Choosing the Right Lawyer When Opening Your Small Business

You are opening your small business and, though you have a product or service that you know will sell, you do not have any experience with the applicable local, state, and federal ordinances, regulations, and laws. You don’t know anything about employing people, which is highly-regulated. You don’t know what sorts of insurance you are required to have to operate, and the sorts of insurance you should get based upon the type of business you have.

You could research all of this yourself, but why? You are busy running your business and to take on that project yourself would take time away from that. It is penny-wise but pound-foolish.

Hiring a legal professional is the most efficient use of time and resources when you are planning to start a small business. But which legal professional?

Why Hire a Lawyer for Your Business

There are attorneys who specialize in servicing the needs of small businesses. Relying on their expertise allows a business owner to focus on running the business, get up and running more quickly, and operate according to applicable rules.

The money invested in hiring a lawyer is, of course, a deductible business expense.

What Can a Lawyer Do for My Small Business

An experienced business law attorney can:

● Help you organize your business as the most appropriate business entity;
● Apply for any permits or licenses required;
● Advice as to what types of insurance you must and should have, and how much you should purchase;
● Assist you in drafting an employee handbook that complies with federal and state law;
● Assist you in setting up the appropriate payment system with the necessary deductions;
● Advise you as to any HR considerations that you might not think of otherwise;
● Ensure you are operating according to all applicable rules governing your type of business and the service or product you offer.
● Advise you of the steps you must take if you intend to operate or sell your product internationally.

What Happens if I Don’t Hire an Attorney to Help Me with My Small Business?

In short, you risk losing money, running afoul of the law, or incurring fines, fees, or penalties if you don’t consult a business law attorney at the start.

Here’s how:

● You may not know enough to form your business as the most advantageous type of business entity for your particular situation;
● You may start business operations before you fully understand and can comply with any applicable rules;
● You may not have the types of insurance you need to operate and hire employees;
● You may violate aspects of HR and employees’ rights without intending to;
● You may make mistakes about how much and what to withhold from an employee’s paycheck.

Which Business Law Attorney is Right for Me?

When shopping for an attorney to help with various aspects of business operations, a business owner should shop around. An owner’s primary consideration should be the experience the attorney has had with that particular type of business concern. Owners should interview the attorney and ask, how many businesses like this one has he or she worked with? Can he or she provide references from their business clients?

If you’ve found someone who has the appropriate level of expertise in your field, you should consider the following:

  • Will the lawyer charge by the hour or a flat fee for business services?
  • This can work both ways. If you have a fairly simple small business that is organized as a sole proprietorship or single-member LLC, you may want to ask to be charged an hourly rate rather than a flat fee for a bundle of business services. If your business is more complex, like a partnership, multi-member LLC, or corporation, you might find that a flat fee is more advantageous for you.

    Aspects of your business that will add complexity and therefore cost to whatever legal services you need are:

    ● Your type of business entity;
    ● What state(s) you plan to operate or sell in;
    ● Whether you intend to operate or sell internationally;
    ● Whether your service or product is highly-regulated;
    ● Whether you have multiple owners;
    ● Whether you have employees;
    ● Whether your business requires a physical space.

  • Does the Lawyer Require a Retainer?
  • Many business attorneys anticipate that they will form a long-lasting relationship with their business owner clients. For this reason, they will require a deposit from you called a “retainer,” which are funds held in trust against which the lawyer bills services as they are provided.

    The amount of retainer your attorney will require will vary greatly depending upon your business’ ongoing legal needs, but generally, businesses that require representation and advice on a regular basis will have an attorney on retainer that can be called upon at any time. Such retainers will be replenishable according to the conditions set forth in the retainer agreement that someone signs on behalf of the business.

  • Is the Lawyer Local?
  • First, a local attorney will be well-versed in the local ordinances and other rules and will be able to advise you accordingly. Second, if your business runs afoul of the law, your attorney will be able to appear on your behalf in your jurisdiction.

Who Does the Lawyer Represent?

In a case of a sole proprietorship or a single-member LLC, the attorney represents the business but the business and the owner are one and the same legal entity.

In any other type of business organization, the lawyer represents the business, and if there are legal disputes among owners, between shareholders and the board, between owners and employees, or between employees, this must be kept in mind.

A business owner may think of the business’ attorney as his or her attorney because the owner’s interests align with the best interests of the business and they have a close working relationship. But the minute the owner’s interests are not in the best interests of the business, in many cases, the attorney will represent the business against the owner in a dispute.

Any potential for such conflicts should be discussed with your business lawyer at the beginning to avoid misunderstandings in the future.

Your business attorney can help you avoid the trouble of all sorts if you consult with him or her at the start. Hiring a lawyer for your business leaves you free to concentrate on operating your business, and feel confident that you have expert help to rely on should a problem arise.

About the Contributor
Kelsey Simpson enjoys writing about things that can help others. She works as a freelance writer for Comfort Keepers. She lives in South Jersey and is the proud companion to two German Shepherds and spends her free time volunteering in dog shelters.

Kelsey Simpson enjoys writing about things that can help others. She lives in South Jersey and is the proud companion to two German Shepherds and spends her free time volunteering in dog shelters.

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