Many small businesses pay too little attention to the legal side of
their business, but that can be a big mistake. One wrong move or
oversight can put you at risk, jeopardize your company and cast a pall
over things for a long time. So our small business legal advice: when starting a business, hire an attorney .
It
may not be apparent, but there are many ways a lawyer can add value to
your new business, from keeping you on the legal straight and narrow to
providing broader, strategic business advice.
Follow these guidelines, keeping your vision in mind, and you will be ready when it comes to decide on hiring an attorney for your new business.
Does your small business need an attorney?
The
best attorneys prevent problems, help you make key foundational
decisions about the structure and organization of your business, and
help you make strategic moves and deals that are crucial for your
success. If you have lingering questions about the particulars of
company structure or are starting a business that you hope will quickly
become a large-scale enterprise, you probably should have an attorney
guiding you through the startup process. Attorneys understand the legal
implications of every kind of new business. They can help you select an
appropriate structure and can help you cope with nuances in legal forms
and the law that you might overlook. Just imagine finding out a year
down the road that you’ve caused yourself grief by omitting some key
legal clause or caging yourself into a suboptimal business structure –
a sobering thought.
Understand the specific legal needs of your business
Another
factor that should help you decide whether you require the services of
a lawyer is the nature of your business, products and services.
For
example, if you’re starting a business based on some new, high-tech
product that you’ve developed, you better have a patent attorney
working with you every step of the way. If you’re trying to get your
brand trademarked, an attorney specializing in publishing and marketing
would be invaluable.
Some kinds of small businesses may
be deceiving in this regard. If you have a scarf with a cool design
that you want to manufacture and sell in stores, you need to look past
the scarf-making and marketing alone. Make sure that your designs are
legally protected, or soon you may see them everywhere. You want to
make sure that your intellectual property is rip-off-proof.
Find a great attorney for your new business
The
best way to find a reliable and trustworthy attorney is through word of
mouth. Whether your friends know someone, or your accountant, insurance
agent or business partners recommend someone, referral is the best way
to go.
Interview a handful of prospective lawyers and
make sure you feel comfortable putting your dream in their hands. Small
business owners should insist that their attorney has some business
experience. Have a list of questions ready and don’t settle. When
you’re interviewing, ask them about their fees and billing plans.
Make sure they understand what kind of business you want,
and that they have your best interests in mind. “The savvier you are
going in, the easier it is going through the maze,” says Misty Gruber,
an attorney with the Detroit law firm, Dykema Gossett, where attorneys
have been counseling startups for almost thirty years.
Demand a lot from your attorney
This
is one of those business partnerships where you can anticipate high
value-added. In fact, you should reasonably expect your relationship
with a good lawyer to deepen and broaden into one of the two or three
most important partnerships that you have as an entrepreneur and
business owner.
Beyond the legal checklist, attorneys
can help you see the broader picture, given their training and
experience. A good attorney can provide a whole new spectrum of ideas,
contacts and specialists to help you grow your business.
Look
for an attorney who’s a deal maker, capable of being an “upside”
thinker rather than one who’s only focused on the downside risk. “The
worst thing is a lawyer who says, ‘You can’t do that.’ Rather, they
should say, ‘You can’t do that that way,’” says Richard Mandel,
associate professor of law at Babson College in Babson Park, Mass., and
partner in a local law firm that specializes in business issues of
small, growing companies.
Expect to pay them what they’re worth
An
attorney’s startup fees will vary depending on the business, size and
geographic location, the experience of the attorney, the details of
their service, and your financial situation. Some attorneys may be
willing to do the first consultation for no charge, but expect to pay
as much as $200 to $300 per billable hour once the meter is running.
Some cases may be worked out on a project-fee basis.
Our Bottom Line
Attorneys can be a great source of advice and partnership when you’re
starting a business or navigating legal landmines. But make sure you
feel comfortable with one, trust him and can afford his services before
you put your company’s future in his hands.
Kaitlyn Buss is a freelance writer for StartupNation .
