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Divert some of your limited capital to legal services says the lawyer…. before you hit delete, please allow me to explain. Having 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
Do you know the difference between a Partnership, LLC or Corporation and how that decision will affect your growing business? Have you thought about your exit strategy and what provisions you may need in the operating agreement or bylaws which will make it easier for you to do so? 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? Just as you wouldn’t buy a piece of property before you check out the neighborhood, you shouldn’t make decisions about your business’s corporate structure without consulting an attorney and your CPA. Getting perspective before you make critical decisions is the wise thing to do.
2. Access to a Network of Other Professionals
When you are kicking off your business, there are thousands of 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 work with either directly or indirectly. Being a “connector” for my clients is one of the most rewarding parts of my work and it is something clients value. You miss that benefit if you don’t have a relationship with a business lawyer.
3. Offense, Not Defense
Inevitably, when you need a lawyer, it’s probably too late to find the right one. 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 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 professional resources; and (2) if you already have a business lawyer on your team, you can start formulating 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 many entrepreneurs who save themselves time and expense by gathering a few examples of form contracts and provisions and give to me as a starting point. Here is the problem with too much do-it yourselfing, you lack context and context is where 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 sites like LegalZoom® now have an option to talk to a lawyer. It’s never one size fits all. Never. Forms are great but only an attorney can mold them to fit your business. If you are worried about cost, look to lawyers who understand that and can work with you on alternative fee structures.
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 protecting it. How do you know if you should 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 and, in the unfortunate event you need one, you will be happy to have developed that relationship ahead of time.
