Starting a new business venture requires not just suitable financing options and a well thought out marketing strategy but also specialized legal assistance. There are various issues right from advice on the appropriate type of the new organization to regulatory compliances that require the engagement of legal services for startups. One of the biggest deterrent for owners is the costs involved in hiring a startup lawyer in India and some effective methods to reduce costs while doing so are being presented for the benefit of all businesspersons.
1. Employing A Full- Time Counsel
Many people think that hiring a startup attorney as a full- time employee is not a cost- effective solution when in fact the opposite is true. A new venture needs advice on a variety of issues ranging from the intellectual property assets to employment contracts and taxation and compliance regulations. Seeking out a different professional every time, for instance hiring an intellectual property lawyer for securing of any such assets, can be a very expensive proposition. On the other hand when you engage a lawyer as a full- time employee on your payroll, the only costs incurred will be payment of the salary and other specified company benefits. Moreover, looking for a suitable attorney every time a need arises will only result in wastage of time and can prove detrimental for the new organization. In circumstances which require the attention of a specialist, the employed professional can help by using his/ her contacts to find the right expert. Business owners must, therefore consider hiring a lawyer as a full time employee of the organization who can provide valuable guidance on all issues.
2. Engaging A Law Firm
Entrepreneurs who do not want to hire an in- house lawyer can always engage a law firm for the purpose which can give advice on all matters as and when required by the company. Finding a firm which specializes in helping startups or small businesses in legal matters is not a difficult task as there are a number of agencies which provide such services. While using the services of law firms on a case by case or hourly basis can be an extremely costly proposition, signing a contract with them for a long duration will be helpful in saving money and guaranteeing access to competent legal counsel at the same time. Not only firms but many attorneys also offer their services for specific matters at pre- decided fees. Such individuals as well as firms usually have economical packages for routine services like composing drafts for employee contracts or commonly used business agreements. However, when choosing this mode for accessing legal guidance, the owner should ensure to educate himself/ herself on all relevant legal matters and the kind of services that will be most suitable for the enterprise.
3. Hiring A Lawyer As Temporary Employee Or Independent Contractor
Another good way to save on legal fees while hiring a startup lawyer in India is to hire an individual as a temporary employee with your company. The professional can also be engaged through a contract for a limited period of time specifying the nature of services that he/ she must provide. Some businesses may not require guidance on legal matters throughout the year and need help from lawyers in specific cases only. This model can be extremely beneficial for such enterprises as the costs involved in hiring or contracting the lawyer for a limited period will be much less as compared to hiring a full time professional drawing monthly salary or signing up with an agency for longer duration. There are many independent attorneys who are open to working with startups for short duration and also do not charge much fees. It is important though that before engaging any such professional, you run a thorough background check and conduct an interview with the individual to assess his/ her competence and suitability for the job.
4. Using Alternative Methods to Compensate The Professional
Most new enterprises have limited liquid capital assets making it difficult for them to meet the regular payment requirements of hiring full time in house professionals. In such cases, owners can explore alternative methods to pay the compensation to the lawyer which they will find much more attractive than regular fees or salary. Let’s take a look at some of the alternative ways that can be used by businesses with low cash to pay lawyers :
i. Equity Compensation : You may pay the attorney the whole fees or a part of it in the form of equity of your company. Some professionals may be hesitant in accepting this offer but if the right amount of trust exists between the two parties, such an arrangement can be made.
ii. Company Benefits : A lawyer can be persuaded to accept lower fees by offering him/ her the company benefits that are given to all other full time employees. Not only an in- house professional but also contracted lawyers or those hired as temporary employees can also be included in the benefit plan so that they may be hired at reduced costs.
iii. Company Warrants Or Options : an offer of a company warrant or option to buy equity at a future date can also be made to compensate the lawyer’s fees. This can be an attractive proposition for a legal professional if the valuation of the company is expected to rise in future.
5. Buying Common Contracts & Agreements Templates
If the business does not require continuous legal guidance and only needs assistance in specific cases at long intervals, then owners can save money by purchasing templates for some regularly used contracts and agreements. They can engage an individual or a firm to draft a template for hiring full time or part time employees and some other agreements like vendor or supply contracts. It must be ensured that the documents cover all possible scenarios and are helpful in safeguarding your interests.
It is essential to hire a startup lawyer in India for all new enterprises as the professional will provide valuable advice on a range of legal issues as well as some other important matters like the most appropriate funding method for the company. All entrepreneurs therefore must earmark a budget for finding and engaging a competent attorney with their organization.