Small and start-up businesses may view retaining an attorney as an unnecessary expense, and one they cannot afford. The cost of having an experienced business lawyer on board early, however, will outweigh the costs that may result if business issues are not handled properly. A business attorney should be viewed as a potentially cost-cutting resource for your company, allowing you stay focused on growing your business.
Examples of matters where business attorneys may be useful are myriad. For instance, a business attorney can help ensure compliance with company or corporate formalities such as drafting resolutions, minutes, etc. A business attorney can help prepare and review business documents and contracts. A business attorney can help prepare employment agreements and employee policies/handbooks, protecting you from lawsuits down the road. Although the marketplace is flooded with “self-help” legal guides and pre-printed forms, and these guides may be useful to you for purposes of gaining a general background, you should not rely on these materials exclusively, as the law can be complicated, and mistakes can be costly.
Additionally, business attorneys may provide other services that benefit your company over the length of the company’s existence, tailored to the exact needs of the business. For instance, a business attorney can amend or replace shareholder agreements or operating agreements and purchase agreements. A business attorney can negotiate on your behalf for the sale of your company or the acquisition of another company or its assets. A business attorney can negotiate financial arrangements and a business attorney can help you plot a course through the terrain of obtaining the various state and federal licenses your business will need.
Lastly, a business lawyer can provide counsel to your business in times of crisis such as when an employee or former employee threatens to sue your business. Or less drastically, a business lawyer can assist in the orderly dissolution and winding up of your business, the withdrawal of a partner or member of your business, or the sale of an interest in your business by you or one of your partners or other members in the business.
Typically, the business lawyer represents the company and not individual owners. The attorney hired for the business has the business as its client and protects the business’ interests. Each owner may have his or her own interest in mind, which may be adverse to the company; an example would be a “business divorce,” where the business lawyer has the business’ best interest in mind, which interest is adverse to the departing business owner or owners. Business owners should be represented by their own attorney to avoid conflicts of interest, or alternatively, the business lawyer needs to advise the owners of the conflict of interest, and they have to waive that conflict in writing.
In short, don’t wait until things go wrong to work with a business attorney. A business attorney should be viewed as a valuable part of your team from day one, and a contributor for the benefit and growth of your business; a necessity, not an afterthought.
— Written by Joseph K. Koury, Esquire