How Much Does a Business Lawyer Cost

Understanding the cost of hiring a business lawyer is crucial for small business owners. Many people are surprised by how unpredictable legal fees can be, making it vital to gain clarity on what to expect. 

In this post, we'll demystify the cost of hiring a lawyer for your business, explore different fee structures, and highlight how a business lawyer can be helpful. 

By the end, you'll have a better understanding of what it may cost you to hire an attorney and be better equipped to make informed decisions for your business. 

Understanding Small Business Lawyer Costs

Billable hours are by far the most common way lawyers charge their clients, and it's the structure most small businesses will encounter. These rates vary based on the lawyer's experience, practice area, and location. 

In Illinois in 2023, the average rate was $305 per hour across attorneys of different experience levels, practice areas, and geography. 

For a small business lawyer, the Illinois average for 2023 ranges from $305 to $409 per hour depending on the particular area of practice. 

In many instances when you hire a law firm, there will be a partner and an associate working on your matter. Each may bill at a much different rate, totaling the averages above. 

Based on our experience, in smaller cities and with smaller law firms, you can expect to pay on average between $300 and $400 per hour for a small business attorney. 

With larger regional law firms, the prices tend to creep up to $400 to $500 per hour or more. If the lawyer is located In Chicago, the rates tend to trend toward the higher side of the range. 

If you were to hire a large national law firm, billable rates can reach up to $1,000 per hour or more. 

The most difficult part is that the total cost to complete a project is often unknown, because it depends on how long the work takes. In many instances it could range from several thousand to tens of thousands of dollars. 

This unpredictability can be a significant pain point for small businesses, making budgeting and financial planning more challenging. Unexpected legal costs can strain resources and disrupt business operations. 

That is why many small business owners find seeking alternative fee arrangements, like subscription legal services and flat fee pricing a better option.

Common Fee Structures

Hourly Billing 

Hourly billing is by far the most common fee structure. 

In most situations, you are charged based on the hourly rate for every tenth of an hour. 

With this method, every phone call, email, and brief consultation is billed. 

While this can be straightforward, it is unpredictable and can potentially lead to high costs. The final bill depends on the total amount of time the lawyer spends on your matter, making it difficult to budget and plan. 

And if you sent and received a lot of emails, you can expect to see quite a few “0.1” charges. If you’re paying $350 an hour, that’s $35 for every email!

We find that the unpredictability and irritation this causes too often results in small business owners not consulting with their lawyers when they should. Which can lead to little problems growing into big ones because they were not addressed early. 

Flat Fee 

A flat fee arrangement involves paying a single, predetermined amount for a specific legal service. 

This can be beneficial as it provides clear cost expectations and eliminates the uncertainty associated with hourly billing. 

It’s particularly useful for routine matters like drafting contracts, setting up a business entity, or performing audits. 

Subscription Legal Services 

Subscription-based legal services offer ongoing legal support for a fixed monthly or annual fee. 

This model is ideal for small businesses for two reasons. 

First, it provides predictable costs that make it easy to budget. 

Second, it encourages small business owners to seek advice early and avoid problems, as opposed to trying to fix them later. 

It allows you to focus on growing your business, as opposed to DIYing a legal solution. 

Subscription plans often include a range of services, like contract review, drafting, and management, employment law support, data privacy and compliance solutions, corporate governance, dispute resolution, and more. 

While hourly billing can lead to unforeseen expenses, flat fee and subscription services offer more predictable and manageable costs, making them attractive options for small businesses looking to control their legal expenses.

How a Business Lawyer Can Help

Business lawyers handle a wide range of legal issues that small businesses may encounter. Here are some key areas where their expertise can be invaluable:

Employment Issues Business lawyers can help with various employment-related matters, including:

• Employment Policies: Crafting clear and compliant policies to guide your workplace.
• Hiring and Firing Advice: Providing guidance on best practices and legal requirements for hiring and terminating employees.
• Handling Disputes: Assisting in resolving conflicts between employees and management.
• Conducting Investigations: Leading internal investigations into workplace issues.
• Compliance: Advising on adherence to state and federal employment laws.

Drafting and Reviewing Contracts Business attorneys can help with structuring and reviewing contracts and advise on contract lifecycle management and risk parameters for different types of agreements.  

Dispute Resolution Small business owners sometimes find themselves in the middle of a dispute. Enlisting the help of an attorney can help streamline reaching a resolution. Disputes a small business owner may face could include: 

• Employment Disputes: Issues between employers and employees.
• Contract Disputes: Conflicts over the terms or execution of contracts.
• Payment Disputes: Disagreements over payments owed or received. 

Advising on Corporate Structure Choosing the right entity and maintaining proper corporate governance is crucial for protecting your personal assets. 

Other Services

• Licensing and Compliance: Helping businesses comply with local, state, and federal regulations specific to their operations. This includes obtaining necessary licenses and ensuring ongoing compliance with all relevant laws.
• Intellectual Property: Assisting with protecting your business’s intellectual property, such as trademarks and copyrights.

Conclusion

With hourly rates in Illinois ranging from $300-$500 per hour, understanding the total cost of hiring a business lawyer is key to making informed decisions for your small business. 

Choosing the right fee structure can help you manage your budget and legal needs effectively. 

Partnering with the right attorney early on can help prevent small problems from becoming expensive major legal concerns down the road.

If you liked the article-share it on social!

Disclaimer: The information contained in this article has been prepared by Small Business Legal Solutions LLC for general informational purposes only. Nothing in this article is intended to constitute legal advice on any subject matter. The materials in this article are not intended to and do not create an attorney-client relationship. Do not act or refrain to act based on any information contained in this article  without first personally consulting with an attorney. Every circumstance is different and must be judged on its own merits.