Hi Brandeis, I am both an attorney who provides legal services for small businesses, as well as a business consultant who provides part-time management for small technology companies (COO, biz dev, sales, etc.), so I am familiar with both sides of the equation.
As far as an attorney, look for someone who knows small businesses, and especially the technology industry. I would not pay a retainer, which is a fixed fee for up to x hours per month, because as someone else suggested, chances are you won't need a lot of legal work in the beginning. What you will likely pay, however, is an advance on fees. So, e.g., you might pay $2,500 up front, which will be held in trust and applied to your invoices as incurred. If there is a balance left at the end of the engagement it would be refunded to you.
You should also be able to get an LLC formed for a fixed fee - e.g. I do a single-member LLC for a flat $850 and multi-member for $1,500.
Regarding the corporate form, an LLC is a great choice in the beginning. It is easier to form and easier to manage than a corporation, and it still gives you the protection from personal liability. If the day comes when you are taking on investors and need to be able to issue stock, it is quite easy to convert the LLC to a corporation.
I run a shop, coVenturr, where we house legal counsel as well as business strategy, marketing and social media, and full suite business counseling. I encourage you to check us out and I'd be glad to talk through options with you. In terms of fee structure, usually I offer the client either a flat rate or an hourly billable to be withdrawn from a retainer. Advantage of flat rate is that you can use as much counsel as you need, advantage of the retainer is less cash up front. You might consider including some equity as part of your compensation, as many start up lawyers (including us) tend to invest in our clients literally.
Feel free to reach out directly. Mbaer [at] coventurr.com. good luck!
I have my own law firm and I work with many companies similar in size to yours. I have the flexibility to enter into either type of arrangement with my clients depending upon their actual needs. I would be happy to discuss with you at your convenience.