Why General Counsel for Small Businesses is Necessary
So you are sitting in your office working on nailing down a contract, and the other party decides to send you their standard contract. Being the astute business person that you are, you look over the contract and find changes. You send your changes to them, they send changes to you, then you have to go through their legal department and before you know it, you have spent countless hours working on this contract and away from your business.
Why did you do this? To save money? Time? If your business had an attorney for which it could rely upon to handle its business transactions, you would have saved more money and time than you did working on the contract. Why? Consider the amount of time and effort you spent review the contract or negotiation with the other party’s lawyer. How much of that time could you have spent securing other contracts or selling your product or billing hours under another contract? The amount of money that you would have paid to your attorney would have been less than the amount that you made working on your business.
I often have business owners tell me that they have never worked with an attorney before and have no idea how to deal with an attorney. One of the first things that business owners ask is “Why do I need an attorney if nothing is wrong with my business?” They will also say, “If I am ever in trouble, I will call you!”
Don’t wait for trouble. Be proactive to avoid It!
There is no worse time to contact an attorney for the first time than when you are in trouble. You are stressed, confused, and overwhelmed. It is best, and recommended to establish a relationship with a small business lawyer long before you are in trouble. As a small business lawyer, the most important one is to protect your interests. A small business lawyer can help you with everything from drafting contracts to negotiating leases. They can also provide valuable legal advice when you’re making decisions about your business.
Having a business law attorney on your side that knows you and your business is imperative in this day in age. You want an attorney who you have had an opportunity to get to know and work with before something goes wrong. As a business owner, you want to surround yourself with persons who are there to assist you in the growth of your company, not just to save it from destruction. As a business law attorney, my job is to assist my clients with protecting their business and making sure that they have as much working in their favor as possible. I understand that it is important for my clients to know and understand their legal rights and responsibilities, and to make sure that they continue to profit.
Does your business need an general counsel?
Well, if you intend to increase your business; the answer is yes. If you are hiring new employees; the answer is yes. If you are expanding by purchasing a new business, entering a lease, or offering shares in your company; the answer is yes.
In this litigious society, it is important that businesses protect themselves at all times. The difference between having an attorney for your business and not having one can make the difference between the thousands of dollars you will spend on a lawsuit or the thousand of dollars you will save by staying out of the courtroom.
1. Licensing
Licensing is one of the most common legal issues small businesses encounter. Make sure you’re in accordance with your local government’s requirements for business licensing. Otherwise, you will likely find yourself facing fees that could easily have been avoided. The cost of the license may vary depending on where you operate, but the need to have one remains constant throughout the country. If you have any questions, consult your local government licensing agency, your lawyer, and/or your accountant.
2. Trademarks
Trademarks are another surprisingly common legal issue faced by small businesses.1 Be sure to do plenty of research ahead of naming or renaming your business or launching any new products or services. If you can think of a name, there’s always a chance someone else has as well, and it’s entirely possible that the other business already owns the trademark. Infringing on someone’s trademark is not the kind of legal hot water you want to find yourself in, even if that infringement was an honest mistake.
3. Employee Termination
It happens to many businesses. You hire someone you believe to be more qualified than they really are, and soon realize you’ll be losing money by keeping them around. Or you find out that they just don’t fit in with the rest of your employees and are affecting productivity and morale for the entire team. You can lessen your chances of legal repercussions if you take the right precautions before terminating anyone.2 This starts with spelling out the terms of employment in an employee manual and documenting any disciplinary actions involving the employee. If there’s any doubt about what you should do, it would be worth your while to consult your attorney.
4. Misclassification
Make sure you classify employees correctly as far as the government is concerned. “The misclassification of employees as independent contractors presents one of the most serious problems facing affected workers, employers and the entire economy,” according to the Federal Department of Labor.2 This is a subject the Department takes very seriously, so before you classify someone as an independent contractor, be sure to read the DOL guidelines, and contact the Nevada Department of Labor if you’re unsure.
5. Shareholders’ Agreement
If your business has more than one shareholder, an agreement is strongly encouraged. One day, the business may split up or be sold, and if no agreement exists, legal battles can — and likely will — ensue. Even if current shareholders are on the best of terms, things can always turn sour, and it’s not a good idea to leave any gray area when it comes to who gets what. The agreement should be drafted, or at the very least, overseen by a lawyer with experience in such matters.
6. Overtime Disputes
Make sure your overtime rules are clear and that you approve all overtime in advance. Not only will this provide you with a helpful financial control, it could save you potential legal trouble.
7. Litigiousness
This is one issue that you can control yourself. Don’t rush into a lawsuit, because doing so means paying legal fees, and as you can probably guess, these can add up quickly. If you can find a way to negotiate and settle a dispute outside of court, it might be wise to consider that option.
8. Compliance
One of the most important roles of a small business lawyer is to help you comply with the law. There are a lot of laws and regulations that small businesses have to comply with, and it can be tough to keep track of all of them. A small business lawyer can help you make sure that you are complying with all applicable laws and regulations.
9. Insight and Strategy
Finally, a small business lawyer can provide valuable advice when you are making decisions about your business. From choosing the right business structure to drafting contracts, a small business lawyer can help you make the best decisions for your business.
Consult an attorney if you have questions or concerns about any legal issue. Doing so will likely cost you less than the fees that come along with legal battles.
Litigation is an issue on the minds of many business owners. Certain matters arise that make litigation inevitable. Here are a few questions that I have received from business owners regarding issues that have led to litigation:
Our Landlord is not repairing the property as outlined in the contract, we stopped paying rent and now we are going to be evicted. What now? The first mistake was to not pay rent. Most lease agreements prohibit tenants from abating rent for any reason. Now that you have put on notice about eviction, you have two choices. Either to pay the back rent or file for a temporary restraining order (TRO). The TRO will put you immediately in litigation and will be costly. However, even if you pay the back rent, you may need to file a lawsuit to force the landlord to make the necessary repairs and/or repay you for them. Getting your attorney involved early in the conflict may help to resolve many issues before litigation arises.
I had a valid contract with A&Z Company; they now want to cancel the contract. What can I do? Depends on the contract. Your contract should outline your remedies for you. Generally, you have to give the breaching company notice. Meaning, that you need to send them a certified letter outlining the breach and giving them a certain amount of time to fix the problem. If they refuse, then you have a choice to litigate or let it go. While many will want to sue, the cost can be enormous. Be ready to spend several thousand dollars. Make sure that you keep clear records of the conversations that you have had with the breaching company regarding the contract. Documentation is important and is invaluable when substantiating your claim.
I have a partnership and my partner is pushing me out, what are my options? Again, what does the contract say? Partnerships, while easy to form are difficult to get out of. Both of you must agree to dissolve the partnership and if you do not, litigation may become necessary. If the agreement does not address withdrawal, you must use the courts to dissolve the partnership. You must be sure that you have the necessary documentation showing your interest in the partnership, as well as the partnership assets and liabilities. Make sure that at all times, you have access to the information regarding the partnership contracts and financial statements to protect your interests.
