Unless you start your business as a sole proprietorship, you'll normally need an attorney's help to prepare a partnership agreement or set up your legal business entity. (For more information about forms of business structure, see the article How to Determine the Legal Structure of Your Business.) Most experts also recommend consulting with an attorney to make sure you obtain the necessary licenses, permits and contracts for your type of business.
Although some lawyers have a general practice that covers most areas of law, most lawyers choose to focus on one or a few types of legal issues. Because of this, one lawyer may not be able to handle all of the legal needs that arise during the lifetime of your business.
Here are some of the types of lawyers that small businesses may need to consult with:
- A business lawyer. A lawyer who handles business transactions can help you determine what kind of entity to form and advise you about ongoing recordkeeping and reporting requirements. A business lawyer can also prepare and review contracts and help you with succession planning and closing your business.
- An intellectual property lawyer. Your business lawyer may be able to help you with registering copyrights, researching and registering trademarks, and preparing agreements relating to copyrights and trademarks. If not, you can consult with an intellectual property lawyer. If you need advice or assistance with patents, you'll need a patent lawyer. Patent law is a specialized field and patent lawyers must have a scientific or engineering background and have passed a patent law bar exam.
- An employment lawyer. An employment lawyer can help ensure that you have the proper employment contracts, can advise you on proper hiring and firing practices, can advise you on anti-discrimination laws and the steps you should take to avoid violating them, and can represent you if an employee makes a claim against you, including a claim for discrimination or harassment.
- A real estate lawyer. A real estate lawyer can help you negotiate the terms of an office lease or a lease or purchase of other real estate, and can help ensure that the terms of the transaction are fair to you.
- A litigator. If your business is sued for something, or if you are considering filing a lawsuit, you will need an attorney who has experience handling the type of lawsuit you are facing. For example, some lawyers are skilled at cases involving personal injuries, while others handle business disputes. If a claim against you is covered by an insurance policy, your insurer may choose and pay the attorney.
- A bankruptcy lawyer. Hopefully your business will never need bankruptcy protection, but if your business runs into financial trouble, a bankruptcy lawyer can advise you of your options.
- Industry-specific lawyers. Depending on the type of business you have, you may need advice from a lawyer who focuses on your industry. For example, if you are a filmmaker, you'll need an entertainment lawyer. If you develop software, you'll want a lawyer who understands the technical and licensing issues involved. A lawyer who knows your industry understands the standard business practices and is better equipped to advise you and help you negotiate favorable contracts.
So how do you find the right attorney for your business? If there's a lawyer you've used before and liked, such as the lawyer who helped you establish your business, it's a good idea to contact that lawyer first. If that lawyer can't help you with your current issue, he or she may be able to refer you to another lawyer in his or her firm, or to a lawyer at another firm.
Bar associations can also make referrals, but they will not be able to provide specific information about any of their members. You can also get recommendations from other small business owners or from professionals like accountants and bankers. Create a short list of candidates, and then make appointments to evaluate which you feel most comfortable working with.
Questions you should ask include:
- What is your background and experience with businesses like mine? Look for an attorney with the experience you need.
- Will I always work with you, or will I be assigned to other attorneys in your firm?
- How will I be charged? Attorneys bill both on an hourly basis and by the service rendered; for example, you may pay $150 per hour for a consultation and a flat fee of $1,200 for setting up a corporation. Legal fees can add up quickly; make sure you know how you will be charged.
- Do you currently represent my competition? An attorney can't represent you if there's a conflict of interest.
Don't be afraid to "shop around" for an attorney with the right blend of experience, skills, and personality. Your goal is to find a lawyer that can not only provide great advice and counsel, but also to find a lawyer you will feel comfortable working with over the long term.
As you build that relationship, make sure each time you speak you are prepared, are honest, and that you don't withhold information. Your lawyer can only help you to the extent he or she fully understands your situation and your needs.