Fancy awards, badges, and seals are not indicative of a great lawyer. And awards are not all created equal. Business owners should heed caution when looking at lists of awards on a lawyer’s website. A deeper discussion of these so-called “vanity” or “ego” awards can be found in Part I.

Finding a lawyer for your business does not have to be a daunting task. But where should you look to find a lawyer? What questions should you ask? Consider the following advice when searching for the right lawyer for your business.

 

Where should you start looking?

A great place to start looking for a lawyer is the American Bar Association (“ABA”). The ABA’s website has a great deal of information not only for professionals but also consumers who have legal questions. The ABA specifically has a “Hire a Lawyer” section. On this page, you can find public-service oriented referral services and other tools, such as bar directories, that can help you find a qualified lawyer.

Beyond the ABA’s website, you can search for a lawyer by city and state via a commercial lawyer referral service, such as FindLaw. Similar services are also listed on the ABA’s website.

 

What are the minimal skills your lawyer should have?

Depending on the type of business you have, you may need a lawyer with the following set of foundational skills:

Contracts. You will need a lawyer who is familiar with your business practices and can prepare contracts between your business and clients, suppliers, and customers. You will also need a lawyer to help you respond to contracts that other parties will want you to agree to.

Taxes and licenses. If your business is in the startup phase, you will need a lawyer who knows how to register your business for state and federal identification numbers. Beyond that, you will a lawyer who understands the tax implications of various business transactions that your business will engage in.

Business organizations. Depending on the stage of your business, you may need a lawyer to advise you on what type of business entity to form (e.g., corporation vs. limited liability company (LLC)). This lawyer should be able to discuss the advantages and disadvantages of each entity and to prepare any paperwork associated with formation.

Real estate. If you are leasing a commercial space for your business, the lease is likely complex and drafted to benefit the landlord. A lawyer with some real estate experience should have a standard “tenant’s addendum” that contains provisions to benefit your business. These provisions can be added to the standard “print form” lease document.

Intellectual property. If you have a media, design, or other creative business, a lawyer who has experience with registering products and services for federal trademark and copyright protection will certainly be helpful. Typically, these tasks are performed by lawyers who specialize in intellectual property. If your lawyer specializes in small businesses, then she likely has a working relationship with a lawyer who specializes in intellectual property.

 

What questions do you need to ask potential lawyers?

When interviewing potential lawyers for your business, don’t be afraid to ask direct questions. Here are a few examples of questions to ask:

Are you well-connected in the area? No lawyer can know everything about every area of the law. But a lawyer should be able to find solutions to your legal problems and refer you to lawyers who specialize in certain areas if needed. If your business has specialized legal needs, the right lawyer for your business should either be familiar with that area or have a working relationship with someone who is. This will prevent you from having to find a new lawyer every time you encounter a different legal problem.

Do you have other clients in my industry? The right lawyer will be somewhat familiar with the legal environment of your industry. If not, a lawyer should be willing to learn. One thing to consider is whether the lawyer represents one or more of your competitors. While lawyers must abide by principles such as client confidentiality, you do not want to risk an accidental slip of sensitive information to a competitor.

Are you experienced? It is important to ask direct questions about a lawyer’s experience. For example, if you know that you want to form an LLC, you might want to ask questions about her experience forming and handling other LLCs. 

How do you educate your clients? A lawyer should be willing to tell you what the law says and explain how it affects your business. A lawyer should be a teacher and take the time to educate you and your staff about legal matters directly impacting business operations. The right lawyer might also distribute newsletters or legal reports that describe recent. developments in the law that impact your business.

 

What questions do you need to ask yourself?

After interviewing potential lawyers for your business, you will also need to reflect on the interview and should ask yourself questions when determining if this lawyer is the right one for your business. For example:

Do I like this person? You should be able to communicate openly and freely with your lawyer. Trust your instincts and feelings. If you feel that you cannot trust a certain lawyer, keep looking.

Does this person communicate with me? The right lawyer will not simply tell you what you cannot do but will tell you how to do what it is that you want to do. She will discuss all available options. The right lawyer will tell you what other businesses in your situation normally do.

Is her office conveniently located? While it might be easier to meet with your lawyer remotely, consider whether you would like to meet with your lawyer in person. If so, you likely will need to visit your lawyer often in the first few years of business. Choosing a lawyer relatively close to you or your business might be beneficial to avoid wasting travel time every time you need legal advice.

 

Main Takeaway

While there is no “right” way to find an attorney or “right” question to ask, it is possible to find the right lawyer for your business. Many small businesses wait until a problem has already occurred to hire a lawyer. Don’t be one of them.

 

Sources:

https://www.forbes.com/sites/basharubin/2014/11/14/small-business-expert-how-do-you-find-and-pick-a-lawyer/?sh=31190c8b138a

https://www.americanbar.org/groups/public_education/resources/public-information/how-do-i-find-a-lawyer-/

https://www.entrepreneur.com/article/58326

 

Photo Sources:

https://www.abajournal.com/news/article/jack-rives-hod-speech

https://www.franklaw.us/business-law/

https://www.usnews.com/education/best-graduate-schools/top-law-schools/articles/2016-12-08/choose-the-right-law-school-for-a-corporate-law-career

https://www.mycase.com/blog/twitter-101-lawyers-law-firms/

As a small business owner, you are more likely concerned with sales, managing employees, and cash flow than potential lawsuits. However, many small business owners will face the threat of a lawsuit at some point. And the financial impact can be devastating. A recent study from the U.S. Chamber Institute of Legal Reform revealed that tort liability costs are a “significant drain on…small businesses in particular.”

