Nonprofit organizations often bypass much-needed legal services because they're operating on a limited budget. But it's often cheaper to avoid problems than to fix them. Plus, with many options available for obtaining legal services, your charitable organization should be able to get needed legal advice without spending huge sums. Ask a lawyer.
Here are some questions and answers about when and how to bring in an attorney for help.
How Much Will a Nonprofit Lawyer Charge?
The total cost will depend on the services you need as well as the lawyer's fee structure. Most lawyers charge in one of these ways:
Hourly fee. This is the most common way that lawyers charge for services. Fees usually start around $150, and go much higher for lawyers who are experienced or work in bigger cities.
Flat fees. The benefit is that the client will know exactly what to expect up front. They're not appropriate for every type of service, but lawyers may willingly charge a flat fee for 501(c)(3) exemption paperwork, contracts, business formation, intellectual property, and real estate transactions.
Hybrid fees. A combination of hourly and flat fees is also an option, especially in litigation. For example, a lawyer may charge a flat-fee for preparing and filing a complaint or answer, and then hourly fees for depositions and trial work.
You can likely begin your relationship with the attorney with a free consultation, by phone, in person, or through a service like Skype. This could last as little as 15 to 30 minutes. A paid consultation might last an hour or more, and you'll get more in-depth information.
Why Can't We Find a Free Lawyer to Help Our Nonprofit?
Your nonprofit would doubtless rather spend its limited funds on its cause rather than on legal advice. However, many lawyers won’t agree to this type of arrangement. After all, you want a lawyer who specializes in nonprofits; but if none pay, how is the lawyer going to earn a living?
Alternatives are available, which will allow your nonprofit to gain valuable legal services without breaking the bank. Ask about:
Reduced fees. If a lawyer’s normal hourly rate is $200, you might try to negotiate a lower rate of $150 or $100. Some lawyers will reduce their fees for a good cause.
Limited scope representation. This means the lawyer handles only a certain part of your legal needs. For example, if your nonprofit is filing for 501(c)(3) exemption, its board members could prepare the paperwork and then hire a lawyer solely to review it before filing.
Payment plan. For example, if your lawyer charges a flat fee of $2,000 to form your nonprofit and file for 501(c)(3) exemption, your nonprofit may be able to pay over a few months, rather than all of it up front.
It may be frustrating that a lawyer won’t represent your nonprofit for free, but keep in mind the amount of time a lawyer will be spending on your legal issue, and that the lawyer is also running a business.
Should I Consult a Lawyer Before Forming a Nonprofit?
While many tools are available to help form a nonprofit without a lawyer, every nonprofit is unique. It's all too easy to go astray, for example by: