What small business owners need to know when legal questions arise
Our center was contacted the other day by a potential client asking about hiring a small business attorney. In reality, he didn’t need an attorney, but the inquiry raised a good question. When do you need to engage the services of an attorney for your small business?
In the same way you might not call a doctor to help you get over a routine head cold, you will likely not need an attorney for day-to-day questions. However, if you have a serious legal problem – such as being investigated for fraud or tax evasion, being threatened by a disgruntled employee or protecting intellectual property – it’s probably best to call in some reinforcements.
If you are starting a business, chances are you can handle most legal requirements yourself. You need not pay a lawyer’s hefty hourly fee for things such as:
- Researching and reserving a name for your business
- Filing a fictitious name if you intend to do business under another name
- Reserving a domain name for your company on the Internet
- Creating your own partnership, LLC or shareholder’s agreement
- Applying for your business employer identification number (EIN)
- Applying for business licenses and permits
- Leasing commercial space for your company
- Interviewing and hiring employees
- Completing IRS required paperwork
There are hundreds of sources for the above information, including the Resource Center on our website at www.missouribusiness.net.
You can also find information there on the following topics, which will likely occur after you have been in business for a while.
- Hiring independent contractors and consultants
- Preparing written agreements for contractors
- Creating contracts with customers and clients for sale or rental of goods
- Documenting meetings of partners and employees
- Creating a buy-sell agreement with your business partners
- Updating agreements as business circumstances change
- Handling an IRS audit
If you need to address more complex issues, you may want to seek the counsel of a small business attorney. Some of those more complex issues might include:
- Allocating profits and losses in your partnership or LLC agreement
- Contributing property to a partnership
- Buying a business, particularly one with environmental remediation issues
- Defending yourself or your business against charges of harassment
If you need to address more complex issues, be sure you select a legal advisor with whom you have a good rapport. You want someone who is responsive, willing to listen and also willing to let you handle what you can without expensive legal assistance.
Be sure to check your lawyer’s area of expertise. To get the best use of your dollar, you’ll want to find someone with a business specialty. Review all fees in advance.
Do not confuse a supportive nature with a sound expertise. A good attorney should be able to provide you with both. And do not engage the services of someone who is typically too busy to see you. Discuss up front how much time you will require, and work with an attorney who is willing to commit that time to you.
Be sure to meet in person. It’s tempting to conduct business electronically, but your relationship with your business attorney is one that demands personal interaction to build trust and credibility.
Get referrals. You can find information on nearly every attorney, including his or her background and expertise. Never hire a lawyer without checking the individual’s references. Talking to other clients and to someone who has worked with the attorney is a good practice.
Refuse to be passed around. Make sure your attorney does not hand you off to an intern or recent law school graduate.
And, finally, the best way to ensure a productive relationship with an attorney is to do your part by being prepared for meetings with the necessary information and documentation.
Virginia Wilson is a small business counselor with the Missouri Small Business and Technology Development Center housed within the University Center for Innovation and Entrepreneurship at MU.