Some cost-cutting tactics to consider:
l See a lawyer first. It's less expensive to prevent a legal problem than to fight one. If you ask a lawyer to look over a contract after you sign it, it's going to be costly to correct what could have been avoided in the first place.
l Know what you're getting. Be clear about the lawyer's hourly fee and when you must pay it. How are lunches, telephone calls, road trips, etc., billed? Ask about miscellaneous charges ahead of time. Will you pay for postage, photo-copies or first class airfare?
l Examine the details. Ask for an invoice that clearly states who did the work, what they did and how much time it took. When you see the line items in black and white, it may help you re-examine your own procedures. Fewer, shorter telephone chats with your lawyer, for example, might save $300 a month.
l Fixed fee vs. hourly. Although a fixed, or flat, fee for a project sounds good, it's frequently more expensive. Lawyers set their flat fees based on worst-case scenarios of the hours they'll spend on the project.
l Do your part. You don't have to be a lawyer to research a piece of property at the local courthouse or to maintain complete files of legal correspondence and other documents. If clients have their records, it clearly helps, says Jacksonville attorney Leonard Alterman. "If it's a contract issue, they need to bring all their correspondence." He also suggests that after talking with a lawyer "there are letters that clients can do on their own."
Good, Better, Best?
One way to check out a lawyer's standing among his or her peers is to check out the Martindale-Hubbell Law Directory ratings, which are based on confidential recommendations from attorneys and judges. Florida lawyers appear in volume 5, which is available in most large public and law school libraries. (Ratings are not available on Martindale-Hubbell's Web site.) Not all lawyers are rated.
Ratings fall into two categories: Legal Ability and General Recommendation. Legal Ability ratings are "a" (very high), "b" (high to very high) and "c" (fair to high). The General Recommendation rating is "v" (very high), which reflects high ethical standards, professional reliability and diligence. Ratings in both categories are required and only lawyers with a "v" are included. Thus an attorney receives an "av," "bv," or "cv" rating.
If You Need a Lawyer...
• Referral Services
Local bar associations operate referral services in many parts of Florida. The Florida Bar Lawyer Referral Service in Tallahassee (800/342-8011) handles requests from areas without a local service. Lawyers participating in the Florida Bar's program charge $15 for the first 1/2-hour consultation. Local bar associations typically charge $20 to $50 for the first visit.
The University of North Florida's Small Business Development Center (SBDC) has an online Small Business Referral Network that includes Jacksonville area lawyers (www.sbdc.unf.edu/sbrn/). Each listing includes the lawyer's area of specialization, experience, education, professional affiliations and policy regarding first-time visits with clients. Other SBDCs may be able to recommend lawyers.
• Publications
"100 Ways to Cut Legal Fees & Manage Your Lawyer." This 143-page book, published by the National Chamber Litigation Center, an affiliate of the U.S. Chamber of Commerce, focuses on choosing a lawyer and includes sample correspondence on legal matters. To order ($10.95 plus $1 for postage), call 800/638-6582.
The Florida Bar offers several free consumer publications that are useful to small business owners. "Making Legal Services Affordable," "Attorney's Fees" and "A Consumer's Guide to Clients' Rights" are available on the Internet (www.flabar.com/
newflabar/consumerservices/) or by writing to Public Information and Bar Services Department, The Florida Bar, 650 Apalachee Parkway, Tallahassee, Florida 32399-2300.
Plan Ahead, Pay Ahead
For run-of-the-mill legal issues -- sending out collection letters, reviewing contracts and answering managers' questions about hiring and firing -- large companies generally rely on in-house legal staff. Small businesses don't have that luxury, however, and typically must either shell out $125 to $200-an-hour for outside counsel or do without legal help.
There's another option for small businesses, though. Prepaid legal plans, or "legal expense insurance corporations," in the parlance of the Florida Department of Insurance (DOI), are pitching products that offer small businesses access to lawyers at a discounted rate. Here's how it works: A small business pays a monthly fee, anywhere from $19.95 to $125 a month, that covers a variety of legal services. The less expensive plans typically include legal correspondence, telephone consultations, contract review and document review. Higher-priced plans may include pre-trial and in-trial representation. "This is in essence providing an attorney on staff," says David Schlaifer, chief executive of Tampa-based LegalWise.
When plan members need more extensive legal help, participating lawyers offer a discount, usually 25%, off their normal hourly rate. "Anybody who has had a lawsuit against them sees the value in it," says Jeff Lamb, an independent agent in Tampa for Pre-Paid Legal Services Inc.
