Why You Should Develop a Relationship With a Business Lawyer

Why you should hire a business lawyer

Hiring a business lawyer means creating a strategic partnership to help steer your business through numerous situations. This legal professional will learn about you and your company and be able to provide nuanced direction, advice and support. 

Zain Ali, a corporate lawyer at the commercial and general law firm Affinity Law, emphasized that hiring a business lawyer can help mitigate risks before they become costly mistakes. “Without legal counsel from the start, business owners may encounter issues like improperly structured contracts, intellectual property disputes or regulatory compliance failures,” Ali explained. “These oversights can lead to expensive litigation or financial losses down the road, which could easily have been avoided with proper legal guidance.”

Consider the following top reasons businesses should partner with a legal professional.

1. A business lawyer can provide startup advice. 

A good business lawyer can help you overcome the challenges of starting a business. Their guidance and expertise are particularly valuable before your company even gets off the ground, helping you create a strong legal foundation that can protect your interests in the long run. 

For example, deciding on the type of business you form, such as a limited liability company, sole proprietorship, partnership or S corporation, can be complicated. Each structure has varying degrees of liability and tax implications. Choosing the right option will protect you in the long run, save you money for years to come and shield you potentially from personal liability.

“There are a few legal missteps that business owners often make when they don’t have legal guidance,” noted Darrell P. White, partner at Kimura London & White LLP. “One big one is choosing the wrong business structure, which can lead to serious liability issues down the line.”

2. A business lawyer can help you create and enforce contracts. 

Contracts govern numerous business relationships. Examples include: 

• Employment contracts
• Customer agreements
• Independent contractor agreements 
• Supplier contracts 
• Consultant agreements
• Partner agreements
• Investor and stakeholder contracts

Every contract contains critical provisions that depend on your business’s relationship with the other party. For example, a customer contract will outline what your business is expected to provide and how you’ll be paid. Consultant and contractor agreements will specify the details of the work these professionals will perform for you and when they’ll receive payment. 

Your lawyer can ensure that all agreements provide your company with the highest level of protection. 

Mark Hirsch, a lawyer at Templer and Hirsch, agrees that legal professionals can be invaluable when dealing with contracts. “Lawyers ensure that your contracts with suppliers, workers and business partners are legally binding and protect your interests,” Hirsch explained. “I’ve helped many businesses escape expensive lawsuits by writing up and reviewing agreements early on.”

Jason Woo, owner of Able Hardware, shared his experience with getting a lawyer’s assistance with contracts. “One common legal mistake businesses often make is incorrectly interpreting contracts, leading to unfavorable terms or disputes. We navigated these issues with our lawyer’s assistance, securing better terms with partners and suppliers,” Woo explained.

3. A business lawyer can help you comply with tax obligations. 

Complying with tax law is one of the most complicated aspects of running a business. Fortunately, a business lawyer’s expert advice can prevent future taxation issues and identify credits and deductions to save you money during tax season. “Many business owners make the mistake of overlooking tax implications,” Ali cautioned. “By working with a business attorney, you can avoid these mistakes and make informed decisions that protect your business from legal challenges.”

Your business lawyer can help you develop a proactive recordkeeping system to simplify tax filing preparations and apprise you of due dates and filing deadlines for payroll taxes and other tax obligations. You can concentrate on running your business while your lawyer ensures your tax compliance. 

4. A business lawyer can help protect your cash, assets and property.

Your business lawyer can ensure your business assets and cash, including your intellectual property, are protected:

• Cash protection: A business lawyer can help safeguard your finances by drafting contracts that protect your revenue streams and minimize risks. They can also advise you on structuring your business accounts to prevent unauthorized access or mismanagement, ensuring your funds are secure. Additionally, they can help you set up contingency plans or trusts to protect your cash in case of legal disputes or financial difficulties.
• Asset protection: Attorneys can help you with trademark registrations and copyright applications. They can add a nondisclosure agreement (NDA) to an outside consultant’s or contractor’s agreement if they handle sensitive proprietary information. They can also advise you on enforcing the NDA.
• Property protection: Your business lawyer can draw up a liability waiver to shield you from prosecution if a customer gets injured on your premises. This protection is particularly helpful for bars, restaurants and other businesses that welcome the public.

5. A business lawyer can ensure compliance with employment laws. 

Employment and anti-discrimination laws are complex. Business owners must consider numerous factors, including federal and state legislation, when hiring, managing and firing staff members.

Steven Chizen, founder of Chizen Law, has seen businesses without strong legal support expose themselves to employment lawsuits. “There are so many complex labor laws, particularly in states like California, that a business must follow to lawfully employ workers,” Chizen cautioned. “Failing to follow such laws exposes a business to great legal risk that can sometimes even be catastrophic.”

