Starting and operating a business is no simple feat. From the moment you become a business owner you are required to navigate a wide-ranging series of confusing and ever-changing legal and regulatory hurdles.
For start-ups in particular, keeping your legal butt covered, so to speak, is essential to reducing the risk of your venture, especially when outside financing is involved. And while a lawyer will always be willing to help — it can get costly.
So what aspects of business law can you take care of yourself, and when should you turn to a lawyer for help? Here’s some guidance on how you can navigate many of the legal needs of your start-up with a variety of self-service tools, and when you really should turn to a lawyer.
Legalities You can Take Care of without a Lawyer
There are many aspects of business law that can be understood and managed without the use of a lawyer. Differing businesses and industries have different needs, but there are many fundamentals that apply to all.
First, the actual process of starting a business requires that you follow a series of legal steps. These steps apply to all industries and all types of business owners – whether you are a freelancer, a home-based business owner, a sole proprietor or a business partner.
These steps, which include checklist items such as registering your business and getting the right licenses or permits, are outlined by Business.gov in this useful guide – 10 Steps to Starting a Business.
In its Business Law Guide (which is refreshingly free of confusing legalease), Business.gov also provides step-by-step information about structuring your business (a process which can be done by many businesses without the help of a lawyer); hiring your first employee; doing business online; complying with tax laws, and more.
When to Turn to a Lawyer
As in domestic life, the key to understanding when you need a lawyer and how much you are willing to invest in them depends on your particular circumstance. For example, if you are a biotech or other R&D start-up who can make money by exploiting its patents, then you will need the retained counsel of a lawyer who specializes in intellectual property.
Here are some other examples of how a start-up may benefit from using a lawyer:
1. Corporate Matters — While you can often take care of the formation of a legal business entity such as an LLC or business partnership without legal help, forming a corporation with shareholders and a board, is a more complex process. Yes, you can file your articles without lawyers, but the administrative side of managing the complex tax and legal requirements often requires the services of a corporate attorney or lawyer. Likewise, if you are setting up a business partnership, a lawyer can ensure you cover all eventualities – should the partnership ever get nasty.
2. Protecting Intellectual Property — Patents are expensive and time-consuming. It can take years to get a patent approved (as witnessed by all the “patent pending” messaging in the market place). So unless you are a pharma or biotech, consider whether patenting your product will give you a major market advantage. Consult a patent counsel to help you evaluate your product and understand what rights you will achieve.
A lawyer can also help when it comes to protecting your brand, logo and other business assets with trademarks. While the trademarking is a lot cheaper than getting a patent, you may still need legal help along the way.
In “Trademarks: Legal, Financial, and Tax Points You Need to Know”, small business author, Barbara Weltman, offers the following advice: “You can do some or all of the work required to register your trademark. However, because of the importance of a trademark to your business, it’s usually wise to work with an attorney through the registration process. You can, however, minimize your costs by doing some of the legwork yourself.”
3. Miscellaneous Legal Needs — There are many legal issues or “unknowns” that arise for start-ups. Whether you need a helping hand with employment law, confidentiality and contractor agreements, commercial leases, and so on – having a trusted general corporate lawyer on hand can help.
Finding the Right Lawyer
Rather than turn to the phone book or a Google search, here are some valuable tips for making sure you find a business lawyer who meets your needs and price point: “Need a Lawyer? How to Find Legal Representation for Your Small Business”.
Small Business Matters is brought to you by Business.gov to provide helpful and easy-to-understand tips for small and home businesses, including direct links to resources that help business owners to navigate the government maze. Business.gov is sponsored by the U.S. Small Business Administration to provide small business owners with access to federal, state and local government resources from a single access point. Business.gov creates a dialogue among business owners and the organizations serving them, making government resources and information more accessible to the nation’s small business community. The U.S. Government and the U.S. Small Business Administration neither endorses nor guarantees in any way the external organizations, services, advice, or products included in any external website links. Furthermore, the U.S. government neither controls nor guarantees the accuracy, relevance, timeliness or completeness of the information contained in non-government website links.
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