Pre-paid legal plans must be licensed by the DOI. To verify licensure, check the "Agents and Companies" page of the Consumer portion of the DOI's Web site (www.doi.state.fl.us) or call the Florida Insurance Consumer Helpline, 800/342-2762.
Small Biz Manufacturing
Enterprise Florida's new Capital Access Plus Program (CAP+) is using a $1.5 million legislative appropriation to encourage bank lending for small manufacturing and technology businesses with fewer than 100
employees.
The program is designed for young, fast-growing businesses that fall just shy of a bank's usual lending standards. Participating banks will make loans and lines of credit up to $150,000. The state will deposit an amount equal to 20% of each loan into a loan loss reserve account, which can be tapped by a lender if a borrower defaults. So far, NationsBank, First Union, SunTrust Central Florida and Sun Trust Gulf Coast are taking part in the program, with an additional six to nine banks to be added later.
The Florida program is modeled after similar programs in about 20 other states that have loaned nearly $2 billion. Small businesses interested in obtaining a loan should contact Marti Van Hoose at Enterprise Florida, 407/316-4676.
Courting Cash
Tracy Wang, president of Lacus Technology, knows that financing a start-up isn't easy. Fortunately she's discovered where to look for help.
Seven years ago Tracy Wang came to the U.S. from Shanghai, China, to study biostatistics at the University of North Carolina-Chapel Hill. Graduate school brought her to Florida, where she met Taiwan-native Jin-Chong Tsai. He had an idea for a software product that would allow small businesses to monitor their employees' Internet usage, and Wang liked what she heard. In 1997, relying on Tsai's techno know-how and Wang's business sense (she's working on an MBA at UCF), they started Lacus Technology in Cocoa Beach.
Wang says many small businesses are not connected to the Internet for three main reasons: They have a small budget; they worry about employees surfing the Net; and they fear hackers penetrating their system. Lacus developed Safeguard, an all-in-one server that addresses those issues and costs half as much as buying software and hiring people to integrate and maintain the system. "I don't think there's any product on the market with this combination. With high speed Internet access costs coming down, small businesses will need this more than ever," says Wang. She adds that, for now, Lacus has little direct competition since other vendors provide software with only some of the functions Safeguard offers.
To fund Lacus' start-up costs, the co-founders invested $50,000 of their own money. Wang says that besides research and development efforts, the company was "just sitting there until they became aware of CFIC." The Central Florida Innovation Corp., an affiliate of Enterprise Florida, provides support to a select few emerging companies. Through meetings and workshops, the organization helps clients focus their business plan and develop a marketing strategy.
Lacus now needs around $3 million for sales and marketing, continued R&D, and company expansion in order "to grow aggressively," Wang says. The company recently presented at a CFIC Angel Investor Luncheon. To appeal to investors, Wang is pitching more than just a product: She has polished her business plan and enhanced her business skills. Wang is confident she'll get the investment capital she needs. "It's only a matter of time now." Once Lacus is more established in the U.S. market, the company will pursue Asian and European markets, Wang predicts. Already, the Japan External Trade Organization presented Lacus at COMDEX Japan 1998, where the company made contacts and gained publicity.
Of Lacus, CFIC's business development manager Don Jacobs says, "They have an innovative product in a growing market. With the right marketing strategy and focus, they could generate in excess of $25 million in sales in five years."
Small Talk: Learning Online
The U.S. Small Business Administration launched a new online education resource, SBA Small Business Classroom, to train current and aspiring entrepreneurs over the Net (classroom.sba.gov/xtrainx). Online courses are short (7 to 30 minutes), self-paced learning modules enhanced with graphics, audio and numerous links to other resources. Some
courses will be offered in both Spanish and English. Current classes include "How to Raise Capital for a Small Business," "Are You Y2K OK?" and "The Business Plan." Additional courses on financial assistance, marketing and how to do business with the federal government are planned.
Help for Inventors
The University of South Florida's Small Business Development Center will hold its annual Suncoast Inventors Forum in Tampa on March 29. The one-day program will include information on patents and licensing, financing, marketing, sourcing manufacturers and other topics. For information or to register, call 813/554-2341.
Small Biz and Congress
When it lobbies Congress this year, the National Federation of Independent Business (NFIB) will focus on tort reform, simplifying and lowering taxes, making healthcare more accessible and easing the federal regulatory burden. The NFIB Small Business Growth Agenda, announced after President Clinton's State of the Union, opposes increasing the minimum wage or expanding the Family and Medical Leave Act. It also calls for repeal of the estate tax, or "death tax," and reform of workplace safety rules. For the complete agenda, check NFIB's Web site (www.nfibonline.com).