Reasons to Retain a Local LLC Business Lawyer
Hiring a local LLC business lawyer presents several advantages that ensure your venture is in capable hands. A local attorney will have in-depth knowledge of state-specific laws and regulations, which can be crucial for the successful navigation of the LLC formation and maintenance process. They are familiar with the requirements and obligations specific to your state, something that may not be the case with an out-of-state attorney.
Additionally, a local LLC business lawyer offers a personalized service that may not be afforded by a larger firm or someone located hundreds of miles away . They have a vested interest in the local entrepreneurial community and are thus more attuned to the needs of small businesses, no matter the industry. Furthermore, communication will be smoother as you won’t have to take into account different time zones for regular phone calls and emails.
A local specialist can also provide valuable insights into the state’s business environment, so you will be better prepared to tackle challenges or seize opportunities specific to your area. For example, a local attorney may be able to alert you to programs in your county that support new businesses and entrepreneurs. In other words, a local lawyer may know of things you have not even thought to ask.
Top Services Provided by LLC Business Attorneys
There is a wide range of services that LLC business lawyers can provide to small and large business alike, upon which we will elaborate below. LLC business lawyers can help with the formation of new businesses, which involves the drafting of the Articles of Organization and a detailed Operating Agreement that addresses: member duties, member ownership, management, capital contributions, distributions, buyouts, and the exit process. LLC business lawyers can also review existing Operating Agreements to see if they are in order and/or dispute the management decisions of the LLC. In addition, they can also help with LLC member issues, as well as drafting new or revising existing contracts.
Another key service that an LLC business lawyer offers is a compliance check for existing and new businesses. An LLC compliance check will determine whether a business is following the right structure for its operations in the state and/or states where it conducts its business activities. Not all LLC business lawyers conduct compliance checks. The compliance check plan is updated annually in order to keep our clients aware of changing laws.
Other key services offered by LLC business lawyers include: general LLC dispute resolution, contract drafting, due diligence for mergers and acquisitions, HR issues, tax questions, business continuity, non-compete agreements, buy-sell agreements, board member meetings, and SEC lawyer representation.
How to Select the Most Suitable LLC Lawyer in Your Area
When it comes to choosing the best LLC business lawyer for your own circumstances you have to take into consideration several factors: He or she should be well-versed in various aspects of business law, especially when it comes to LLCs and other forms of corporations in your locality. In addition, the attorney should have a good understanding of employment, tax and financial planning rules and regulations as well. If your business has international operations or clients, make sure that the lawyer understands the relevant international laws. Make sure that the attorney has experience in this field, as well as a track record for getting good results. Look for a lawyer with good reviews from previous clients and an excellent reputation among your business peers. To find reviews, look on Google, social media sites, the Better Business Bureau and through your state bar association (which keeps track of attorney standings and discipline). The key is to find a reasonable fee, something that provides good value for the money. Many people naturally look for the cheapest option available, but this is not the best way to go, even if you are trying to save money. Make sure that your potential choice has sufficient time and employee resources committed to your LLC to get the work done properly and in a timely fashion. If the lawyer seems too busy to take on any more clients, he or she may not be the best person for you or your business. A good place to start is with your own accountant. They are likely to know a corporate lawyer they could recommend. Other good sources are legal clinics, your local bar association, law school career centers and business associations.
Typical Legal Matters Handled by LLCs
Businesses that choose the corporate form benefit from some significant advantages over sole proprietorships and certain other types of business entities. However, these businesses must also adhere to a number of complex requirements to maintain their compliance with the law and safeguard the delicate balance of interests that members and investors have explicitly and implicitly in the business. This is particularly true for those who elect to form a limited liability company, or LLC, in their state.
Some of the most common legal issues faced by LLCs include:
Disputes over the rights and interests of members
As with any business, an LLC may run into disagreements about how decisions should be made, how profits should be allocated, the amount of individual members’ payouts and more. LLCs are often governed by consensus rules in their bylaws or operating agreements, and when those rules are not adhered to, members may seek a path to resolution that requires external assistance .
Compliance issues with state regulations
Many states require LLCs to complete various paperwork and follow a series of steps to set up their business in a manner that is compliant. If an LLC fails to follow the proper procedures, it may be at risk of losing some or all of the benefits it receives from selecting the LLC option.
Contract disputes
It is crucial for a business of any type, including LLCs, to lay out the terms of business agreements in writing to protect their own interests and avoid future disputes. If an agreement is signed without the necessary details included or if it is simply a handshake deal, there is a chance that the parties will not adhere to their obligations. This may lead to a lawsuit.
These are just a few of the problems that can arise for an LLC. The solutions often involve recallibration of the terms listed in the company’s bylaws and articles of organization as well as further negotiation and drafting to establish the relationships and conditions that the members want to abide by. Experienced LLC lawyers can help with these issues to ensure the protection of the business.
Cost of Hiring an LLC Lawyer
The Cost of Hiring an LLC Business Lawyer
When considering hiring a business lawyer specializing in LLC formation and compliance, the cost of those services is often an important factor. It can be instructive to learn how to analyze the attorneys you are "interviewing" for the job.
An LLC business lawyer typically bills at a standard hourly rate. Business lawyers’ rates vary by region, market demand, and expertise. In order to get a sense of what is a reasonable hourly rate, you can check the local bar association website. That should have information on the prevailing rates in the region and a breakdown by practice area. In general, large earth quake prone cities will have the highest hourly rates, while rural areas with sparse populations will have the lowest rates. That said, many California attorneys have set their rates on the high end of the scale due to high demand for their services.
Flat fees can be charged for more predictable services, like forming an LLC or drafting an operating agreement. Ask if there is a flat fee for those services, and for ongoing services. If you project your future legal needs, you would work out a deal with the attorney for a flat fee. This will save you money if you are likely to need more services in the future. Easy, right?!
Retainers are popular with litigation lawyers. In this arrangement the client pays a minimum amount at the outset of the case to be applied to future work. This has the advantage of giving the attorney money to work with and not having to bill at a high hourly rate.
Of course value is different from cost. You have to take into consideration the value of the service being rendered. If it saves you time and money it is worth it. Lawyers often point out that it costs a lot more to fix problems that are left unaddressed than it does to hire a lawyer on a regular basis to act as a consultant.
How to Get the Highest Value from Your Lawyer
Maximizing the Value of Your LLC Business Lawyer & Lawyer-Client Relationship
Like you, we don’t have time to waste and efficiency is key. Many startups are limited on their legal budget, and you want to maximize every dollar. You can make the relationship with your business lawyer a win-win for you both. Here are some tips on maximizing that limited budget:
In order to maximize your relationship with your LLC business lawyer, set clear expectations about your budget and what you want to accomplish. Your LLC business lawyer understands that you want to avoid "bleeding money." We suggest you keep your attorney updated on your business changes and decisions on a weekly basis (or as frequently as needed) depending on how busy your business is. Try to keep the message short and to the point, and with the context that it applies to your LLC business , so the lawyer doesn’t have to figure out what your message means or do a search to figure out where the information is. In addition, include a response deadline and best time to call you to move the issue forward.
Ask your LLC lawyer questions you might have about how to maximize value from your lawyer-client relationship. There can be creativity and flexibility in how to address legal issues while not spending too many billable hours.
To make the most of your LLC lawyer, keep them apprised of your business plan and strategic initiatives (consistently) before you need legal assistance so that they know your personal goals and tradition and less time is needed to get up-to-speed. Keep an open mind and consider ways that will keep you, your business and your assets safe from unnecessary risks.