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Why Utilizing Lawyers When Starting a Business Is a Good Idea

For those choosing to build out a brand or business right now, utilizing lawyers in the early stages might be a really good idea. Here’s how they can help.

For some, the havoc COVID-19 has wreaked on our economy—causing layoffs, business closings, and rising rates of unemployment—means now might not be the time to dive head-first into a new business venture.

For others, new-found free time might allow for moments of inspiration during which a plan begins to brew. And despite the fact that it's OK not to be productive, and to prioritize play while WFH, for those who do choose brand and business-building right now, utilizing lawyers in the early stages might be a really good idea.

For an entrepreneur, the varied responsibilities in the earliest days of planning or launching a business can be daunting. For someone without a background in law, the language found on tax or other legal forms can be difficult to interpret and, if misunderstood, could stall the process and cause headaches down the road. The stakes are high and the long-awaited plan is becoming a reality—why miss a step and delay or disrupt the process? Lawyers come in handy as you establish your business in its initial stages, simplifying startup processes and protecting the entity, as well as your employees and clients.

All business owners are assumed to know every relevant law and will be penalized for any infraction,” Connecticut-based attorney Everett Sussman tells Supermaker. “It is better to avoid a problem than to solve one.”

Lawyers aren’t required to launch or run a venture but enlisting their help can ease much worry, especially in the early days, whether your practice is complex or simple. Any business owner should feel confident asking for professional help in their efforts to launch a successful venture—while attorneys may charge hundreds of dollars by the hour, biting the cost at the start may pay off in the long run.

So, here are six reasons why an attorney’s assistance might benefit your operation and how lawyers can help you use the law to your advantage.

Lawyers simplify and organize a complicated paperwork process.

First things first, you’ll probably need to register your LLC, corporation, partnership, or nonprofit with your state (and any other states in which you plan to operate). Every business is required to attend to federal, state, and local paperwork, as well as third parties and the public. Missed deadlines and misunderstood legalease delay the process or result in fines or criminal charges — setbacks new business owners avoid as practice. From incorporation to leases and partnership agreements, a lawyer, especially one with experience in your type of business, holds a wealth of knowledge on the do’s and don'ts particular to your industry. Submitting tax forms and handling business audits—when an owner is put under the microscope, too—is where an attorney can work in your best interest, on your behalf.

“A good lawyer will never make you feel stupid or ‘in the way,’” Sussan says. Asking questions is a must, he says, as is developing trust and confidence in their ability to lead your business through a successful start.

They can protect your brand from infringement and claims.

Failure to protect a trademark or copyright can leave a business vulnerable to unnecessary troubles on the path to an otherwise successful start-up. Whether its allegations against your businesses’ intellectual property or litigation you need to pursue against another entity, consulting with an attorney to protect your brand’s logo and name, for example, can help avoid such headaches from the get-go. A lawyer can also help protect intangible assets such as computer software, devices, blueprints, or even certain business practices.

Sussman reminds that marketing and advertising are subject to regulations, too. Against claims regarding marketing messaging, product performance, and packaging, he says a lawyer is crucial—“violating state statutes, federal law, or the FCC entails costs, loss of time, and headaches.”

Within the company, lawyers can help build a strong team.

Before business is truly on its way, a group of founders must establish each member’s role, salaries, levels of control or ownership, personal liability, and capital contributions. A lawyer’s oversight of these conversations can protect each member and the entity as a whole, ensuring that contracts are valid and legally binding. Sole proprietorships don’t require registration with the state, but lawyers can still help ensure that personal endeavors are also protected at the very start.

Establishing a hiring process in line with federal and state anti-discrimination laws is crucial at the very start of business, as is an understanding of status, like the legal differences between an “independent contractor” and “employee.” A lawyer’s help with employee contracts and arbitration agreements can simplify a complicated process so you can focus on hiring the best employees for your business.

Lawyers can protect your customers or patients.

One of the first steps in launching a business is creating a web presence. At least sixteen states require website privacy policies as a means to protect private information from customers or patients. This includes basic information like email addresses, and if a transaction is involved on your site, inadequate protections put credit card and other sensitive financial information on the line. One breach could put not just one but all customer’s data and privacy at risk, so owners have a responsibility to ensure their protection—and a lawyer to ensure yours, as well. They can also help navigate laws around privacy policies in the earliest days of your enterprise.

Lawyers can simplify the customer and supplier interactions.

Negotiations with suppliers and partners require proactiveness and strong terms between your business and others—even website or software providers—ensures mutual success. With a lawyer’s help, you can ensure that each contract or buy-sell agreement is comprehensive and binding.

It’s likely cheaper to prepare at the start of business than to fix legal problems as they come.

An entrepreneur can solve some of their own issues, but unless they’ve got a background in law, “they don’t know what they’re doing,” Sussman says. Waiting until a serious legal issue arises—say, a customer sues—will result in a costly scramble without a support system already in place. It’s an investment, but some consider it the cost of doing business for any entrepreneur. Asking around for referrals from others in your field, or those who’ve also started small businesses in your area, is a good idea.

To do so otherwise “would be foolish,” Sussman says. “After all, you wouldn't take out your own appendix, would you?”

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