Who you gonna call? Fractional outside counsel!

Most businesses begin with the best of intentions, but neglect to prepare for failure or the consequences of being successful.

Entrepreneurs often have innovative ideas for new products and services or how to profit from an underserved consumer segment, but they are not necessarily equally knowledgeable about operating a business and the financial and legal ramifications of that business.

In today’s complex business environment, startups and small businesses need to navigate a minefield of legal, tax and insurance laws, rules and requirements.

Few such business have the budget to employ in-house counsel. However, that does not mean that business owners should forego important legal services or that such services are inaccessible.

The practice of law has evolved to accommodate the needs of new and small businesses through the retention of fractional outside or general counsel. The attorney serves in a role akin to a consigliere of mafia fame.

A fractional outside counsel provides part-time or as needed general counsel services to a business. Such counsel should become acquainted with a business’ goals and operations so that the legal advice can be tailored to meet the specific needs of each client.

Typically, the attorney and business reach an arrangement where the attorney is paid a monthly retainer to be available to answer legal questions, review documents, and provide referrals to attorneys with particular expertise.

The attorney and client enter into a retainer agreement defining the scope of the services to be rendered and the payment structure.

The range of services might include assisting with formation documents, contract review, collection demand letters, employment contracts, litigation advice, and basic employment advice.

The retainer should clearly spell out what is and is not included. For example, the retainer should state that the attorney will require a separate retainer and agreement to file an appearance on behalf of the client in a legal proceeding if that is not part of the engagement.

Attorneys take different approaches to the financial terms of that relationship. Some simply require an advance retainer against which time will be billed. Others may utilize a subscription model where the client pays a fixed amount each month for a certain number of hours. Time billed beyond would be at a fixed rate. Such models often follow a “use it or lose it model” such that if the client does not have the attorney perform work that month, the attorney can retain the monthly fee simply for being available. Under some arrangements, part of the unused time might be rolled into the next month.

The breadth and terms of these arrangements can be customized to the needs of the particular client.

Your business is too important to simply hope for the best. Fractional outside counsel can help you protect your business.

David’s Dicta: Dunn Law, P.A. provides fractional outside counsel services to businesses in Southern Florida.


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