Many small businesses are started and run by well-meaning, intelligent entrepreneurs who know their field well. Some are mom and pop shops and others are million-dollar, yet considered small time, operations run on a shoestring. Either way, these small businesses encounter many of the same problems that large corporations face, such as breach of contract, employee discrimination, collections and small claims matters, just to name a few. So, what is a small business to do without a budget line for an in-house counsel?
The answer lies in an attorney-client relationship known as outside general counsel. This allows you to call your lawyer on important matters without incurring big legal bills? How, you may ask? The relationship is relatively simple. You engage an attorney under a monthly retainer agreement which allows you to budget a flat rate sum each month for legal fees. The retainers are individualized and based on your company’s needs, so no two relationships nor fees are the same.
At the initial consultation you will discuss with your new “general counsel” what your needs might be over time. This will provide the attorney with the information he/she needs to formulate a plan for your legal representation. One month you might need more legal services than the next but the cost will average out over time for both you and your attorney.
Typical services will include drafting sales agreements, negotiating contracts, drafting and sending letters for collection, corporate formation and organization matters, social media privacy issues, counseling staff on legal issues and representation in small claims court. Other matters involving litigation, arbitration or major projects generally fall outside the scope of general counsel duties and the fees are negotiated separately.
Retaining a lawyer in today’s climate is a good thing and should not be considered adversarial. In fact, being able to refer a prospective business partner or client to your general counsel indicates a responsible and established level of business sophistication.