I'm a New or Small Business - Why Do I Need a Lawyer?

When I started my legal career, I learned very quickly that most people think you only need a lawyer when you run into trouble or that all lawyers go to court and argue cases.

The looks I would get when I would say, “I’m a corporate lawyer that advises businesses,” were looks of pure confusion. It did not occur to most people that lawyers could be useful in other areas like helping businesses navigate the many issues they face daily.

As a new or small business owner, I imagine you are saying to yourself, “Lawyers are expensive, and I don’t have the extra capital to spend on legal fees while I’m getting the business up and running.” Or, you might be saying, “I’ll hire an attorney when a serious legal issue arises.”  While both of those statements are understandable, consulting with an attorney early in the process is one of the most important things a new or small business can do to set the business up for success and avoid or mitigate potential future problems. Legal costs are a cost of doing business that often saves businesses money in the long run.

While you don’t need your attorney for everything involved in running your business, it is important to know when to contact a business attorney.

New Business

If you are a startup business, a good business attorney can walk you through the basics of how to set up your company.  As a business owner, you are focused on the “Xs and Os” of running your business. You are focused on creating your business plan, securing start-up costs, and other business-related matters that don’t require legal consultation.  And all of that is stressful and time-consuming. So, while you are focused on those issues, you don’t have the time to be bogged down in the minutia of some of the fine print of the law. You need someone to “block and tackle” for you when it comes to legal issues. You need a business lawyer that will help relieve some of the stress you’re under as a business owner by handling matters that fall within the business lawyer’s expertise.

What are some of those areas, you might ask? They include:

Business Structure

Setting up your business is more than just filing Articles of Organization or Articles of Incorporation with the relevant state regulatory entity.  It involves an analysis of the best organizational structure that will reduce or limit owner liability for the business and creating basic corporate governance documents like the operating agreement or bylaws. Not putting in the time to set up the right business process on the front end could lead to unforeseen consequences down the road.

Intellectual Property

One of the most important assets a company can have is its intellectual property which includes developed written content (copyright), a new invention (patent), or the next market-shattering brand (trademark).  Your IP can give your business an advantage over your competitors. Therefore, you should engage a lawyer with expertise in the area you need because it is the best way to ensure your business’s intellectual property is appropriately protected.

While protecting your business’s copyrights, patents, and trademarks is extremely important, there are times when a business has intellectual property that is not protectable. Under those circumstances, intellectual property is best protected by terms of use that govern the way your customers use your product or services. In addition, businesses should have agreements with their employees and/or independent contractors that will protect their “unprotectable” intellectual property or agreements that govern what happens if an employee and/or independent contractor creates intellectual property while working for the business.

Contracts

At some point, every business will enter a contract on behalf of the business. This is also where a skilled business attorney comes in. You need an attorney that can understand your business and represent the interests of the business in contract negotiations.  A business attorney can prepare standard form agreements for your business to use with its customers and help you review and revise agreements that other people or organizations want you to sign.

Many small business owners remember the day they signed their first contract with a customer or vendor fondly.  This is an incredibly important step towards the success of any business.  In order to make sure that this remains a fond memory, however, small business owners should make sure that they have all their contracts drafted, or at the very least reviewed, by a business attorney who’s experienced in these matters.  Every term and condition matters, and every detail needs a thorough analysis before any contract is signed.

Employee Relations

The heart of a business is the people that work for the business, which is why hiring decisions are so important.  A business attorney can make sure that if you decide to enter employment contracts with your employees, those contracts comply with the law. There are other policies and procedures to consider, especially if you operate a remote workforce. Your business attorney can help you consider the legal ramifications of working with remote employees and help you put into place the policies and procedures that will ensure your business is protected.

Risk Mitigation

Risks are inherent in every business. An experienced business attorney can help you mitigate the various legal risks involved in contractual relationships, hiring and firing employees, compliance with local, state, and federal laws and regulations, and numerous other areas of risk depending upon the industry.

Experienced Small Business

As mentioned, consulting with a business lawyer early can help make sure that new business owners don’t overlook certain details or minimize their importance. But experienced business owners need ongoing legal counsel as well because the longer you are in business, the higher the likelihood that your business will be involved in a dispute of one type or another.  You could have a contractual issue with a vendor, or a lawsuit could be filed against the business. If you have an established relationship with a business attorney, then when a dispute arises, you have someone that knows your business that you can call and will be ready to defend your company. Experienced businesses need an attorney that will not hesitate to advocate for the business and help the business resolve issues before they turn into a larger problem. Examples of when an experienced business might need an attorney:

Breach of Contract

The longer a business is in business, the higher the possibility of a contract dispute arising. A business attorney can help you enter negotiations that may resolve the dispute before any suit was filed.

Fraud and Embezzlement

No business wants to imagine their employees committing crimes against the business, but it happens, and to pretend it can’t happen would be detrimental to your business. You can’t watch your employees all day, every day. In the event that an employee commits fraud or embezzles from the company, you will need an attorney that can represent your business if you choose to file suit against the offending employee.

Sale of the Business/Purchase of Another Business

There may come a day when you decide it is time to sell the business, or you may want to acquire or merge with another company, and your business attorney can help you with all those things.

When you’re a new business, or a small business focused on growth, hiring an attorney is probably your last consideration because you think they are too expensive, don’t understand your business, or will slow down the growth of your business. Attorneys are often perceived as impediments, but if you have the right business attorney, they will be your partner and help you grow.