I own a small business, and am proud of it. In fact, I “know it all,” and, better yet I “can do it all,” because “Paying professionals a waste of money.” So, why should I need a lawyer when I buy, sell or even operate a business.
Since the bottom line is key, most small business owners I encounter genuinely think that hiring a lawyer is akin to turning on the water faucet, and getting little in return but a hefty water bill. I assure you that such rationale is flawed.
Take for example the client who was operating a thriving New York City diner. The business flourished, because it had a ten (10) year lease with options to renew; or so they thought. Then, the building was sold. Deep in the “standard form” lease agreement signed ten years earlier was the barely legible clause, “Upon sale, the incoming owner may cancel and terminate this Lease on ten (10) day notice,” and that’s what happened.
As an attorney, that is my nightmare, and it happens with alarming frequency. Some friend, business owner, client, or interested person says, “just take a quick look, its one of those forms I found on the internet.” As I take up my pen to fix what’s broken, I should respond by saying, “my, it’s a good thing that the internet went to law school, because this is a humdinger of a contract.” Kidding aside, legal advice and guidance is absolutely vital to any small business, and yes, it costs money, but it can be both valuable and not a financial drain.
When is an attorney best suited to helping you and your business?
1. Startup. Review the potential business structure, legal ramifications and other elements designed to protect you, your business, and your family. An accountant can help ameliorate some of the tax issues that might arise.
2. Check your contracts. As life and a business evolves, relationships, methods of payment, operations, and other needs might change the way your existing contracts operate. That handshake may not cut it when you have a ten thousand dollar account receivable. Get your attorney to review every contract you use in your business, both with customers and suppliers. Without a writing, we cannot sort out the problems.
3. Review your exit strategy. Someday, you might become disabled by Lyme disease, want to retire, or want to turn over the business to your kids, but you have a partner with a different agenda. Worse yet, if your business is failing, how do you identify and protect your assets. Plan ahead for the problems.
4. Check your debt collection. Attorneys can advise you on suitable collection methods. resources, and help your cash flow without overstepping the lines.
5. Plan for the Wealth. Experienced estate attorney can help you transfer some of that to your spouse and other family members, but it takes, time patience, and ingenuity. Thinking about retirement in your forties and earlier can make it attainable.
6. Succeed. Establishing procedures and guidelines to transfer ownership your business takes time and care, you need your attorney to understand the nuances, and no internet form can do that.
7. Resolve a business dispute. Once you reach this reason for hiring a lawyer, you will understand why you should have hired one before– to avoid the problem before you had the dispute. Clearly, no small business should litigate a business dispute without a lawyer and it pays to have something prepared by a lawyer to rely upon.
The Bottom line– Lawyers can help you to avoid some pitfalls in life and in business by planning ahead. They are no different from accountants, pharmacists, financial planners, even secretaries because they fulfill a valuable function for business and society. Experts cost money, so hire the experts– be that a real estate attorney, a bankruptcy attorney, a litigator. Solid legal advice is not dirt cheap, but it need not be prohibitively expensive. So, go ask your lawyer to help you today, and don’t be shy about dickering over price, payment arrangements, and timing. The world is full of creative, flexible, energetic and smart attorneys who can thrive with you.