Clear employment contracts are particularly crucial. Your lawyer will ensure these agreements cover the following: 

• The responsibilities of both parties in the employer-employee relationship 
• How the employee’s work will be compensated and what benefits they will receive 
• Commercial confidentiality requirements
• Noncompete clauses that restrict the employee’s ability to approach the business’s customers if they work for a competitor in the future
• Stipulations that prevent former employees from taking data that belongs to the business (especially relevant in industries like recruitment consulting)

Your lawyer can also help you create an employee manual that covers standard employee concerns, such as company dress codes and paid time off policies.

6. A business lawyer can provide bankruptcy guidance.

Economic downturns and unforeseen circumstances can devastate a business financially. They can put your company in a situation you simply can’t recover from. While keeping your business from bankruptcy may be your goal, this isn’t always possible. In this situation, your attorney can guide you through the bankruptcy process so your business can recover and even flourish. 

Hard times can be overwhelming, but your business lawyer is an expert at navigating them and can help you decide on the right course of action. Filing for Chapter 11 bankruptcy can help you reorganize your business. With your lawyer’s guidance, you can develop a plan to make things right with your creditors. You may even be able to discharge a portion of the debt you own. Your lawyer will present the plan to the bankruptcy court and with their approval, you’ll be on the path to financial recovery.

7. A business lawyer can represent you in court. 

Your attorney’s primary goal is to keep you out of court. If you must sue someone or are facing a business lawsuit, your lawyer will do everything possible to settle before the case reaches a courtroom. Settling disputes outside of court generally costs less and takes a fraction of the time.

However, if an agreement can’t be reached, your attorney will be with you every step of the way to help guide you through the legal process. They will represent your interests in court and, if necessary, help you propose a settlement during proceedings to resolve the situation at a lower cost.

8. A business lawyer can advise you on day-to-day issues. 

A business lawyer will be there for significant legal events. However, they’re also an excellent resource to support you and your organization on day-to-day issues. Decision-making can be challenging and having an expert on your side can help. Your lawyer can offer immediate advice and provide guidance through everything from transactions to terminations.

Ali emphasized that a business attorney’s continual advice is crucial, particularly as your business grows. “Business attorneys provide ongoing support in various areas, including drafting and reviewing contracts, ensuring regulatory compliance and advising on employment matters,” Ali explained. “As companies expand, legal counsel is critical for structuring partnerships, protecting intellectual property and navigating mergers or acquisitions.”

Chris Estrada, CEO and Founder of Nationwide United Auto Transport, agrees that growing businesses need expert legal help as they encounter new challenges. “In my experience, a good business attorney has been instrumental in contract interpretations, zoning compliances and copyright laws as we grow and diversify our services,” Estrada shared.

How to hire the right lawyer for your business

Business lawyers are not one-size-fits-all. As with all meaningful business relationships, ensuring you’re professionally compatible is paramount. It’s essential to take your time when seeking legal support services and follow these best practices:

Understand your company’s legal needs.

Seek out a business law firm with experience in your industry. Their specialized knowledge will better equip them to protect your business from typical issues. 

Ali agrees that finding a business lawyer with relevant industry experience is essential. “Look for an attorney who demonstrates expertise in contracts, employment law, intellectual property and compliance,” Ali advised. “Additionally, the lawyer’s communication style, accessibility and problem-solving approach should align with your business needs, ensuring a productive and collaborative relationship.”

Research attorneys and ask for referrals.

With so many options available, researching business lawyers can be daunting. Online reviews can be helpful, particularly actual client reviews and ratings. Asking for referrals from other business owners or professionals in your industry is another effective way to find a reliable attorney. “Reputation matters,” White said. “Checking client testimonials and past successes can give you a sense of their track record.”

Interview potential legal representatives.

Make a shortlist of candidates and sit down with each to get to know them better. Ask questions and follow up on their responses. The conversation should leave you feeling confident in their abilities. Here are a few topics to cover: 

• Ask about their experience in your specific industry. 
• Ask why they think they would best represent your business. 
• Explain your goals as a business owner and ask them how they can help you achieve them.

When choosing a business lawyer, trust your instincts. “It is wise to consider a lawyer’s experience in your industry, communication style and ethos,” Estrada recommended. While knowledge and experience are important, you need to feel that you can communicate comfortably with your attorney and that you trust their judgment. 

Build a partnership with your business lawyer

Building a strong, long-term partnership with your business attorney requires clear communication and trust. Update them on operational changes and growth plans and don’t hesitate to ask questions. Consistent communication ensures you get the right advice to keep your business on track.

“Building a solid relationship with your business lawyer is all about communication and collaboration,” White advised. “Regular check-ins are a great way to stay updated on legal matters and ensure you’re on the same page.” White also noted that transparency is crucial. “You’ll want to share relevant business information so your lawyer can offer the best possible advice.”