Most business owners are insanely passionate about what they do and they know their field inside and out. Few entrepreneurs, however, know much about business law. And it doesn’t matter how good you are at designing websites or selling t-shirts or making sushi – if you leave yourself open to legal issues, your whole business could go belly up before you earn your first dollar.
Worse still, you could be on the hook for more even after your business fails.
While you may be starting off by bootstrapping your way to a launch and cutting financial corners wherever you can, you ought to consider spending a bit of your budget on a good business lawyer. It might be a cost you’d rather not incur now, but it will save you a great deal of money and stress in the long run.
- Legit Startup
Starting a legitimate business that does things by the book is not a simple task. There are a plethora of legal questions that immediately arise when you begin: What business structure will you have? How will your employees be classified? Do you need a business bank account and tax ID? How can you protect the name?
If you don’t have a background in business or law, these kinds of questions can quickly overwhelm you. Sure, you could do research on all of them, but it will be quite time-consuming, and you’re likely to make mistakes that hurt you down the line. The choices you make and the actions you take in the early stages of setting up your company have a huge impact on your long-term viability. A specialized business attorney knows exactly what choices you should make in order to set you up for success.
- Keeps You Out of Court
The unfortunate thing about the threat of litigation is that once it’s been made, there’s not much an attorney can do for you, besides help to lessen the blow. Think of a lawsuit like the flu: there’s plenty you can do to avoid getting it but not much that can be done once you’ve got it. Best case scenario? You win the case, but in the process, you lose time, incur legal fees and endure lots of unneeded stress and worry.
In this scenario, your business lawyer is a like a flu shot: it might hurt a little bit when you first get it, but it will prevent much more pain later. An attorney will, first and foremost, ensure that the company is established securely so that a silly mistake doesn’t lead to a lawsuit. They will also continually monitor your dealings with everyone from clients to partners to make sure that everything is done in a way that protects your interests. Starting a business is a risky affair under the best circumstances; the value of having someone who’s sole job is to protect you from legal issues that could threaten your company’s survival cannot be overstated.
- Creates Contracts
If you know any attorneys, you know that one of their favorite fallback phrases is, “Put it in writing.” While you might be prone to accepting verbal contracts from various people you work with when you get started, you should start using contracts as soon as possible. When any part of your operations depends on another human being, there’s room for error. Since it’s impossible to do business in a vacuum, you will end up depending on others – clients, employees, partners, suppliers. Even if you trust these people with your life, you should still put it in writing.
You can certainly find a wide range of boilerplate contracts online, print them off and whip out a pen. Do you even know what the terms mean? But that’s not ideal. It’s pretty difficult to find a pre-made contract that includes all of the stipulations that are important to you. But once a business lawyer creates customized contracts for you, you’ll have them for life…or at least until your business changes enough to necessitate new ones. You pay for the contract once and use it as many times as you like. Having customized contracts that spell out every agreement and contingency for every individual or group that you deal will let you sleep easy at night.
- Handles Real Estate
Whatever your field is, you will almost certainly outgrow your home office at some point. And when that happens, you’re going to enter the complex world of business leases. You’d probably assume that you know the drill from having rented numerous apartments. You’d be wrong. Renting a commercial space is a whole other can of worms.
Your attorney can guide you through this process and make sure that you end up with a price and a rental agreement that benefits you instead of the landlord. Chances are that your attorney can also negotiate better terms and save you additional money. You’d better believe that owners of commercial spaces will present leases that give them the most possible control over what you do, so you’ll need someone who knows which red flags to look for and how to get them taken out of an otherwise attractive lease.
- Protects Intellectual Property
So your company might not be inventing a new, revolutionary technology, but you will have intellectual property that you want to protect, particularly your name. When you start out, your company’s name has little to no pull. But as you grow and become more recognizable, that name is everything. If it’s not protected properly, other companies can capitalize off of your success by using a frighteningly similar moniker.
On the other side of the same coin, you want to make sure that you avoid setting up your business under a name that has already been taken. The last thing you’d want is to have to change the company’s name after you’ve already gotten it printed on a sign and gained a bit of brand recognition. This is also known as the dreaded “cease and desist” letter. A business lawyer can make sure that the name you land on is one that you can legally use, and that no one else will use it after you.
Let’s be honest – starting a business is like jumping off a cliff without knowing whether what awaits you at the bottom is a cushy net or a bunch of jagged rocks. You know that already, and you jump anyway – that’s what makes you an entrepreneur.
Having an experienced, trustworthy business attorney in your corner may not guarantee your company’s wild success, but it will ensure that unexpected legal complications don’t block the path that leads to wild success.
By Andrew May, owner and president of May Law, PC, is a Chicago FINRA attorney specializing in financial services, commodities, futures, foreign exchange, options and securities law. With over 18 years of experience, Andrew has represented clients ranging from individuals and small business to Fortune 500 firms. For more information, visit May Law, PC or find him on Google+.