If you want to form an LLC in the State of Texas, the cheapest attorney will charge you $300 for the filing fee and at least an hour of his or her time. In a major metropolitan area, you can expect to pay about $200 an hour for an experienced small business attorney. In rural areas, that amount will be less.
Many attorneys and law firms offer flat-fee arrangements for corporate formation. You can purchase a “package” of legal services that include the filing fees, the time of the attorneys, and whatever extra documentation your new company requires. For a small company with between 1 to 5 initial employees requiring a custom operating agreement, you can expect to pay between $1,000.00 to $3,000.00.
Does such a high cost make sense? Often, yes, it does. The value one receives from an attorney translates to corporate security and peace of mind down the road. Additionally, you can provide solutions within your corporate formation to common problems and issues raised during normal business operations.
What happens if one of the partners dies? What happens if the company is audited by the IRS? What happens if one of the partners wants to dissolve the entity? What happens to profits? Who gets paid and when? How does the business operate on a daily basis?
These are all questions that the operating agreement or corporate documents should answer. A lawyer can cleanly, swiftly, and confidently draft all the necessary documents, leaving you to focus on running your new business.
Here are some suggestions for picking a small business attorney:
1. Take the time to sit down with a variety of lawyers in your area;
2. Feel free to suggest alternative fee arrangements and discuss flat or package pricing;
3. Write down all your questions beforehand and remember that it should be a two-way discussion;
4. Tell the attorney your vision for the company and ask them what they would do to make that vision a reality;
5. Ask yourself: “Is this the attorney I want to work with going forward?” It might make sense to hire the cheapest attorney now, but if your business is successful, chances are you will need the services of a good attorney again;
6. If possible, ask friends and colleagues for referrals. The best way to find a good attorney is by finding a person who had a good experience;
7. Be frank with the attorney on how much you can spend. Set expectations early.