Believe it or not, you already know the answer to ANY legal question. That’s because the answer to every legal question is always “it depends.” So when someone asks how much does a lawyer charge to start a company, the answer, again, is that it depends.
Lawyers may charge anywhere from $300-5000 to start a company. There is no way of knowing exactly how much a lawyer charges to start a company until you ask. But in general, how much a lawyer charges to start a company depends on 3 major factors:
- What type of entity you form
- How “high-end” the lawyer or law firm is
- What billing method the lawyer uses
Type of Entity
By far the most common entity types are the LLC and C-Corporation. The difference between an LLC and C-Corp is pretty drastic, so it’s best to consult a lawyer to determine which one is best for your business.
LLCs are pretty simple to set up. In most states, all that’s required is filing a couple of documents and paying a fee to the Secretary of State. It’s also a good idea to have a formal, written operating agreement in place.
C-corporations are more complex to set up, and there are more documents involved. More documents means more time, so most lawyers probably charge more to set up a C-corporation than an LLC.
The Prestige of the Law Firm
How much lawyers cost is usually dependent on experience level, location, and the complexity of the legal issue. But, some lawyers are just more “high-end” and they charge more than others for basically the same level of service. This means that how much a lawyer will charge to start a company will certainly be impacted by the prestige of the lawyer.
Big, flashy law firms will almost always charge more than smaller law firms and solo practitioners. But there is also a lot of variation between smaller law firms. The best thing to do is to consult with a few different lawyers so you have options to choose from. You’d be surprised at the level of variation in how much lawyers charge to start a company, and the only way to find out is to ask around.
The Billing Method
Attorney prices and rates are largely determined by the billing method, whether flat rate or hourly.
Flat rate billing means the lawyer will charge a set dollar amount to start your company, determined upfront. Hourly billing means the lawyer will charge you a specific hourly rate for each hour spent working on starting your company.
These days, the majority of lawyers will charge a flat rate to start a company. That rate may be as low as $500 plus state filing fees, or as high as $5000. But make sure you find out how the lawyer will bill you before you decide which lawyer to hire.
Like most legal questions, there is no firm answer to the question “how much does a lawyer charge to start a company.” The only way to find out is to consult with a few different lawyers from different law firms and ask.
It’s always a good idea to work with a lawyer to start a company. Lawyers will not only help you determine which entity is best for your company, but they will also be able to give you a lot of other valuable advice about hiring, taxes, and more.