Under a contingent fee arrangement, an attorney does not get paid until the entrepreneurreceives a certain payment. An entrepreneur may want to make payment contingent on receiving venture capital or other investor funding especially if he or she wants to test the feasibility of the venture. Attorneys may defer billing rather than agree to a contingency fee. They may also accept stockin the business in exchange for deferring the billing. This would make the law firm aninvestor in the business and can create a conflict of interest.
Some attorneys ask for a retainer, an up front payment that insures they paid.
By being organized, prepared and proactive, an entrepreneur can use an attorney moreefficiently. Some attorneys will be willing to attend one board meeting a month free ofcharge. This will keep the attorney updated on business developments and able to rendersome free legal advice. Firms will also charge for other costs such as making photocopies, word processing, online research, toll calls, faxes, filing fees, travel expenses and messenger services. Entrepreneurs should determine what the firm will charge him or her for and may negotiatehow the firm will bill for incidental costs.