7 Good Reasons To Call A Lawyer
By Jeff Wuorio
Reprinted with permission from Microsoft Small Business Center
For many small-business owners, contacting an attorney is akin to opening a faucet — everything gushes out but little comes back in return, short of a hefty water bill.
OK, so this analogy is a little trite. It’s also horribly inaccurate. Legal advice and guidance in varied forms is absolutely central to any small business. You will get a bill, yes. But using an attorney doesn’t have to be a burdensome financial drain.
Here are seven signs that suggest your business may benefit from the involvement of an attorney:
1. You’re starting a business. Far too many businesspeople get their operations up and running before contacting an attorney for legal guidance. Don’t make the same mistake. Before the very first dime of income shows up on your ledger, hook up with an attorney to review business structure, legal ramifications and other elements designed to protect your business and help it flourish. “It’s essential that an attorney become involved before you start,” notes attorney John Ventura, author of “The Everyday Law Kit for Dummies.” “An attorney isn’t someone you go to just when you’re in some sort of trouble.”
2. Check your contracts. It may be a pleasant afterthought to a bygone era, but these days it’s rarely a wise idea to conduct business with a smile and a handshake. That means it’s imperative for an attorney to review every contract you use in your business, both with customers as well as suppliers — or draw up suitable contracts if none are in place. “We’ve become so litigious as a society that it’s critical that you have contracts that protect all your business relationships,” Ventura says.
3. Review your exit strategy. It may sound macabre, but it’s also a good idea to have an attorney construct and regularly review a suitable exit plan should your business go under, no matter how well things may be steaming along now. For instance, an experienced bankruptcy attorney can help identify — and protect — property and other items that, should the worse happen, are exempt from bankruptcy proceedings. “You’re always at risk, so planning a suitable exit strategy is absolutely essential,” Ventura says. “You should know your bankruptcy options, ways you can protect your assets and simply lessen the overall blow of failure.”
4. Check your debt collection. As money becomes tight in a dicey economy, it can become more difficult to collect funds owed you. An experienced attorney can advise you on suitable collection methodology and resources. That way, you can avoid becoming entangled in any legal action against an overzealous collection agency. “Cash flow is king, so when that gets slow, you get aggressive,” Ventura says. “But you have to be careful in using some collection agencies — if they step over the line, that can always get back to you.”
5. Begin to draw on your wealth. Enough stories about ways to avoid disaster. An experienced estate attorney also is essential in setting up programs to fund retirement from the proceeds derived from the business. Here is something that, as Ventura notes, many small-business people tend to put off until the very final moment. “Most entrepreneurs don’t even start thinking about their retirement until they’re well in their fifties. If you’re doing well, an estate attorney can help you start taking the wealth out of the business to fund your retirement.”
6. Keep the business going after you retire. Few small-business people want to see their businesses close for good once they retire. A key area a solid business attorney can address is succession — establishing procedures and step-by-step guidelines to hand off ownership of even a small portion of your business to someone else. An attorney not only can strategize on ways to keep the business alive and flourishing, but can also possibly help you determine an ancillary source of income from the business to round out your retirement funding.
7. Resolve a business dispute. Yes, this is an obvious reason to get a lawyer. Merely hiring an attorney will show you mean business, and may end up getting you the results you desire. A lawyer also may be able to help you avoid lengthy and costly court action. Moreover, a lawyer can help you avoid — by working on your own — turning what might be a bad situation for your business into something worse.
In seeking out an attorney, here are two important tips.
Get a specialist when you need one. Law is no different from scads of other professions. We live in an age of specificity, so be certain to establish relationships with attorneys who have training and experience in defined areas. Not only does that provide you with the best possible guidance, but it can also serve as a system of checks and balances. For instance, an estate attorney may point out a problem in your retirement planning that, say, a general practitioner might overlook.
Don’t fear the cost. No one’s about to claim that getting solid legal advice is dirt cheap. But it need not be as prohibitively expensive as you might fear. For one thing, Ventura urges entrepreneurs to delineate what sort of legal advice will be an ongoing requirement and what can be addressed on an as-needed basis — that can save on retainer fees right there. And, adds Ventura, don’t be gun-shy about dickering over price. Some attorneys may be willing to cut rates for a guaranteed amount of work, while others may gladly set up payment plans for particularly expensive bills. “I think the days when an attorney simply charged by the hour have gone by the board,” Ventura says. “Shop around and get a quote for fees. And, once you find someone you like, clear the air and get the subject of money out of the way.”
