BUSINESS
Consultant vs. Attorney
Independents and Firms
| CONSULTANT | ATTORNEY | EXPENSE | Rates are 1/2 the hourly charges of most experienced business law firms. | Law firms have huge overhead, and charge accordingly. High legal fees do not guarantee quality of counsel. Rates of qualified business attorneys in large firms average about $300 per hour | TIME | Specific and accurate information is critical to developing an overall plan to achieve the defined needs and goals. Defining, accumulating and processing information is time consuming | Due to the high hourly rate, most clients are reluctant to communicate with their law firms unless absolutely necessary. Because your attorney is limited by your budget, there is little time to identify and discover your needs and wants or the peculiarities of your business | EXPERTISE | Extensive high-tech experience combined with traditional legal knowledge allows for quick and accurate assessment and implementation of a customized, comprehensive and realistic Business Plan | Because your attorney knows only the basics about you and your business, he will provide you with boilerplate counseling and documentation. The law firm is expert in applying business law identified and created from severely limited knowledge of the client, the product and the market | COUNSEL | The best business and legal advice is dictated by a comprehensive and realistic Business Plan. The better the Plan, the more accurate the advice. | Law firms determine your business needs from legal software, advising that you and the Business Plan conform to preconceived models. Commonly, companies are counseled as if they were IBM - an unrealistic, expensive and dangerous practice | BUSINESS EXPERIENCE | A Business Plan is only valuable if it is built upon accurate documentation of facts and creation of reasonable assumptions - identified and implemented by a knowledgeable and experienced team with related business-world experience | The only business that lawyers know is the legal business. Very few have practical, hands-on experience and don't appreciate that everything flows from an overall plan tailored from extensive research of the industry and the needs/desires of individuals comprising the team | MUSCLE | The independent Consultant is perceived as weak by those lawyers representing potential investors, licensees and purchasers. Overcoming this obstacle is time-consuming and expensive | Large, reputable law firms have clout. Power is essential in some business dealings. Doors open more quickly when the letterhead demands respect and profit potential increases with the perception that you can afford, and are getting, the best counsel | INSURANCE | Independent Consultants rarely have large Liability Insurance coverage, if any at all. If the Consultant botches important legal documents, there is really no financial remedy for damages | With the big firm comes extensive Liability Insurance. If damages result from their negligence the insurance is liable for all related damages - sometimes amounting to many millions. Catch 22: Law firms have you sign agreements excluding them from responsibility if they are provided incomplete or erroneous information by the client. Extensive fees must be paid to the firm to fully educate their lawyers |
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When to Bring in the Big Guns�
A qualified and reputable law firm must be part of the complete Business Plan. Examples of when such a firm is most valuable include:
Patent and copyright issues
Reviewing major formation documents
Finalizing capitalization agreements
Negotiating and finalizing major licensing/sales agreements