So you’re starting or currently running a technology company! It’s a well-known fact that most small companies with limited budgets and multiple demands simply don’t think about hiring a lawyer until a problem develops. How and when does a startup or young tech company decide to choose a legal representative? Procrastinating or going cheap on this decision can cost your company dearly later on.

When do I need a lawyer?

You make the call. But even if you don’t engage a lawyer right away, it’s absolutely essential to obtain the services of a good tax accountant from the very start, said veteran Cleveland lawyer Ralph Scola. Many small companies rely on their financial advisor for certain legal matters—and that generally works for a while. But “you can’t represent yourself in a lawsuit if you’re a corporation,” said Mr. Scola. So, “if you’re going to form a corporation, get one.”

• Protect your IP. Any tech company’s first priority is protecting its intellectual property. But according to Mr. Scola, threats can come to any company in a host of disguises: a key employee goes to work for a competitor, you get sued, you sign a big contract and the client breaks it off, your vendors don’t deliver on a high-dollar deal, or they go bankrupt.

  “When a technology company comes to us without legal representation,” said Michael DeAloia of SS&G Accounting in Solon, “we get [it for them] as quickly as possible.”

   

• Be proactive. To protect your business before problems develop, an attorney must know everything about how you do business—and that just doesn’t happen when you hire legal help on a bits-and-pieces basis. Instead, you can easily end up paying more when a problem does develop.

How do I pick a lawyer?

Common sense is as good a guide as any for choosing an attorney.

1. Identify your most pressing issues: for technology companies that’s always intellectual property — typically your embedded capital: what’s in your employees’ heads. “If that is not well protected,” said Mr. Scola, “you’ll be out of business.” Patent protection is critical, so pick a legal representative who has a broad and deep understanding in this arena.

    

2. Make sure you—and anyone else who’ll be dealing with him frequently—feel comfortable with your attorney. “The biggest hurdle is temperament,” said Mr. DeAloia. “Do these people get along?”

A good generalist lawyer will take a much broader view than an accountant or a narrow specialist. But If you need help with a large and critical business transaction (such as a funding round, or selling your business), said Anita Campbell of Anita Campbell & Associates, make sure he’s handled several similar transactions. “When you’re negotiating one of the biggest deals of your company's life,” said Ms. Campbell, “you want a lawyer who has been down the road before. This is not the time to be working with a general practice attorney, however competent he may be.”

How will I know if legal advice is good?

How can you know it’s competent advice?

“You can’t,” said Mr. Scola. “It’s impossible to know whether your professional is doing a good job,” unless you get into serious trouble because of something she does. Unless you’re in the profession, you can really only tell if you’re receiving good service. Tips include:

What kind of attorney should I hire?

Hire someone who can directly or through another party obtain patents and copyrights (software) and who understands trade secrets (if it’s not patentable or copyrightable, you must exercise trade secret protection).

He should also have expertise in handling issues that arise, for example, when an employee is leaving: enforcing any non-compete agreements and prosecuting violations, protecting against the employee walking away with critical information, etc.

You can choose to:

• Hire someone from a firm—the most frequent choice. One person is your contact but she can recommend a specialist in the firm for any particular area of the law.
• Hire a sole practitioner with the background and resources to be good at both general legal issues and intellectual property protection. This works if you choose someone with a broad and deep knowledge base built up from years of experience in diverse areas—and who can recommend experts in other areas as needed.

In summary: go shopping early for legal help, use common sense and pick someone you trust who gets results.

Disclaimer:  The information provided in this article is general information on the legal issues presented and should not be regarded as a  substitute for individual legal advice from an attorney.

The above article is presented as a community service by San Diego lawyer for you  with the permission of the author.