What Type of Attorney Is Needed When Starting Up a Nonprofit Organization?

By Brette Sember, J.D.

What Type of Attorney Is Needed When Starting Up a Nonprofit Organization?

By Brette Sember, J.D.

When you're starting a nonprofit organization, there are a variety of legal hurdles and requirements to deal with to make sure you set up your organization correctly.

Many people successfullystart nonprofits without the assistance of an attorney. But if you want legal assistance navigating the process, you'll want to find a corporate attorney who focuses their practice on nonprofit organizations and has experience in this realm. A business attorney who represents corporations and LLCs—as opposed to nonprofits—will probably not have the relevant experience you need.

Businessman writing on document across table from person in suit

What a Nonprofit Attorney Does

Your nonprofit attorney will handle all of the following for your organization when you get started as a nonprofit and as you continue your mission:

  • Nonprofit corporation formation papers
  • Tax-exempt status filing with the IRS
  • Creating a business plan
  • Advice about forming your board of directors
  • Forms and documents needed to maintain your nonprofit status
  • Providing guidance for nonprofit regulations and compliance issues, as well as record-keeping
  • Preparing tax-exempt documentation
  • Contract review
  • Guidance about charitable solicitations
  • Information about employment laws and policies you need to create
  • Unrelated business income tax
  • Filing annual returns with the IRS

Where to Find a Nonprofit Attorney

Referrals are the best way to find a qualified nonprofit attorney who can represent your organization. Look into the following for possible referrals:

  • Your state nonprofit association
  • Your state or local bar association
  • Attorneys you have used for other matters
  • Other nonprofits you are familiar with
  • A local law school might have a clinic that can provide free or low-cost representation

Where Not to Look for Representation

If your organization's board is going to have an attorney on it, you may think it would be a no-brainer to hire them to represent the nonprofit as it is being set up. This would be a mistake.

If an attorney sits on your board, they have a conflict of interest. The lawyer for your nonprofit represents the entity itself, not the individual board members or staff. An attorney on the board cannot represent your nonprofit without considering their own interest and role as a board member. It would be unethical for an attorney who is a director to represent the nonprofit.

How to Afford a Nonprofit Attorney

If your business is not operating for a profit, you might expect that an attorney would be willing to donate their time to your organization. But that's an unrealistic expectation. Providing legal representation for a nonprofit corporation is complex, detailed, and time-consuming work. You will not get the type of representation you need if you do not pay for legal representation. It's one of the necessary business expenses that you must build into your budget.

You can try to manage your costs by asking the attorney you're considering if they offer a flat fee for the nonprofit setup and certain types of document preparation. You may also be able to negotiate a payment plan for legal services or you can talk about limiting the scope of the representation to keep your costs down. It's important that you negotiate an hourly rate upfront so you can plan your costs.

Choosing a nonprofit attorney is an important decision and one that should be done through careful research and consideration.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.