Startups and entrepreneurs can’t waste time or money if they hope to be successful. They need to find value and exploit it. Usually, they are very good at doing just that. However, I am surprised how often entrepreneurs don’t understand the value of a business lawyer. Perhaps it has something to do with the negative perceptions of lawyers (they are too expensive, they provide too much information and not enough advice, they can’t talk to me in plain English). I get it. But maybe it’s just that no one has ever explained the value of a lawyer. So, here are five reasons your startup needs a good startup attorney:
Sure you understand your business, but there are lots of related issues that you may not have considered. Should you set up as an LLC or a corporation? Why? What are the licensing requirements for your business? How should you handle employees? Or are they independent contractors? What about intellectual property? Do you need protection, and if so, what kind?
Sure, you could try to do the research, talk to other entrepreneurs, and scour the web for advice. Maybe you would get this stuff correct, but would you be sure? Would you know if the information you found was complete or accurate? And even if it were complete, how much of your time would you be willing to devote to finding the answers (instead of building your business)?
Lawyers spend three years in law school training. Many of the best business attorneys also spend years training with large law firms working with large corporate clients. This allows them to quickly and efficiently identify your needs and address them. Tip: For the best value, look for a solo or small practice attorney who previously worked for a large law firm. That way, you get the value of the training at a much better price.
Your startup will have an emergency approximately 3 times a day. There is no getting around that. Even if it’s not an emergency, there will always be questions. Many of those situations will involve potential legal issues. If you don’t talk about them with a lawyer, you are taking on unknown and potentially serious risk for no good reason.
If you have not established a working relationship with your lawyer, you will have to start from square one every time. That might mean that every question is an hour of your time in order to get your lawyer up to speed on your business. On the other hand, if you have a working relationship, the call to your lawyer might only take five minutes of your valuable time. Tip: When interviewing potential lawyers for your business, make sure you look for someone you are comfortable talking with and who is responsive. This will allow you to get fast answers to your questions.
Contracts, laws, and regulations are written in some of the most cumbersome and confusing language. Sometimes this is intentional, but often it is just laziness on the part of the author. Either way, this kind of language can be a trap for you and your business. Misunderstanding a law or regulation could mean a costly investigation and compliance issue down the road. Misunderstanding a contract can result is extremely expensive litigation or even cost you your business.
An experienced business lawyer is trained to be able to understand and decipher this language. Even if you don’t have the bargaining power to change the language, your lawyer should, at least, help you understand your risk. Tip: Look for a business lawyer who can talk to you in plain English and who helps you understand the issues facing your business. Complete understanding is important to your decision-making for your business.
Being able to identify and anticipate potential legal issues before they arise is critical to avoiding costly business mistakes. No business owner can be expected to anticipate all possible legal issues. Fortunately, an experienced business attorney can help with this. If you are working with an attorney before these issues arise and that attorney knows your business, he or she can help you avoid the mistakes. The value of working with a business attorney is avoiding costly mistakes. Sure there is some smaller fees you will pay in the beginning, but this is a great value for your business, especially if you are working with the right attorney. Tip: Pay attention to the business lawyer who identifies potential issues that you have not thought about. Those are the things that may save you the most money in the long run.
If you are in business long enough, you will get into a dispute. An experienced business attorney that is also experienced in commercial litigation will be your best asset. If you have been working with this attorney, you will waste no time wondering what to do, finding an attorney, or getting that attorney up to speed on the dispute and your business. Acting quickly and getting the right legal advice can save you tens of thousands or even hundreds of thousands of dollars.
Even if the dispute involves a topic that your business attorney is not immediately familiar with, or if you need a specialist, your attorney will still be an asset. This is because most lawyers have a vast network of connections among other lawyers practicing in many areas, and a network of other professionals and experts. Your business attorney can also help coordinate the team to make sure your business pursues its interest in the dispute in the most efficient manner. Tip: Look for a business attorney who is also an experienced commercial litigator. Litigation attorneys are usually well versed in many kinds of business disputes and can help you navigate very confusing waters with confidence.
A good business attorney can bring value to your startup in a number of ways. While I understand that the trend is to run as lean as possible, your business should make it a priority to find a good business attorney. It will pay off for you for the life of your business.