The next two columns will be about choosing and using lawyers. First up, the choosing side of the equation.
I have a number of clients who might be called "ma's and pa's" or "start-ups". That is, they're people who haven't had much entrepreneurial experience, but who find that - after too many years of working for someone else - they want to start their own business.
Apart from the dozens of decisions that have to be made before taking the great leap forward, they need to hire lawyers and other professionals.
Here are some pointers on how to start the process:
First, you may be tempted to save a few (thousand) dollars and forego a lawyer entirely by downloading all your business contracts off the Internet for $49 or less. Some lawyers love it when future clients download contracts and other documents from the equivalent of Limewire for a song (as if it were a song). Invariably, the wrong document will be used with customers and clients, the wrong legal terms will be included, the right ones will be excluded, the documents may be written pursuant to California or Nevada Law (and therefore inapplicable or barely applicable to Canada), and a host of other mistakes will be made that will cost more to fix had the client done it right from the get-go.
Make all the lawyer jokes you want, but the right lawyer should be able to help you craft the right documents and provide the right advice so you're not visiting the firm's litigation department to solve the problem of unenforceable contracts, unintentional personal covenants or faulty incorporations.
Second, whether you're starting a restaurant or supply company, you don't always need a Big Brand Name Bay Street (or, in my neck of the woods, Burrard Street) law firm to do the work for you. There's no doubt lawyers are expensive, but those in Big Firms can be much pricier than ones outside the downtown core. There's a conceit that the best lawyers practice "downtown" in the big cities and the others don't; something I think is complete garbage. Some of the best and brightest practitioners I know work on their own or in small firms outside the city core. Why? Because their client base is there and they want to be close to them, because they pay less overhead than their downtown colleagues at the big firms or because they've been there, done that and just prefer Kelowna or Oakville to Vancouver or Toronto.
Although I'll be first to admit that a law firm's reputation is important, but the personal relationships that a lawyer forges with clients is key. It's human nature to want to work with the people you enjoy working with. Personally, I've always wanted, and enjoyed, having long-term clients that I professional and social relationships with, ( i.e. we can go for lunch and talk business, or talk about our kids).
What's the benefit of a big-name firm? For lawyers, they offer a "critical mass" of expertise in specialized areas, a larger client base to provide legal services to, a greater source of referrals and the option to distribute work to lawyers within the firm. There's also a certain panache tied to a big-name firm's brand, which weighs heavily. Without that, every lawyer would likely be on his or her own.
The legal practice in the U.K. is historically divided between barristers (those who go to court and are often called litigators in Canada) and solicitors (those who do business law, real estate and probate; draft contracts etc.). In most of Canada, lawyers are barristers and solicitors, so we walk both sides of the street. Americans use the term attorney for lawyer. We generally don't.
In Canada, there's nothing stopping a full-time solicitor from going to court or a full-time barrister from drafting a shareholder's agreement, except his or her comfort level and insurance coverage! However, some lawyers are quite comfortable - and competent - doing solicitor's work in the morning and barrister's work in the afternoon. I call them "solitigators".
In our country's larger urban centres, the legal business is compartmentalized such that litigators rarely draw up business contracts. In smaller towns, however, you might find that everyone does everything, even though setting up a business is really solicitor's job.
Third, make sure you do your research. Choosing a lawyer might be a matter of convenience (the office is nearby), legal acquaintances ("my wife's cousin is a lawyer") or by word-of-mouth. If not, you'll have to do your homework. Two easy options are to ask around or consult the web. If there's a specialty to the legal area you need - say "builders liens" -do a Google search for "builders liens lawyers" in quotations with your city in the search field. This will direct you to the web pages of some candidates, whose web biography will (or should) give you more information on their experience in the area. And if your business involves something really specialized like "biotechnology," you'll definitely need a lawyer with expertise in that field.
Lawyers who recognize that the web is everything understand how to use it. It's an ideal place to advertise their experience and expertise to the international marketplace. They might use the web to post articles they've written about their practice, cases they've been involved in, and with consent, a list of representative clients. They might have written a book or two as well. You could also check their public biography on LinkedIn, or search Google news to see if any of their cases have been covered in the media.
When conducting your search, be cognizant of the fact that some ads on the web are paid for by the lawyer and that these may affect how high their firm appears in search results. Sites like lawyerratingz.com and canlaw.com may help you by reading comments left by happy - or unhappy - clients. But warning: there's no way (at least that I'm aware of) to see if your lawyer is being investigated by its governing law society in Canada. If it really concerns you, ask.
If a lawyer hasn't adjusted his or her personal privacy settings on Facebook, you may well find him or her there too. And if your lawyer-to-be is posting or doing things which makes you question this person's character or sanity, you can always keep looking for another lawyer. Lawyers who don't look after their online reputations on Facebook and other social media deserve all the work they don't get. "Our reputations," the saying goes, "is all we lawyers have." Given the digital footprint we all leave on the internet, its more true today than ever.
So unlike 25 years ago when I started, there's a plethora of online information available to you to help you find the right lawyer to help you start your new business. Just as you'd do your homework on a new dentist or new supplier for your business, the web lets you check out your potential lawyers as well. Use it.
Nov. 9: The other side of the equation: legal fees and how they're charged.
Special to the Globe and Mail
Vancouver franchise lawyer Tony Wilson is the author of Buying A Franchise In Canada – Understanding and Negotiating Your Franchise Agreement and he is ranked as a leading Canadian franchise lawyer by LEXPERT. He is head of the Franchise Law Group at Boughton Law Corp. in Vancouver and acts for both franchisors and franchisees across Canada, many of whom are in the food services and hospitality industry. He is a registered Trademark Agent, an Adjunct Professor at Simon Fraser University and he also writes for Bartalk and Canadian Lawyer magazines.
Tony Wilson