o operate a business as effectively as possible, finding a lawyer could be an integral part of a management plan. When is the right time to begin looking for a lawyer, and how does anyone go about it?

In the United States, as of January 1, 2023, the number of active attorneys totaled 1,331,290, according to the American Bar Association National Lawyer Population Survey. That’s approximately equal to the number of active-duty US military personnel.

The number of active lawyers counted by the survey inched up slightly by more than 4,000 from 2022. In the previous decade, the number of lawyers increased about 5 percent each year. Three places—Florida, the District of Columbia, and Ohio—represented the bulk of the increase.

On the other side of the ledger, among twenty-two states reporting a decrease in lawyers, Alaska’s 7 percent drop was second only to Alabama, which lost 15 percent of its lawyers in the past decade.

According to the Alaska Bar Association, 2,486 attorneys are actively practicing law, and 4,160 lawyers are licensed to practice law in the state.

For sure, by the time an employer has at least three employees, according to Kim Dunn, a partner with Landye Bennett Blumstein in Anchorage. Dunn, whose practice focuses on employment, housing, and nonprofit organization law, suggests that one of a business’ first legal chores is to check that it is complying with state employment laws. A lawyer could also help craft a short set of rules or policies to cover a workforce of four or more.

“This can be the size where a company starts hiring people other than friends and family, who might be more likely to make legal claims,” she notes.

At this early level, Dunn continues, much of the legal advice covers basics: how to compensate lawfully, fulfill state labor requirements, and plan for growth. “This can be less than an hour’s worth of legal work, depending on the company’s existing knowledge and know-how,” she says.

That’s because, Slottee continues, “the lawyer can help them proactively rather than coming in after the fact for a cleanup when options may be more limited.”

Adds Ben Spiess, a corporate and real estate attorney with Landye Bennett Blumstein in Anchorage, “Clients should consult with their attorney early in the process. For someone launching a business, they should work with a lawyer before they form their corporation, LLC, or other business entity.” Furthermore, someone buying or leasing real estate “should consult with their lawyer before drafting the term sheet or entering into a lease or purchase agreement.”

Lawyers, Spiess continues, “are much better at avoiding problems than solving them after they occur. Put another way—avoiding mistakes is cost-efficient. Fixing them is expensive.”

If a state or federal agency gives notice of enforcement or potential violation, that’s definitely a time to call a lawyer. For some claims, “you should also check with your insurance broker to see what might be covered by insurance and whether you have to give notice to your carrier,” Dunn adds.

Tapping the expertise of an attorney later, rather than sooner, can potentially have consequences. Slottee says, “It might be harder, more expensive, and there might be areas in which you’ve foreclosed certain paths that might’ve been better.”

He shares an example in which someone begins negotiating a sale or commercial transaction without getting a lawyer involved. Later in the process, Slottee says, “They might ask the lawyer to draft a transaction based on their discussions. At that point, the discussions might not be binding but may have set the boundaries for negotiations or structure going forward.”

An attorney could have significantly altered the circumstances. Slottee observes, “The lawyer might’ve been able to identify potential issues and opportunities beforehand, [which] could have improved the structure or the flow of the deal.”

Nevertheless, another reason a business might refrain from retaining a lawyer: what else? Money, says Slottee. In which, the client might be making some inaccurate assumptions.

Many businesses view lawyers as a “cost sink who charge a lot of money and add no value,” notes Spiess. However, he adds, “in business as in medicine, an ounce of prevention is worth a pound of cure. A business well organized can avoid costly mistakes down the road; a real estate transaction structured correctly will close quickly with a minimum of issues.”

Average rates range from roughly $200 to $400 per hour, but an affordable amount of time might be all it takes. “You don’t need to hire a lawyer and spend thousands of dollars. With a ‘good lawyer,’ that shouldn’t be the case,” Slottee says. “You just call someone—hopefully, a lawyer with whom you have a relationship, and who understands your business. You explain the issue and ask what they think. If you have an ongoing relationship with a lawyer in your industry—someone who knows your business, your industry, and your background—they should be able to provide timely and cost-effective advice.”

