Navigating legal issues as a small business owner can be tricky, and any missteps could have major consequences. A business attorney could not only help if you’re being sued, but they could try to prevent a lawsuit in the first place.
“Folks need to understand the legal landscape can be complicated,” said Jon Jordan, a business attorney at Robinson Bradshaw in Charlotte, N.C.
Continue reading to learn more about how hiring a small business lawyer could benefit your company and how you can find the right match.
When do you need a small business attorney?
Working with a small business lawyer from the get-go could ensure a smooth start for your business. Attorneys can help you form your business and set up an entity, such as a limited liability company, partnership or corporation. An attorney can help you draft agreements that would help you settle conflicts, such as dissolution or partner disagreements, he said.
Once the business is formed, an attorney could handle legal matters, including filing a lawsuit on your behalf or representing you in a dispute. Attorneys could also assist with internal business matters like employee relations. They could provide guidance for hiring or firing employees to help you avoid a discrimination lawsuit. You could also ask them to review agreements for contract workers or advise you on employment laws and IRS guidelines.
When you consider contracts, a business lawyer could make sure you don’t sign any documents that could put your business at risk. An attorney would suggest adding certain clauses and language to protect you if the other party breaches the contract.
They could also help you map the business’s future. If you plan to sell your business, an attorney could complete a valuation of the company, write acquisition and purchase agreements, and transfer permits and licenses. On the flip side, they could help with an acquisition if you decide to purchase another business.
When you exit the company, an attorney could assist with succession planning. Even if you don’t expect to leave the business for years, they could put a strategy in place to account for unexpected events.
Building a relationship would give you an expert to lean on, Jordan said. As an attorney becomes more familiar with your business, they would be better suited to provide strategic guidance and legal defense.
How to hire a business attorney
When searching for outside legal counsel, take the time to find the right match for your business. Follow these steps to ensure you hire an attorney who can manage your business’s needs.
1. Do background research
Look for a business lawyer with experience in your field, especially if you operate in a highly regulated industry like health care, Jordan said. Some things vary from city to city, like real estate regulations, so you may need to hire an attorney who works in your immediate area, he said.
Review an attorney’s biography and professional experience — information you can likely find online — and consider checking their LinkedIn profile. Look for terms such as business law, corporate law, emerging growth, startups, tax or mergers and acquisitions to get a sense of their experience in the field.
If you hire an attorney to handle a specific issue, you may need to hire another attorney if a different problem surfaces later, Jordan said.
“Every problem you have is not going to necessarily be in the wheelhouse of the attorney,” he said.
2. Set up a meeting
Most attorneys will take an introductory call or meeting at no cost to hear you out, Jordan said. That first meeting would help you and the attorney determine if the relationship would be a good fit, or if you should consider a different lawyer or firm.
“For most attorneys, that’s just part of developing business and meeting people,” Jordan said. “Most of the time, people will have that conversation with you without charging.”
During the preliminary meeting, ask about the attorney’s or firm’s experience working with businesses similar to yours. Consider asking who would handle the bulk of your legal work, whether it would be the attorney themselves or associates, paralegals or interns. It may not be a deciding factor, but it wouldn’t hurt to know who would be dealing with your files.
3. Be prepared to discuss the details of your business
A prospective business attorney would need to gather information about your business before deciding to take you on as a client, so be prepared to share details. An attorney would want to understand your business plan, as well as how the business operates from day to day, Jordan said.
Your short-term and long-term goals would also be important to the attorney, he said, as they could determine how those goals would affect the company’s overall growth. Any concerns you have about the business would be useful to an attorney as well, Jordan said.
“All of that is going to help you get the best advice,” he said.
4. Review billing and fee structures
When considering an attorney, understand how they bill clients and what the expectations would be for making payments. Most attorneys bill by the hour, Jordan said, but other fee structure could be available:
Flat fee: Lawyers may charge a flat fee for simple projects and services. The costs of services required to set up a business entity, such as a corporation or LLC, are often packaged together and priced at a flat fee. Attorneys could also bundle services for projects like starting a new business because they already know what the task would entail.
Retainer fee: An attorney may ask for a monthly retainer fee, which allows you to pay in advance for services you would need throughout the month. You could work with your attorney as needed without getting billed afterward.
The cost of services would depend on a number of factors, and it may be difficult for an attorney to give you an exact price upfront, Jordan said. The number of partners in the business or contract modifications, such as provisions outlining profit allocations among those partners, are things that would impact overall cost, he said. Make sure the attorney understands your expectations.
5. Don’t be afraid to ask questions
Transparency is key to getting the most out of your relationship with a business lawyer. Don’t hesitate to ask for clarity or more information, Jordan said.
“The only way you’re going to get the best advice from the attorney is to ask questions,” he said. “Let them know what your concerns are and what you have been thinking about, and have a conversation about those things.”
Red flags to watch out for when hiring an attorney
Before getting too far into the process of hiring an attorney, there are some signs to watch for that could indicate the attorney in question might not be the right choice.
Lack of responsiveness. When you reach out to an attorney as a prospective new client, you should hear back within a day or so, Jordan said. If they don’t have time to set up a meeting right away, an attorney should at least respond to say they received your call or email, he said.
“If someone is not being responsive to you when you’re a potential new client, then they’re not going to be responsive down the road,” he said.
Not asking you questions. You should have a back-and-forth interaction with a business attorney, especially in the early stages. As you get to know an attorney, they should equally become acquainted with you and your business, Jordan said. If you don’t have that communication and interaction early on, it may be a sign you should consider a different attorney, he said.
Hiring a business lawyer now can save you later
Business owners often hire an attorney when something goes wrong. But working with an attorney from the start can often keep you out of legal trouble, Jordan said.
Many lawyers are open to alternative fee arrangements to make their services more accessible, Jordan said. You may be able to work out a deal that would allow you to make payments in a way that works for your budget.
Although a business lawyer could provide useful guidance, there are instances when you don’t necessarily need to hire legal counsel. For instance, setting up a business doesn’t require a lawyer since you could file your articles of organization yourself to form an LLC. You may be able to consult an online service provider like LegalZoom when filing documents rather than hire an attorney.
However, it could be beneficial to hire a business attorney to handle more significant legal matters. It’s important to be open and honest with the attorney you choose to hire, Jordan said. You should be on the same page regarding the goals for the business and how you can work together to achieve them.
“It’s like most relationships,” he said. “It’s about communication.”
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
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