Chapter 3: Selecting and Working with an Attorney

Non-time related expenses may include all of the following, except:

*a. Paralegal's work* b. Photocopying c. Filing fees d. Travel

If Philip requires fast turn-around times and prefers an attorney who has access to many other specialists, the best type of firm to represent his company would be:

a. A solo practitioner b. A small boutique firm *c. A large law firm* d. Online legal resources

Amy is in the process of finding an attorney to represent her new business. Which of the following would be appropriate steps that would lead her to find a suitable attorney:

a. Amy should decide whether she wants to work with a small or large law firm b. Amy should interview as many attorneys as possible c. Amy should obtain references and speak with entrepreneurs who have worked with the attorney *d. All of these are correct*

The best type of legal billing arrangement for a startup is:

a. Daily b. Semi-annually *c. Monthly* d. Yearly

Susan has patented a high technology invention and wants to start a company to commercialize the invention. She has interviewed Attorney A to represent her company and learned that this attorney has significant experience coaching entrepreneurs, licensing technologies in her field and has many important contacts in the venture capital community. Attorney A has the potential to:

*a. Act as a strategic partner to create value* b. Focus exclusively on legal matters c. Focus exclusively on business issues d. None of these are correct

All of the following are valuable services that an attorney can provide, except:

*a. Offering legal advice on every single aspect of the business' legal issues* b. Pointing out issues that the entrepreneur may not have considered c. Introduce entrepreneurs to sources of capital and board members d. Handle legal matters that arise as the business grows

Sharon keeps accurate and detailed notes and records related to her business and provides these to her attorney. She also keeps a running list of her legal questions and concerns to discuss with her attorney whenever they meet. Sharon is working cost effectively with her attorney through:

*a. Organization* b. Drafting c. Being proactive d. All of these are correct

All of the following are good techniques for finding a suitable lawyer for a new venture, except:

a. Ask friends, colleagues and other entrepreneurs for referrals *b. Run a general Internet search* c. Attend classes, conventions and meetings to meet and evaluate potential attorneys d. Contact the state bar association, local chamber of commerce and local bar associations

Marsha has met with two attorneys. Attorney A works at a large prominent law firm and charges a lower hourly fee, has little experience in Marsha's area of business and takes several days to return phone calls. Attorney B charges a slightly higher hourly rate, has direct experience in Marsha's area of business and replies promptly. Marsha should hire:

a. Attorney A because of the firm's reputation b. Attorney A because it is cheaper *c. Attorney B because this person is a better fit for Marsha's needs* d. None of these are correct

When an attorney receives a fixed payment, or a certain percentage of potential cash flows when a certain event occurs, this is called a:

a. Flat fee *b. Contingent fee* c. Deferred fee d. Retainer

An upfront payment requested by an attorney is called a:

a. Flat fee b. Contingent fee c. Deferred fee *d. Retainer*

Sarah started a company that has yet to generate any cashflows and she lacks investment capital and no access to capital. The best arrangement for structuring her legal fees at this point is:

a. Flat fees b. Hourly fees *c. Deferred fees* d. Retainer

A strategically astute attorney can enhance the bottom line of the enterprise by:

a. Helping craft the best structure for the business b. Providing sound advice regarding the legality of various possible courses of action c. Acting as a sounding board for both business and legal issues *d. All of these are correct.*

Marcos launched a small business by inventing, patenting and commercializing a new hand tool. Big Co. has produced a cheaper knock-off version of the tool and is violating Marcos' patent. Litigating a patent will cost at minimum several hundreds of thousands of dollars, which Marcos cannot afford. In this situation, Marcos can:

a. Hire a litigator from a large law firm who will assemble a large and highly qualified team and charge hourly fees b. Hire a litigator from a small law firm who will charge hourly fees *c. Hire a litigator who will agree to a contingent fee structure and require payment only if Marcos obtains a settlement or jury verdict* d. Save the cost of hiring a lawyer by representing himself in court

Legal fees can be structured as follows, except:

a. Hourly fees *b. Subscription fees* c. Flat fees d. All of these are correct.

A strategically astute attorney can help the management team:

a. Identify and seize opportunities b. Marshal and deploy resources c. Manage risk *d. All of these are correct.*

John is ready to launch his own venture and is considering whether to hire an attorney to handle initial legal matters. Which of the following is the best approach towards resolving these initial legal matters:

a. John should avoid the cost of hiring an attorney and rely solely on published legal guides and forms *b. John should seek a legally astute lawyer with experience advising startups* c. John should learn about the legal issues and resolve the matters on his own d. None of these are correct

Juan prepares a patent application draft ahead of time to share with his patent attorney so they can begin the patent application process. Juan is working cost effectively with his attorney through:

a. Organization *b. Drafting* c. Being proactive d. All of these are correct

Jill frequently updates her attorney about business developments and she frequently reads blogs and trade articles related to her business that involve cutting-edge legal issues and forwards these to her attorney. Jill is working cost effectively with her attorney through:

a. Organization b. Drafting *c. Being proactive* d. All of these are correct

The bulk of costs related to legal expenses come from:

a. Photocopying b. Online research through legal subscription services *c. Attorney's and paralegal's time* d. Filing fees