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 LineAttorneys 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 .