executive to leave his or her job immediately. Hopefully, you already carefully addressed this possibility in the person’s initial employment contract.)
After you’ve been in business for several years, your need for regular legal advice may diminish, unless your company is sued, you’re enjoying major growth periods or you’re seriously considering dissolving the corporation.
To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.