Professional Development

When entrepreneurs should seek legal counsel for their small business

When-entrepreneurs-should-seek-legal-counsel-for-their-small-business

Few things are as exciting, or as intimidating, as running your own small business. Entrepreneurs starting their own small business or who are already running one have a lot on their plate. The last thing they need to worry about is hiring an attorney. Right?

Not quite. Bringing an attorney on board can benefit your small business. You shouldn’t wait until there’s a problem; instead, consider hiring legal counsel as the cost of doing business. And while it may be true that attorneys cost money, they’re more beneficial to your small business than you may realize and well worth the investment to secure your business future.

Here are a few of the reasons why it’s essential to bring legal counsel into the fold to help your business thrive in the long run:

Why small businesses need a lawyer

People often turn to attorneys when they have a legal question or faced with a lawsuit. When running a small business, seeking legal counsel is a little different.

Lawyers provide legal expertise for a variety of clients, from big to small. As a small business owner, you can use the legal expertise in areas you’re not well-versed. These include things such as:

  • Compliance: Lawyers can help ensure your business is following and operating under all federal, state, and local laws.
  • Risk: As a business you assume risk, but your business attorney can help you establish procedures to help reduce that risk.
  • Liability: No small business wants legal action brought against them, but lawyers can help you prepare in case that does happen. They can define contract language and business terms of service that reduce your liability. They can also advise you in regards to liability insurance.
  • Agreements: Lawyers help you establish formal documents to govern relationships across your organization. In other words, what you owe all employees, partners, vendors, clients, and customers is spelled out in advance.
  • Taxes: Attorneys trained as tax specialists can help ensure you’re paying the right amount of taxes. They can also help identify business deductions and reimbursements to help lower your tax liability.

When small businesses typically use a lawyer

How can a lawyer specifically help your business? Lawyers often assist small businesses with tasks such as:

Choosing the right business entity

Should you be an LLC? A corporation? How about a sole proprietorship or partnership? What do all those terms even mean? A lawyer can help you to understand which option is right for you based on the size and nature of your business. They can also help you to understand the legal pros and cons of each one.

Picking a name for the business

You don’t want to settle on the perfect name for your business only to get a letter in the mail from another business’ lawyer telling you that they already trademarked it. A lawyer can research for you to determine if the name you want is not in use by another business.

Creating contracts

Everything from employment contracts to vendor agreements to terms of service can be handled for you by a lawyer. They can make sure your business agreements are airtight to help protect your business. You may not need a lawyer to accomplish all of these things, but they can help cover all your legal bases and make sure you and your ideas are protected.

Issues that require a lawyer

One of the biggest reasons to establish a relationship with a lawyer is that if you run into legal trouble, then you have a professional you can turn to right away. You do not want to be in the process of being sued before you find a lawyer.

Just take a look at big-box stores such as Walmart and Sam’s Club. They regularly see lawsuits brought against them for slip and fall injuries. If business owners didn’t have proper representation, they’d be in for quite the legal headache. Slip and fall injuries are the leading cause of injury across all age groups, but it’s just one example of why you don’t want to get caught without a lawyer to represent your business.

Aside from injuries, other things may happen to you over the course of running your business that requires legal expertise. These include:

  • Prospective, current, or former employees suing you for discrimination in hiring and firing
  • Federal, state, or local government agencies investigating your business or filing complaints against you
  • Environmental issues arise that your business is a part of, even if you didn’t cause the problem

Another plus to bringing in a lawyer before they’re needed? They can help you to prevent these legal issues from happening in the first place.

How to find a good lawyer

There are several ways to find an attorney that doesn’t involve a billboard on the side of the Interstate.

First, ask around. You may have a friend or family member who knows or has used a good attorney. Just make sure that the attorney is the right type of attorney for your small business.

You can also do an online search. If you take this route, then make sure to find a local attorney with the right specialization. Check out their website and LinkedIn profile, read client reviews, and check with your state’s Bar Association to make sure they’re in good standing.

When you find an attorney that piques your interest, set up an interview. Ask them about their experience to ensure they’ve worked with clients in similar businesses as yours. Also, make sure they understand your goals so they can help you make a plan for your business future.

Finally, ask about billing. They may charge a monthly retainer or an hourly fee. Try to work out a deal that fits in best with your expectations and budget.

In your small business, an attorney is like an insurance policy. Spending the money up front on an attorney may not fit as easily into your business plan as other costs, but what you pay now can save you thousands in litigation in the future. It may even save your business one day.

About the Author:
Jori Hamilton is a writer from the Pacific Northwest who has a particular interest in social justice, politics, education, healthcare, technology, and more. You can follow her on Twitter @ HamiltonJori.

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