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A Small Business Owners Guide to using an Attorney

Updated on February 6, 2014

Nobody Loves Lawyer Jokes more than me but....

Do you know the difference between a dead lawyer in the middle of the road and a dead armadillo? The armadillo has skid marks in front of it.

O.k., we got the lawyer joke out of the way. Now time to talk about the serious topic of legal small business issues. The old adage of an ounce of prevention is worth a pound of cure certainly applies to small business owners and legal advice. If you wait until you need a lawyer you probably have an expensive problem. Having owned several businesses over the years I have learned this lesson the hard way. Legal small business issues can turn into big, expensive and energy sapping problems. In many cases an avoidable legal debacle has actually caused businesses to fail. Now, here are some circumstances where paying a lawyer for prevention is a cheap investment.

The Critical 4 Situations to use a Specialized Lawyer Before you do something.

The circumstances below, in my opinion, require the services of a specialized lawyer. The law is like medicine in some respects. A general practitioner can help with a cold but you want a specialist to treat your diabetes.

Here are the critical circumstances where a lawyer specialist is a good idea:

  • Protect the value of your intellectual property - In today's world with so much value in businesses being tied to the web it is critical to make certain that you or your company owns the value you are creating. There are very specific laws relating to intellectual property. You could pay an employee to do something on your instructions but the employee could actually own the work product not you! Talk to an intellectual property lawyer about your business and they can identify for you the areas you should get protection. I once sold a food company but during the due diligence process it was discovered that the seller didn't own the main recipe used by the company. The result was the seller had to give a significant amount of money to the recipe owner so that the sale could be completed and the buyer would own the recipe. This oversight when he created the food business cost him many thousands of dollars when he tried to sell his company.
  • Hiring Employees - Once you've hired someone you are in a contract whether you like it or not. Changing that contract is not easy. For instance, if you hire an employee and don't have the proper protection that employee could take information gained from you and your company and use that information against you with another employer or by going into business for themselves. Get the proper protection in place WHEN you hire the employee, don't wait until the employee holds you hostage. Here's a good blog from an Employment Attorney that can give you an idea of what is important and why. This same attorney should give you counsel when you plan to fire people also,
  • Accepting Contracts from Customers - Many big companies want contracts for services with smaller companies. Do not enter into these agreements without understanding what risks you are taking. I know you want the order but if something goes wrong are the penalties so high that they could put you out of business? Does the contract prevent you from doing business with other customers? Get advice from a business contracts attorney.
  • Leases - Leases are notoriously complex and some landlords specialize in making it look easy to get into a pace but a nightmare to get out. Having a real estate attorney spend an couple of hours working on your lease could save you tens of thousands of dollars in hard costs or opportunity costs. This advice also applies to copier leases, phone systems and all lease obligations, even though they seem small.

Preventions Cost Less Than Cures

It usually costs less to hire a specialist for legal matters than it costs to hire a generalist because a specialist, although their hourly rate might be higher, will likely do the work faster and will usually provide more protection for you.

In this respect attorneys are like doctors, you can go to your family doctor for routine issues but when you have something serious you are almost always better off with a specialist.

It's o.k. tell lawyer jokes but don't make your business practices the jokes that lawyers tell each other when someone decides to sue you!

Another free web resource to locate an attorney is Martindale Hubbell .


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    • BizVT34 profile image

      BizVT34 5 years ago from USA

      Wearmanyhats... all good points, thanks for stopping by my Hub.

    • profile image

      Wearmanyhats 5 years ago

      Don't forget that incorporation is also best done by an attorney, or when facing a lawsuit, and always when preparing your will to take care of your business should you pass on unexpectantly. All of those require special attorneys but without their expertise, you or your heirs would have more problems than anyone would want.