For many small businesses, which survive on small profit margins, litigation costs are crippling, if not fatal. The effects of litigation can reach far beyond financial loss. An impending lawsuit can—and will—add additional stress onto you and your employees. Sitting in a courtroom will not help you to maintain and grow your business. A lawsuit can also harm your business’s reputation, especially if the case is publicized by a local or national media outlet.

To avoid costly litigation, you should consider the following proactive steps to keep your business out of the courtroom and the headlines.

Hire Experienced Lawyers

Many businesses, including small businesses, will have contracts with third parties and employees. Many legal disputes arise surrounding the interpretation of a contract. Often, litigation can be avoided if an experienced lawyer drafts or reviews those contracts.

Hiring a lawyer can be expensive. But spending $500 or $1,000, for example, to have a lawyer draft or review a contract could help the business avoid a $200,000 lawsuit. Cost is relative. A modest sum of money up front could save a small business an extraordinary sum of money in the future. Consider, too, that something in your business will go wrong—maybe not today but someday. And at that time, a relationship with a lawyer who is willing to help on short notice will likely be necessary.

Put Everything in Writing

Small business owners might have the temptation to verbally agree or shake hands on an agreement. But think again! All contracts should be in writing. As mentioned above, many legal issues arise from interpreting contracts. Putting contracts in writing will help to avoid miscommunications and misunderstandings about goods, services, expectations, and payments.

Additionally, keeping a strong written record is important. Business owners should keep a record of all email correspondence, invoices or other statements, company policies and procedures, among other documents.

Why is keeping a written record so important? Written email correspondence can help decipher exactly what you agreed to. Invoices and other statements reveal when balances are due. Company policies and procedures should also be in writing as they can be used to demonstrate nondiscriminatory employment practices. Putting contracts in writing and keeping a written record are essential to avoid costly litigation.

Develop Clear Workplace Policies for Fair and Consistent Practices

Businesses create workplace policies to provide guidance on how to consistently handle workplace situations and manage expectations. Most policies provide direction for employees. Workplace policies help to distinguish appropriate from inappropriate behavior. They also help to maintain order within the business and ensure that its employees are treated fairly and equally.

Businesses do not need to create policies for every possible unanticipated event. Doing so would limit the ability to address individual situations and employee needs as they arise. But businesses do need policies that provide clear guidelines to ensure legal compliance and fair, equal, and consistent practices within the business. For example, business owners should develop policies to create consistency and fair treatment among employees (e.g., paid time off and benefits eligibility). Business owners may also want to create a policy that addresses appropriate employee behavior or conduct (e.g., attendance policy, code of conduct, and social media policy).

As small business owners, you should not only create clear policies but also communicate those policies with employees. You will also likely need to update and revise those policies over time to address the changing workplace and ensure compliance with the law.

Business owners should consult an experienced lawyer in developing these policies. Creating, communicating, and implementing company policies in a fair and consistent manner will help small businesses to avoid litigation.

Conduct Research on People & Companies Before Doing Business

While not all legal disputes can be prevented, some can. Consider what hiring people who lack integrity, honesty, competence, and professionalism could do to your business. Or what doing business with less than reputable companies could do.

These types of people and companies could harm not only you or your business but also third parties, such as your customers. This exposes you to even more liability.

Prior to entering an employee or business contract, take your time. Request multiple references from potential candidates and take time to call those references. Have conversations in a variety of settings with prospective employees, vendors, distributors, etc. Conduct social media searches.

When you are hiring, you will want to make decisions based on what will be best for your business now and in the future. While you may need to hire someone quickly, do your best to hire the right person or business. This will save you time and energy in the long run. Especially if hiring the wrong person or company results in an impending lawsuit.

Consider Another Cost-Effective Choice: Mediation

Complaints against other employees or management in the company will arise. Having a plan for early resolution can prevent these issues from escalating.

Utilizing mediation—versus litigation—is a way for businesses to avoid the costly litigation process and move right to resolving the dispute. Through this process, a mediator works with both parties to manage communication and identify the parties’ real interests. Mediation is a great alternative to consider. Its beauty is found in its low cost, speed, and confidentiality (discussions cannot later be used in court).

Main Takeaway 

Costly litigation can be avoided. Consider these proactive steps to keep your focus on what is important: your business.

 

SOURCES:

https://instituteforlegalreform.com/wp-content/uploads/2020/10/FINAL-Small-Business-Tort-Costs-10.20.20.pdf

https://www.forbes.com/sites/allbusiness/2019/04/21/cash-flow-challenges-facing-small-business-owners/?sh=661c14136561

https://www.sba.gov/sites/default/files/files/rs265tot.pdf

https://legal.thomsonreuters.com/en/insights/articles/small-business-attorneys-handling-more-litigation-in-house

https://www.wolterskluwer.com/en/expert-insights/workplace-rules-for-business-owners-and-employees

https://www.cohenandmalad.com/tips-for-small-businesses-to-avoid-litigation/

https://cuetolawgroup.com/how-to-protect-your-business-from-lawsuit/

https://www.hsolaw.com/blog/how-to-avoid-litigation

 

PHOTO SOURCES:

https://cornerstoneinsllc.com/is-your-small-business-prepared-to-handle-a-lawsuit/

https://segev.ca/how-to-sign-a-contract/

https://mediatorselect.com/blog/articles/why-you-should-consider-using-mediation-in-your-business/

https://www.dreamstime.com/stock-photo-workplace-policies-flowchart-image17153600