The conversation could be brief “but provide assurance that you at least checked on potential issues—or they might at least flag issues that you could address either on your own or with the help of your lawyer,” Slottee adds.

The bottom line aside, fear of intimidation also could factor into reluctance to consult a lawyer. Slottee says, “I think a lot of people worry about calling a lawyer because it can seem nerve-racking, and they’re worried about being nickeled and dimed.”

A solution? Establish a working relationship over a course of years. “It’s going to be a lot easier for them to provide really cost-effective work,” Slottee says.

That relationship could pave the way toward balming a business owner’s level of ease in touching base with a lawyer if an issue arises. “[You’ll] feel much more comfortable calling them [regarding] minor or upfront issues,” Slottee adds. “Have that ten-to-thirty-minute call. That could really save you a lot of money and heartache.”

While new businesses might be reluctant to interact with a lawyer, Dunn explains that new clients can find it easier than expected to get useful legal advice. “My guess is that negative impressions come from movies and TV—or there’s fear that a lawyer will charge for even a brief phone call,” she says. “In fact, as lawyers, we’re screening you, too—and most of us don’t charge for that initial review.”

According to an advice column by Illinois-based Midwest Law Works, startup businesses have several reasons to hire an attorney:

• Legal entity formation
• Contracts and agreements
• Intellectual property protection
• Compliance with laws and regulations
• Risk management and litigation support

Naturally, not everyone double clutches before turning to an attorney. Some clients “definitely are open to working with lawyers, which they’ve done multiple times and feel free calling them,” in Slottee’s experience. Typically, in those circumstances, “they have an ongoing and historical relationship with a particular firm or lawyer and feel really comfortable [contacting] them,” he says.

Just as not all business owners harbor the same perspective on tapping an attorney, attorneys aren’t carbon copies either. Thus, when it comes to ensuring professional compatibility with a lawyer to handle specific business needs, take your time.

While, yes, lawyers are available for the “big moments,” when it comes to daily matters, a business attorney is ready to help. For a business owner, a knowledgeable expert can dispense guidance on issues from transactions to terminations, and much in between.

Once businesses decide to engage a lawyer’s services, they must consider the matter of sourcing one. In doing so, Dunn suggests trying to ascertain a couple of important factors:

• Is this a lawyer who’s dealt with these issues in the past?
• Do they understand my industry and the nature of my business?

Answering those two questions enables attorneys to provide the most cost-effective and relevant legal advice for a client, she points out. Sourcing can unfold in numerous ways. For example, Dunn recommends contacting a business network or industry association and asking questions about cost, responsiveness, and trustworthiness.

For free legal advice related to employment matters, “the web is a great resource for getting a sense of an issue, why it’s important, and what liability you might face,” she notes. “Employment lawyers are comfortable putting free advice on the web because employment law is broad, complex, and different between locations.” Dunn adds that free advice from the internet does not reduce the demand for specific legal advice.

When using free or borrowed templates for legal documents, though, Dunn preaches caution: “Don’t adopt a personnel policy or handbook that’s too elaborate for your company.” She often sees policies that “over-promise” or are the wrong size for a small business.

Slottee says he’d focus primarily on referrals and those with industry knowledge. “[Talk] to other people in your industry that do the same things that you’re doing or that have dealt with a similar issue. Ask if they’ve worked with a lawyer and whether they were effective and efficient,” he says, and ask if they were satisfied with the lawyer’s level of performance. “You’re going to know a lawyer by the work product they provide. Get a recommendation.”

Outside of a network of industry connections, look up lawyers online. “Everybody’s got a website,” Slottee says, but he agrees with Dunn that “you want to work with someone who understands your industry, recognizes the issues you would deal with, the trends in your industry, and the pressures you’re under.”