When & Why – Every Small Business Needs an Attorney

An attorney is an important professional for every business, no matter how large or small. Attorneys can serve multiple functions: they can act as your preliminary HR Department, a neutral third-party that offers strategic suggestions, and your advocate when your business has been wronged. They also play a vital role in helping prevent small issues from snowballing into major disasters. But if you are just starting your business, you may not know when, or even if, you need an attorney. Here are just five areas where having an attorney for your business is crucial.

Structuring and Forming a Business

Are you forming a partnership? Are you forming a corporation? Are you forging ahead with your business – but alone? If you do not know how you are structuring your business, or if you are struggling to navigate correctly forming your business and registering it with your state, an attorney can help you. Not only will they help you make the best decision based on your priorities, an attorney can advise against making common (and often costly) errors.

At the beginning stages of your business, an attorney can also help navigate legal requirements that are specific to your industry or type of business. They can help you address banking issues (do you need a separate bank account for your business?) or tax questions (are you in compliance with local, state, and federal tax codes for your specific industry?). What if you need insurance for your business? An attorney can help with all of those questions and so much more, which can be such a relief to people who may be overwhelmed by all the ground they need to cover.

Creating, Reviewing, and Negotiating Contracts

Attorneys are vital for creating, reviewing, and negotiating contracts. Contracts can be simple, like an agreement between you and a customer for a payment in exchange for goods or services. Contracts can also be more complex, like agreements between your business and a manufacturer of parts necessary for your product.

If you are creating a contract, an attorney can help identify where terms might be ambiguous or vague – especially in the eyes of the law. After all, if there is a dispute over the contract and the issue goes to a court, the contract will be evaluated from the perspective of the law, which often doesn’t factor in nuances in culture or in personal relationships. An attorney can also help identify where you might be exposing your business to liability and can help mitigate that risk.

If you need to negotiate a contract, an attorney can be useful in playing the role as a mediator. As your business’s advocate, the attorney can also help prevent you from being taken advantage of. Attorneys can also be instrumental in renegotiating contracts when new circumstances arise.

Employer-Employee Relationships

If your business will be comprised of more than just yourself and your business partners, you are going to need an attorney. In a hiring situation, an attorney can help clarify what kinds of questions you can (and more importantly, can’t) ask of a prospective employee. They can also help create employment contracts, confidentiality agreements, and even an employee handbook to establish policies.

An attorney – especially one who specializes in employment or labor law – can also be crucial throughout the employer-employee relationship. Although there are federal labor regulations, those function as a mere baseline or standard. Labor and employment regulations can differ from state to state and it is important that your business, no matter where it is located, is still in compliance with the local regulations. Does your state require pay transparency? What about maternal leave? What can you (legally) ask of your independent contractor? An attorney can help you navigate all of those questions, and so much more.

If you think you may need to fire an employee, an attorney can also help navigate the firing process to minimize the potential for a future lawsuit. They can help create a termination agreement, noncompete agreements, and they can maintain records of employment to minimize the likelihood of a costly lawsuit on the basis of unlawful termination.

Intellectual Property: Trademarks, Copyrights, and Patents

Every small business should trademark its business name, logo, and any special phrases used in their products or services. An attorney can help navigate the U.S. Patent and Trade Office to help determine if a logo or phrase is available to trademark and can file the requisite documents to obtain the rights to that trademark. This is especially important to prevent competitors from taking your name and logo, filing for a trademark first, and then suing you for trademark infringement.

Small businesses who are creating a product of some kind must obtain an attorney for patents. The requirements for filing a patent are fairly complex and making a mistake in this area can be expensive. Not all attorneys are qualified to operate in patent law, so you may need to look for an attorney who specializes in patent law.

Debt Collection

Every small business will inevitably run into an issue where they haven’t received payment for goods or services rendered. It’s unfortunate, and although it is commonly dismissed as merely a cost of doing business, it doesn’t have to be.

An attorney can help a small business collect on debts. Sometimes, all a person needs is a demand letter signed by an attorney – other times, you may need to pursue your financial relief in court. It is overwhelming enough for most people to navigate the complexities of the procedure and rules of a courtroom, let alone finding the time to draft the right documents, file the paperwork correctly, and appearing in court when needed. Instead of taking the burden of unnecessary stress, this is a job that you can (and probably should) relegate to your attorney, who can take the avenues necessary to collect a debt on your behalf. No need to stress – that’s their job!

Are Your Interests Protected?

Who else is looking out for you? An attorney can act as a confidant, advisor, and legal guide all rolled into one. When it comes to your business, their responsibility is to put your (or your business’s) interests first, both for short-term and long-term goals.

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