Between securing funding, creating a solid business plan, and enlisting the right team, entrepreneurs have a major to-do list on their hands. Therefore, it isn’t all that surprising that 41% say that managing their business is their number one stressor — even above raising kids, according to a 2017 Bank of America survey.
Handling the legal responsibilities of starting a new business is a particularly daunting (not to mention time-consuming) task. And unless you have a law degree, handling these things yourself could cause more harm than good.
Relinquishing control might be tough, but the right attorney can provide vital assistance in every aspect of your business — and stave off potential pitfalls later down the road. Here’s why every entrepreneur should consider consulting with a lawyer when starting a business.
They Minimize Risk
There are nearly 32 million small businesses in the U.S., all of which need the foresight to spot potential lawsuits and sidestep them before they escalate. Though your human resources department (if you have one) is designed to keep potentially hairy legal situations at bay, it’s still possible for things to fall through the cracks.
Business lawsuits generally come from two different directions: employees and customers. Employees tend to sue their employers over poor treatment, the circumstances around their termination, or the company not following its own policies. Meanwhile, a customer could sue your business for any number of reasons, from discrimination to a personal injury suffered on your premises.
An experienced business attorney can help predict these types of issues and put systems in place to prevent a costly legal situation. It’s all about protecting yourself, both professionally and personally.
They Help You Structure Your Business
Between April 2020 and April 2021, the number of business applications grew in every state except Alaska. Each of those entrepreneurs will need to determine the best way to structure their new business.
A lawyer who specializes in LLCs or other business entities can demystify the process and jump through all the required hoops that go hand-in-hand with incorporating your business. Incorporating comes with many benefits, like limiting personal liability, opening the door to potential tax breaks, and legitimizing your company within the business world, according to LegalZoom.
Doing it on your own could translate to a great deal of work on your end. You’ll have to draft your articles of incorporation, select a board of directors, create bylaws, obtain an employer identification number from the IRS, and possibly file a business license within your state. Unless you’re particularly adept at this sort of thing, incorporating your business without the help of an attorney may feel like a very big undertaking.
They Can Sort Out Trademarks, Copyright, and Zoning Laws
Zoning laws vary from location to location — what you’re legally allowed to do on one piece of land may be different from another in the same area. And after you settle on a location, you’ll also have to think about specific building regulations.
Once you’re up and running, you’ll want to protect your intellectual property so that it isn’t used by others without your consent. Enter trademarks and copyrights. As simple as it sounds, registering for these things means paying fees, filling out the required forms, and submitting them to the appropriate entities. Business attorneys can prevent zoning headaches and manage trademarks and copyrights on your behalf so that you can focus on running your business.
They Free Up Time To Focus on Growing Your Business
When it comes to time, most business owners don’t have much to spare. Delegating tasks that are either time-intensive or out of your wheelhouse (or both) frees up time and mental energy that you can redirect toward growing your business.
Having the wrong team in place is no small issue. According to a CB Insights analysis, it’s among the top reasons startups fail. Consulting a lawyer in the early stages could ultimately position your business for success — and keep you from spreading yourself too thin.
You’ll Have Someone You Trust in Your Corner
In some ways, starting a business is like having a baby — the beginning is marked by intense devotion, sleepless nights, and, at times, an inability to think about anything else. But once your business is operational and running smoothly, that doesn’t mean your legal aid needs come to an end. In fact, that same CB Insights analysis also found that legal issues are another driving force behind many failed startups.
Connecting early on with an attorney who’s a good fit is something that will help protect your business over the long haul. At the end of the day, having someone you trust in your corner is invaluable. This is especially true if, at some point down the line, you encounter a legal situation that threatens to kneecap your business. Aside from lawsuits, having strong legal counsel at the ready can prevent hiccups so that you can dedicate 100% of your efforts to business innovation — and isn’t that what entrepreneurship is all about?