Tips for Hiring Your Startup AttorneyBy Andrew Longcore on April 25th, 2013 /
You have made the big leap and started your own business. Congratulations! This is a very exciting time. So you need to develop a business plan, do some branding, get a website, come up with a marketing plan, develop products and services, maybe hire an employee or two, find a location, come up with a budget, choose a name, find customers or clients, determine pricing, and so much more. There is one thing that doesn’t make a lot of startups’ to do lists: hire an attorney.
It used to be that Business 101 was when you start a business you hire a banker, an accountant and a lawyer. With technology advances many new business owners have taken on the “do it themselves” approach in order to cut costs. While there may be some things that you can get away with this approach on, the ramifications for not doing it right can cost your business a lot of money.
Your business might be selling clothes, making pizzas, building grills, or helping business to be more efficient but a business attorney’s job is to protect your business. Business lawyers can navigate complex situations such as determining how your business should be incorporated or organized, settling disputes, hiring employees, protecting your interests, and a host of other issues.
Common Startup Legal Mistakes
1. Mistakes on important documents. I have seen business owners that have made little mistakes that have left their business vulnerable. A simple mistake on your articles of organization to form your LLC can leave you open to personal liability. I had a client that when they formed their company limited the businesses purpose. This made it so technically all sales they made would not be made by the business because it did not fall under the business’ limited purpose. A simple mistake made it so the individual owners might have been personally liable if a dispute over a sale arose. Luckily the mistake was caught early and corrected.
2. Improper documents online. One of the most common mistakes made by new businesses is the use of a contract they found on the internet. These business owners know the importance of contracts but they rely on a contract that was drafted for a different business and likely under different laws then the state their business is operating in. On top of the contract not fitting what the business needs, the contract does not likely take all the steps available to protect the business’ interests. This can mean that your business might not get paid for its services, might be liable for extra work or unknown warranties, or be in a weaker position if a dispute arises. A business attorney can make sure your contracts are a perfect fit for your business.
3. Not hiring a business lawyer. New business owners are often reluctant to contact a business lawyer because of the perceived cost or they might feel intimidated. If you put the time in finding the right person or firm to represent your business, you can get quality representation from an attorney you get along with at a fair price. Most of the work that an attorney does for your startup will actually make you money.
Think of this for a second: if your business executes a number of contracts totaling $50,000, how much would you be willing to pay to ensure your business is paid the full $50,000? I would bet the amount you are willing to pay to ensure payment is more than it will cost to ensure you are using a contract that fits your startups business.
Tips for Hiring The Right Attorney
The legal world has gone through a bit of a revolution over the past decade. Lawyers have started to become much more specialized in their practices. General practice attorneys have been replaced by lawyers that have practices that focus on just business, just estate planning, just family law or just criminal law. Some attorneys have become even more specialized. Your startup needs to hire a lawyer, but you also need the right one.
When hiring a business lawyer, remember you are hiring them. Don’t be afraid to ask around for referrals and don’t be afraid to vet multiple attorneys. Ask lots of questions and get to know your potential attorney. There are some lawyers out there that might not be willing to be interviewed by you but most attorneys will be more than willing to sit down and let you know who they are and what they can do for your business.
Your startup is important to you and it should important to your attorney. You should be comfortable with the attorney you choose and have confidence that your business attorney can protect your business and help it succeed. Or you can “do it yourself” and gamble that everything goes perfectly. How much is the future of your startup or your dream worth to you?
Photo via: Silver Reporting.