I know, I know color you… suspicious. The person with "Esq" after her name advises you to divert your very limited capital into hiring an attorney. Before you hit delete though, give me a chance to explain. Getting a business lawyer on your team right away isn’t just a "nice to have" it is a "must have" and here is why.
1. Foundation, Foundation, Foundation.
You wouldn’t buy a piece of property before you check out the neighborhood, you shouldn’t make a decision on what corporate structure you will use for your business without consulting an attorney and your CPA. Do you know the difference between a partnership, an LLC or a Corporation and how that decision will affect your growing business? Have you thought about your exit strategy and what provisions you may need in your operating agreement or bylaws which will make it easier for you to get there? Does it make sense to house your intellectual property in a different entity and license it to the one where you are actually doing business? Getting some perspective before you make a decision is really the wise thing to do.
2. Access to Network of Other Professionals.
When you are kicking off your business there are a thousand demands on your time and issues pop up every day that call for expertise you may not have on your current team. Generally, lawyers have a great network of people they either work with directly and regularly or have helped their clients solve specific problems. Being a “connector” for my clients is one of the most rewarding parts of my work and it is something my clients appreciate. You miss that benefit if you don’t have a relationship with a business lawyer.
3. Offense Not Defense.
I call this the "when you need a lawyer, it’s probably too late to find the right one" conundrum. Picture this scenario ---your team is working feverishly to deliver your latest product, you have your marketing strategy in place and are in your daily development meeting when the Fed-Ex driver or worse yet a process server wanders in with a gift—a cease and desist letter or a lawsuit. You need a lawyer and you need one immediately. Two things I can tell you: (1) panic is never the best mode in which to find a lawyer; and (2) if you already have a resource, you will be able to start strategizing on a solution immediately.
4. Doing it Yourself Holds Risks
I am a big fan of all the business and legal resources the internet has to offer. I work with lots of entrepreneurs who save themselves time and expense by gathering a few examples of form contracts and provisions they like or that are used in their industry and provide it to me as a starting point. Here’s the problem with too much "do it yourself" ing though, you lack context and that context is where all the big problems occur. Don’t just think you can raise money for example with a "borrowed" subscription agreement and it will be fine. There is a reason a sites like LegalZoom® now have an option to talk to a lawyer—it is not one size fits all, ever. Forms are great but only an attorney can mold them to fit your business. If you are worried about cost look at lawyers who understand that and can work with you on a flat fee basis. Like everything else in life, cheapest isn't always best.
5. Your Intellectual Property is the Lifeblood of Your Business—Protect It.
Most businesses put a lot of time and money into creating a brand or a product but not nearly as much effort into making sure it is protected. How do you decide if it is necessary to file a federal registration for your trademark? What are the pros and cons of filing a patent? What are some of the emerging issues in intellectual property that directly affect your business? Again, context is key. A good business lawyer should be able to sit down with you and guide you through identifying and prioritizing what you need to get done and filed now and what may be a "nice to have," down the road.
Bottom line is that a business lawyer can really fill an important role in your extended outside team. How do you find the right person for the job? I’ll cover that in my next guest blog. More info at Becker Peters.