As business owners, it is easy to think that we can “get by” without ever needing the services of an attorney. And while there may be instances where you really can DIY, attorney and guest blogger, Traci Ellis also reminds of us that there are times when you definitely should seek legal counsel. Read on to hear what Traci has to stay.
Turnabout is fair play, as the saying goes. Last month, I gave tips on when NOT to hire an attorney. So, when should you hire one?
1. Before You Launch Your Business. Before you form your business, to discuss which legal entity is right for you. It’s important that you understand the legal implications of choosing one entity over another. Also, you need to know which two business formations you should always avoid. A good small business attorney can discuss your choices and help you make the right choice–from the beginning. It is always cheaper to do it right up front, than to try to change it later.
2. Before You Sign Contracts (or Pay Someone a Large Sum of Money with NO Written Contract). I know a lot of business folks who get their contracts off of the internet or from a buddy and then “tailor” them to fit their needs. That’s one way to get contracts drafted. But, it’s not even close to being the best way to ensure that your business and legal interests are protected. No matter how many contracts you’ve seen or negotiated, just know that chances are slim that you know enough about contract law, best drafting practices, case law on certain issues, contract drafting nuances, etc., to adequately protect yourself and flush out the “gotchas” in a contract. If the business deal is worthy of doing, it’s worthy of spending the time and money to have it documented correctly.
Additionally, you should absolutely, positively STOP downloading contracts off the internet and using them in your business! If you’ve been following my blog, then you know why. This is Why Google Can’t Be Your Small Business Attorney.
3. Big Disputes. When you are in a serious business dispute that has substantial business implications, don’t wait until you are sued or you’re ready to sue someone to consult with an attorney. Involving an attorney early on in a dispute can often head off bigger problems later. It will be infinitely more expensive to call in an attorney later on in the dispute when there’s lots of history than it is to get an attorney involved early on.
4. Major Transactions. When you are considering any major transaction such as buying or selling a company, do not, I repeat, do not begin these types of negotiations without legal counsel. You are asking for trouble. I once had a client that began negotiations with her largest competitor to sell her company to the competitor. By the time she called me, she had already turned over reams of confidential company documentation, including some important intellectual property information, without a non-disclosure agreement in place! Sometimes, it is easy to forget what seems like the obvious when you are intimately involved in the deal and when the “obvious” is not your expertise.
5. Trademarks. Unless you really know how to use the USPTO website to search for trademarks, it’s easy to miss a trademark. Also, you need to understand how trademark examiners think and what the case law says to understand why you can’t trademark a certain mark that is not the same as someone else’s. There are nuances there that are not obvious to the layperson.
The risk is that you miss a registered mark (or fail to understand that someone with a similar mark can keep you from using your intended mark), start branding your company, and then get a “cease and desist” letter from someone on the other side of the country demanding that you stop using your mark. If it turns out the person is right, you will have to re-brand your company…and all the money spent on logos, graphics, business cards and any other business “paraphanalia” will be wasted. You may even have to change the website URL that you’ve undoubtedly worked so hard to get noticed in cyberspace.
Author, speaker, business “therapist”, practicing attorney, and passionate promoter of women entrepreneurs, Traci Ellis is not your typical business lawyer. Known for telling it like it is, she likes to “keep it real” with new business owners while sharing practical wisdom and refreshing insight on legal and business issues related to starting, running and growing small businesses. Whether you are thinking about starting a business or have already stepped into the exciting world of entrepreneurship, Traci brings her nineteen years of practicing law and “baptism by fire” entrepreneurship experience to teach, humor, and challenge you, but most importantly to help you be a better business owner.
Visit http://launchtherapy.com for more information.