People who start businesses pour a lot of resources and energy into seeing their venture succeed. Just like parents nurturing children, business owners ensure their company’s growth in all ways they can, including consulting professionals. In child-rearing, the specialist is the family pediatrician; in commerce, it’s the business lawyer..
Parents do not need doctors to teach them how to raise a child, and business-people don’t need lawyers to instruct them on building a company. However, advice from professionals is undoubtedly valuable. In fact, it can make all of the difference between success and failure. .
The importance of having a business lawyer
Hiring a lawyer to act as a legal quarterback for your business has so many benefits. It is a truism that “you don’t know what you don’t know”. The business world today is riddled with complexity, regulations and traps for the unwary. Having a versatile business attorney to act in the role of an outside general counsel can make all the difference in whether your business succeeds.
Legal advice can help entrepreneurs and business avoid expensive mistakes at every stage of a busieness’ life cycle. Good legal advice can set the stage for a business to flourish and allow its founders to focus on what they do best – managing and growing their business and realizing their vision.
In the start-up phase, a business lawyer can add enormous value by helping the founders make sound decisions, minimize risks and protect the fledgling business from avoidable pitfalls. For example, choosing the right entity is a critical initial decision. A mistake in this area can result in unnecessary tax liabilities, perhaps subject the business’ owners to liability or other repercussions as the business grows. Properly negotiating and documenting arrangements among founders is critical. The governance of the business must be thoughtfully constructed and documented. The founders need to negotiate and document such matters as how profits may be distributed, who makes day to day decisions, who make major decisions and many more critical matters. They need to consider what happens if a founder leaves or is unable to continue in the business. Advice with respect to protecting the startups intellectual property may make the difference between a valuable enterprise and one that is easily crushed. Negotiation of real property leases, structuring employment agreements and arrangements, financing arrangements and many other essential matters must be worked out for every significant \\\startup.
Of course, one lawyer can not possibly handle all of the many issues that arise in any phase of a business’ life. But having a primary point of contact to coordinate legal efforts and manage your legal budget can be an essential component of a successful enterprise from the onset.
Once the business is organized and operating, a plethora of legal issues can arise. These can include tax issues, commercial disputes, supplier arrangements, regulatory issues and compliance, trade law concerns, employment arrangements and more. Having a point person to manage all of these issues and handle them appropriately can make your business more profitable or perhaps prevent you from facing ruinous problems, Even small preventative measures, such as reviewing your important business forms, can help your business avoid liability.
In the event a major legal problem does arise, such as a major claim or litigation, a lawyer who truly knows you and your business can play an essential role in managing the issue and bringing it to the best possible conclusion. Importantly, having an outside general counsel can significantly reduce the extent to which legal issues distract management from running the business.
As the life cycle of the business continues, a business lawyer in the role of outside general counsel continues to pay dividends and add value. So many businesses fail to make appropriate succession plans. A lawyer who knows you, your family, your co-founders and your situation can coordinate with other appropriate professionals, such as financial consultant, estate planners and investment bankers to help your business continue, and help you and your family enjoy the fruits of success. As the business grows and enters into financing arrangements, capital raises or perhaps a public offering or strategic sale of the business, having a business whose legal affairs are in order, and who had a “point person” who knows the business vastly increases the likelihood of a successful and efficient process.
Finally, in the event of a business crisis, a business lawyer who knows you and your business can have an enormous positive impact. Your outside general counsel can work with you and your insolvency professionals and advisors to make a business plan to save the business, either with or without filing a bankruptcy for the business. Although no one wants to think about their venture going under, it’s a possibility that all business owners should consider. Even if the business is not viable, a lawyer on your team that knows you and your business, and who was their every step of the way, can help you and your business reach the best soft landing.
What it means for a lawyer to be on retainer
A lawyer on retainer for a business is like a family doctor—they are a go-to professional for a particular company. If you have a lawyer on retainer, they learn the nuances of your organizational structure, business goals, and even financial situation.
Therefore, if you have legal work to accomplish, they can provide targeted assistance that responds to your needs or help you find the best person to handle the matter. Having a go-to attorney saves you the time you’d spend finding the right attorney for every task, coordinating their work, monitoring their work and watching the legal budget.
When choosing an attorney, get someone who can be available at your convenience, has experience in business law and is willing to be a long-term partner for the company. It is important to ensure you have a personal rapport with the person. It is equally important, however, that your outside general counsel is not afraid to constructively tell you when your they do not agree with you. Their role is to guide you in realizing your goals.
Find your next partner for your business’ growth at Silverberg Law Firm LLC. We have over 30 years of experience in New York and New Jersey business law, and as business bankruptcy attorneys, helping small and middle enterprises reach the best outcomes. Some of our proudest achievements have been proudly watching our business clients flourish, and avoid problems, as we play our small part advising management and acting as outside general counsel. Request a free consultation today to learn more!