There are estimated to be over 30 million businesses in the U.S., according to the U.S. Census in 2022. Most of these businesses are required to deal with the legalities of setting up and running their business operations. One of the biggest mistakes business owners make in this process is not obtaining legal advice in a timely manner. There are many benefits of having access to a business attorney via a retainer arrangement.
Legal retainers enable businesses to strategically arm themselves with a legal expert who can provide timely assistance and advice.
For businesses, small and large, there are numerous legal issues that arise during the ordinary course of business. These can include everything from employment disputes, contract problems, intellectual property issues, debt and tax liabilities, real estate problems, and the filing of legal and regulatory documentation.
Seeking legal advice as a last resort often means that small legal issues can become complex and difficult to resolve.
Instead of hiring a lawyer when things go wrong and having to pay high hourly rates, a retainer agreement guarantees that your business has access to a lawyer you already know, and for a payment that has already been agreed upon.
Many companies find themselves embroiled in lawsuits that could have been avoided if legal advice was available quickly.
Having an attorney on retainer means that a business pays a monthly fee to have the services of an attorney as and when they are needed. In return for the payment of the retainer fee, the attorney will provide legal services and advice specific to your business needs.
Companies have attorneys on retainer to ensure that they have someone in their corner who protects and manages their legal interests.
Essentially, a retainer agreement is like a prepayment for a specific number of hours of advice from your attorney. It is an ongoing contract that ensures the attorney reserves time for their business clients.
The retainer agreement itself is the formal document that outlines the nature of the relationship between the business and the attorney. The retainer agreement will set out the expectations from each party in terms of payments and scope of service.
Retainer agreements work best for businesses that do not want the hassle or expense of employing a full-time lawyer or sourcing legal advice every time a legal problem arises.
Most businesses will need the services of an attorney at some point whether it is to manage risk, undertake documentation reviews and drafting, or provide essential advice.
Although each retainer agreement will vary depending on the business type and needs, there are certain specifics every retainer agreement covers.
Most retainer agreements will include:
- the scope of the legal advice and work to be provided
- how the services will be provided
- the modes of communication
- ground rules for services requested and provided
- the fees payable
- the frequency of the retainer fee payable
Not only will a retainer agreement help you to secure the availability of an attorney you will also benefit from bespoke legal advice that is tailored to your specific business needs. As a business, you can delegate any legal issues that arise to an attorney.
If you own a business you will not only need to be compliant with state and federal laws; you will also need to ensure your business complies with regulations and rules relating to your industry.
Retainer agreements are becoming increasingly popular with small to medium-sized businesses who want to have cash flow and expenditure stability, and who want to manage and mitigate their risk profile.
It is important to be as clear and transparent as you can when negotiating your retainer agreement. This will ensure that your attorney can provide you with an agreement that is comprehensive and covers your specific business needs.
Having an attorney on retainer means that you can source and hire an attorney who fits your business needs. Having a law firm on retainer means that when you need advice you are not required to go out and find a lawyer each time. Your attorney will be available for you as and when you need them and will have a good understanding of your business needs.
Many law firms will offer you retainer packages that are flexible to meet your specific needs. What this means for your business is that you have access to attorneys from different specialisms and can adjust your requirements as the needs of your business develop.
Of course, a retainer relationship means that you will already have evaluated whether the attorney and firm can provide the bespoke advice you need. There is no point hiring a family lawyer if you need tax advice. A retainer agreement means that from the outset you can identify your legal needs to fit your business so that when you need that expert piece of advice it is available to you.
Paying a retainer fee is a cost-effective way of ensuring you have access to legal advice as and when you need it. Often, retainer fees are far cheaper than hiring attorneys on an ad-hoc basis or recruiting and retaining an in-house legal team. Looking ahead, knowing your legal costs in advance means you can factor them into your business budgeting and forecasting. Law firms have an array of legal specialists who can deal with your legal problems. Of course, outsourcing your legal problems to a law firm means that you can enjoy the professional indemnity insurance they already have in place.
As mentioned above, retainers can save you money and time. If you have an issue that crops up during your business, having the services of a legal expert on hand early on means that you can avoid lengthy and time-consuming legal disputes.
For many businesses, having almost immediate access to an attorney via a retainer means that they can build solid and long-standing relationships with their legal advisors. Not only can you really get to know your attorney, but your attorney will also get to know you and your business. Having this in-depth knowledge of your business means that your attorney can work with you to find quick solutions to any problems that arise and apprehend problems before they arise.
One of the main benefits of having an attorney on retainer is that you have the peace of mind that will come with knowing that you have quick access to expert advice. Having access to reliable representation and advice whenever you need it to protect your business is of paramount importance for the longevity of any business, big or small. For many investors, knowing the business has legal advisors on hand makes the business more attractive.
In addition to all the advantages mentioned above, having an attorney on retainer helps businesses to manage their risk profile. Many business owners will find themselves in legal quandaries frequently as they grapple with state and federal laws, local regulations, business documentation, and tax matters.
Knowing you can reach out to an attorney for answers to difficult legal dilemmas means that you are left to focus primarily on your business operations.
There are many industries and types of businesses that benefit from having a retainer agreement with a law firm, these include:
- Corporate enterprises
- Commercial businesses
- Any business that deals with contracts and agreements
- Real estate businesses
- Start-ups requiring assistance with setting up
- Established businesses requiring help with documentation, employees, and processes
- Businesses with employees that need help with employment law issues
- Sole practitioners
- E-commerce businesses navigating online trading, data protection, and intellectual property issues
- Partnerships requiring risk management and profit-sharing advice
Having an attorney on retainer is a proactive approach for any business. This strategy results in a competitive edge for businesses as they are preventing legal issues before they arise.
Your attorney may also be able to offer you additional services such as important legal updates and issues that concern your business. This means your business can adapt and be ahead of the game when it comes to issues relating to contracts, compliance, and changes in the law.
Forging strong relationships with a law firm via a retainer arrangement comes with many benefits for businesses that are looking for a dynamic framework within which to operate.
What it means in practical terms for your business is that you can focus your energy and time on growing your business, leaving the legal complexities to experts in their field.
Our experienced attorneys are available to discuss your business needs and develop a tailored retainer agreement to suit your budget and business needs.