Though their profession isn't always the most popular, business attorneys offer a range of critical services for small business


By Morin Bishop


There are a host of reasons why small business owners might be averse to consulting an attorney. First, of course, there is the sometimes negative view the American public holds of the legal profession in general. Fairly or not, many Americans just don't trust lawyers. Second, there is the natural tendency of independent-minded entrepreneurs to want to go it alone, to figure out how to get things done themselves, and to reject the very notion that one needs to rely on a class of experts to manage one's business. Finally, there is quite simply the fact that lawyers cost money, sometimes a great deal of it, and for many small business owners faced with the ongoing challenge of meeting payroll and covering all their other basic business expenses, spending much needed capital on a lawyer might seem unnecessary, if not downright wasteful.


All of these attitudes are entirely understandable, but in many instances they are also downright wrong. If you're not consulting a lawyer in connection with the four fundamental areas discussed below, you are courting disaster:


Starting your business


Though you may have studied the intricacies of the various corporate structures (C-Corp, S-Corp, limited liability, partnership, etc.) available to you as a budding business owner, it is highly unlikely that you understand them as well as a trained attorney, nor is it likely that you are entirely familiar with all the local, state, and federal regulations that may be relevant in your situation. Do you really understand all the tax implications of your preferred structure? And, even if you do, are you sure you understand specifically how to go about instituting it? Finally, although you may be confident on all these points, doesn't it still make sense to consult with a lawyer just to be sure of your answers? Of course it does-and the funds expended for such certainty represent a drop in the bucket when compared to the dollars you might be forced to spend if you choose the wrong corporate structure or fail to follow the proper rules in setting it up.


Signing on the dotted line


Your signature on a document of any kind can be a very serious matter. The longer that you are in business, the more you will begin to feel that you have in many ways signed your very life away. No one would suggest that you consult an attorney every time you sign a legally biding document, but it does make sense for you to get a lawyer's opinion on any significant contract you enter into, particularly one that involves any significant exchange of capital. In some instances, in consultation with a trusted attorney, you may be able to devise language that can become boilerplate for you and your company, and hence be flexible enough for use in multiple contracts. But anytime you depart significantly from the boilerplate, or engage in an agreement of an entirely different nature with a supplier, customer, or partnering firm, make sure you run it by your lawyer again. The person or entity with which you are entering the contract probably has consulted a lawyer, who is undoubtedly attempting to fashion the agreement in his or her best interests. Doesn't it make sense for you to do the same? It is far better to have your attorney involved at the front end, rather than discover later on that there is language in the contract you failed to properly understand or account for that now is causing you undue hardship. Finally, should a dispute arise over the terms of a contract, an attorney is absolutely essential to the process of negotiating an acceptable settlement. Avoid litigation and you'll save yourself a bundle of money.


People Problems


We live in exceptionally litigious times and few areas have spawned more lawsuits than that of employer-employee relations. It is also an area in which the law is in a state of near-constant flux, with new rulings being issued almost daily that alter the landscape and influence the range of acceptable conduct. Do you feel confident that you understand which questions you can and cannot ask when conducting a job interview? Do you know the best ways to protect yourself from a discrimination or wrongful termination action in the event you choose to fire an employee? Are you fully conversant with what constitutes sexual harassment in the workplace these days? In all of these areas, a lawyer's expertise is invaluable and can save you considerable headache, not to mention substantial expense. (A lawyer can also assist in the formation of an Employee Handbook, which may be a somewhat ambitious undertaking for many small businesses, but which can nonetheless offer substantial protection from many of the issues discussed above.) When in doubt at all about a firing, a hiring, or an episode in the workplace, call the lawyer. You'll be glad you did.


Final Stages


One situation in which most business owners are wise enough to hire an attorney is when they are considering a sale of their business, a closing of their business, or the passing on of their business to a family member or other successor. For a whole host of reasons, it is critical that every component of such a transaction is handled in such a way as to protect you and your assets in your exit as well as your successors or new owners in their entry. Any uncertainties or legally gray areas in the transaction are invitations to trouble, and oftentimes very serious trouble, in the future. When you leave your business, you want to do so with absolute peace of mind. Hiring a lawyer to shepherd you through the process is perhaps the single most important step you can take to bring about that most desirable outcome.


None of the above should be read as suggesting that there are not indeed unscrupulous, unethical, and incompetent attorneys, just as there are similar bad apples in the barrel of every profession. For that reason you should be most careful in how you select a lawyer to consult. Talk to fellow business owners, particularly ones facing similar challenges to your own, and ask for recommendations. Be sure that the attorney you choose has experience in dealing with small business and with the issues for which you are seeking his or her expertise. One size may not fit all, as one attorney may be more experienced and adept in dealing with contractual issues or with deals involving the sale of a business, while another may be far more experienced in dealing with employment and HR matters. Finally, be sure you have the kind of comfort level with your attorney that enables you to be absolutely frank in asking whatever questions are of greatest concern to you. A lawyer with whom you can establish that kind of a rapport is truly worth his weight in gold.


"Used properly, a business attorney is a cost-saving tool for your company," says F. Douglas Mileski, an attorney at Guran Lucow Miller PC, a Detroit-based law firm. "A business attorney answers questions specific to your business and lets you sleep better at night and stay focused on growing your business by day. As the old saying goes, an ounce of prevention is worth a pound of cure, and legal services are no exception. The cost of fixing a problem can far exceed the up-front costs of preventing the problem."


So go out and hug a lawyer today. You may discover that you've found the trusted confidant you've always needed.


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