What Is Business Law?

Do I Need a Lawyer?

The short answer? You bet!

LAWYERS SOMETIMES GET A BAD RAP. We've all heard our share of lawyer jokes. But as an entrepreneur, you'd be silly to buy into the common stereotypes that have accumulated over centuries. Smart entrepreneurs view attorneys as a valuable resource and one of their most significant allies in starting, growing, protecting and ensuring the successful lives of their businesses.

So what are lawyers good for?

Lawyers are good for a number of things, some of which are less obvious than others. Most people think of attorneys when they are contemplating starting a new business, when creating and reviewing contracts, and of course when they need protecting in the event of a legal issue.

However, there are many more duties a business owner can ask an attorney to handle. The possibilities are almost endless, but include these:

• Monitoring and fulfilling ongoing filing requirements, depending on what type of business you have

• Ensuring compliance with any regulations that apply to your company

• Keeping you current on product liability developments and coverage

• Serving as your Registered Agent, which means they act as a designated recipient of all Service of Process (SOP) communications in the event of a legal action or lawsuit

• Preparing fundraising documents, such as private placement memoranda

• Ensuring your Intellectual Property protection, which can be extremely important if you or your business have a unique idea or product not currently available in the marketplace

• Conducting litigations, making real estate and equipment arrangements, etc.

• Making collections on invoices, drawing up template agreements your non- legal associates can use with proper training and guidelines

• Scanning trade news and alerting you to any emerging issues you need to anticipate

• Helping you set up document and data archiving and protection resources

• Connecting you with useful business contacts in the attorney's practice or even social circles

If you are still dubious, just ask self-employed and small business owners what kinds of support they get from their attorneys. You'll hear some amazing stories.

But I can't afford an attorney. I need that money for more important things!

Yes, legal costs can mount up, but it's often true that those sums are a fraction of what you could pay or lose without the benefit of competent legal advice. You are probably gifted and well grounded in your core business. Don't assume that that naturally qualifies you to be a legal expert, even in your own industry sector's affairs.

And if your start-up is the first one you've launched, you may learn a lot from your seasoned attorney's broad view of other small businesses and their successes and failures. You may have many governmental responsibilities to fulfill as well: Depending on what type of business you are currently operating or starting, you may owe information to various units of government and others. You cannot afford to make mistakes through ignorance or inexperience in these areas.

But what are the risks of skipping steps usually handled by attorneys?

There are a number of common business mistakes made by foolish entrepreneurs. One common error is selecting the wrong type of business entity or filing status for a new business. This mistake can end in much more labor-intensive document preparation and filings, unnecessary expenses, complicated and timeconsuming reporting requirements and potentially unpleasant tax implications.

Another common mistake hurts business owners who improperly formulate employment, confidentiality and non-disclosure agreements. These documents, more than any others, can prevent associates, among others, from "biting the hand that feeds them." That hand is yours.

• Imagine hiring and training someone who then decides she will go out on her own in your neighborhood and start a competing business.

• Or what if you hire a salesperson whom you pay to build a large book of business and contacts, but who then tries to blackmail you into paying him more or threatens to take that business and relationships across town, to the competitor?

• What about when you try to raise capital to start or grow a business, and you are making your rounds visiting different financial resources, sharing your vision and strategies. Do you want to make sure that these individuals can't make your idea theirs?

Couldn't happen to you?

You might feel like your tiny start-up business is too small to attract legal problems. Not so! A gentleman I know very well decided he wanted to become a partner in a local landscape company. He met with the owner and decided not only to become a partner but to invest a large sum of capital. So the two men drafted a very basic hand- written contract. It wasn't witnessed by anyone. There was only one signed original, and it was kept at the company.

The money was used to buy more equipment and to pay some outstanding payroll obligations. The company continued to operate for nearly a year while the two partners went...