6 Things Attorneys Think New Business Owners Should Know

Wed, Sep 30, 2015

Financial Advice

Hiring anyone onto the team you’ve built for yourself as an entrepreneur is daunting.  Can you trust them? Do they have what it takes to help your business succeed?  Will they be as committed to your goals as the team that’s been with since Day 1?

The process can be even more stressful and challenging when the potential hire is an attorney for the company.  The costs associated with legal services along with some business owners’ lack of legal knowledge often results in no action at all, leaving new businesses vulnerable to all sorts of threats.

Before you make a decision about whether or not your business needs an attorney, take a little free advice that may help guide your choice.

    • Look for the Right Fit

Just as when you hire for any position, it is crucial that you get the right fit in a lawyer.  This has a two-pronged meaning. The attorney you hire should be one that has a specialization in commercial law and extensive experience working with small businesses like yours.

Furthermore, it’s also important to make sure that you actually like and trust the person you hire.  Work with an attorney who always takes the time to explain legal matters to you without making you feel condescended to or pushed into making a decision you’re uncomfortable with.  Most attorneys offer free consultations, which are great opportunities for you to essentially interview them for the job.

  1.   Even Startups Need a Lawyer

There are three main groups that every startup needs to think about from a legal perspective: government, public and associates

First, new companies need to ensure that they’re adhering to relevant regulations and tax laws and not unintentionally breaking any laws while conducting business, which is a common issue for companies that don’t hire an attorney.

Then there is the public, or the customers who buy your company’s products or services.  No matter what it is your business does, there is always the chance of running into legal trouble with unhappy or dishonest customers, but an attorney can help you to mitigate those risks.

Finally, companies are never built alone. You may have co-founders and investors and others who have been involved in the startup process.  At the start, many business owners work mainly with people they know and it’s hard for them to imagine legal problems arising with friends or family members, but they can and often do.  Your attorney will make sure that all contracts and agreements are set up in a way that protects your interests now and in the future.

  1. A Leg Up for Starting Up

The more organized and by-the-book you are in setting up your business from the start, the better your chances for long-term success.  Seemingly small mistakes you make while setting up your business as a legal and commercial entity could have damaging consequences later on.  You need a lawyer at this stage to help you get the paperwork done right and also to get your business registered in the most appropriate structure.

  1. Invaluable Advice

The real value of a lawyer isn’t in getting the paperwork done; it’s in the support offered at the planning stages. A good attorney won’t just be a paper pusher, but a valuable adviser as you decide which structure will work best and how to organize the contracts so that they protect you from the risks you face as an entrepreneur.

  1.  Focus on the Essentials

It’s understandable that many new businesses don’t have much of a budget for an attorney, but you should consider a few legal services to be as essential as your utility bills or employee salaries. Work with a lawyer to get the most important things done right at the start and, if all goes well, you’ll have the resources to get better legal support in the future.

  1. Beware of Red Flags

Understand that it will be hard for a lawyer to represent you if they don’t speak the language of your world. If they simply don’t get the industry, they may struggle to provide the service you deserve. Also, stay away from lawyers who may be learning on your dime. If they seem like they are getting into something they don’t fully understand, that could be a red flag. Lastly, avoid lawyers who surprise you with the bill at the end. Hidden fees and extra costs are simply unacceptable and it is bad business. Stay away.

Considering everything before you take the plunge and start a business is more likely to lead to your success. Getting the right set of people on board in the initial stages is crucial, and an efficient lawyer should be considered an essential part of your startup team.

 

About the Author:  Andrew May is a commercial and financial attorney who specializes in startup businesses and FINRA arbitration.  He is the founding member of May Law in Chicago and also an avid blogger who enjoys sharing his advice and expertise on a variety of business sites.  Click here to see more.

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