When to call in the forces: A quick guide to when you need an attorney in your business start-up | Rachel Brenke

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When to call in the forces: A quick guide to when you need an attorney in your business start-up

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When you are starting a business there are a hundred things on your to-do list and seemingly endless expenses. There are business plans to develop, business licenses to obtain, copyrights and trademarks to consider, taxes to research, and on and on. It may seem like the majority of these steps are legal in nature and you might be wondering if you need to contact an attorney for help. Starting a business is already expensive, and hiring attorney can be costly, but it may be well worth it. How can you tell?

How Can an Attorney Help You?

Whether or not you will want to utilize an attorney in starting your business will vastly depend on your specific circumstances, including what your business is, the type of business structure you will use, and your comfort level dealing with things on your own.

Some of the most common ways an attorney can assist you in starting your business include:

  1. Business Set-up (e.g., business structure, permits/licenses, taxes, real estate matters, etc.)
  2. Financing (e.g., obtaining investors, negotiating loan terms, etc.)
  3. Day-to-Day Business Needs (e.g., contracts, negotiation, terms of service, employment matters, etc.)

Just because an attorney can assist you in these matters does not mean you have to hire an attorney for all of them or that all of the above matters will even apply in your case.

When To Use an Attorney

Let’s go over the most basic steps of setting up a business and see where an attorney would be beneficial.

Business and Marketing Plans

These plans are often completed without the assistance of an attorney. If you do plan to seek help from an attorney for certain aspects, it would be helpful to complete your plans prior to meeting with one. By doing so, you will have a clear idea of what business structure you want, have thought of any potential liabilities of your service/product, determined whether you will need a retail space, etc. Making these decisions in advance of contacting an attorney will save you time while meeting with them and thus money!

Business Name and Registration

Registration can be done by incorporating your business, filing a “Doing Business As” (or DBA), or registering a trademark. All methods can be completed without an attorney and generally have instructions on how to accomplish them on your own on the government website. However, if this feels overwhelming then an attorney can certainly assist you.

Incorporation

A business does not need to be incorporated, but depending on your business, it might be beneficial. For example, if you own a tree cutting business and you cut a tree down that falls on a car, you may be found liable for the damages. If you have incorporated your tree cutting business, then the person suing you will only be able to recoup their losses from your business and not your personally held assets (e.g., your home).

If you choose to incorporate, there are a variety of business structures to choose from. An attorney can help you determine which structure would be most beneficial to you and navigate any negotiation that may be needed in forming. The more complex your business structure, the more helpful an attorney will be (think sole proprietor versus a partnership of 4 people.)

Licenses and Permits

Depending on your business, you may need one or a ton of licenses and/or permits. Most jurisdictions at minimum require a business license. In addition, your particular business might require more specific licenses and permits. For example, you will need a medical license to practice medicine and an a food handlers permit to open a restaurant.

Legal Business Documents

An attorney can help you craft legal documents to protect your business. For example, they can craft contracts, service agreements, warranties, warnings, etc. While you can likely find a contract template online somewhere and tailor it to your business, an attorney may be able help you determine which documents you need and tailor them to your specific business.

Tax Considerations

It is possible to determine what taxes are owed and any tax liabilities to be wary of on your own. However, a qualified tax attorney or CPA would probably do a more thorough job and a lot faster. If your business can avoid future IRS issues, it is probably money well spent to seek assistance at the start.

You don’t want to call an attorney for the very first time when you are faced with a lawsuit. A little bit of investment at the start can save you a lot of money and trouble down the road. By utilizing an attorney in some of the above matters, you may save yourself an audit or a liability lawsuit.

Affording an Attorney’s Help

If you read through the above sections and started panicking that you want an attorney’s help but are scared of the cost, there are ways to make it more affordable. Some examples include:

  1. Most attorneys offer a free consult as the first meeting in order to determine whether they can adequately assist you and if you will get along on a personal level. This will help you feel confident in hiring an attorney before you spend any money. Further, you can ask for an estimate during this meeting of the services discussed, so that you won’t be surprised later.
  2. By being prepared with a well thought out business plan and having questions ready before you meet with an attorney, you can save a lot of time and thus a lot of money.
  3. Some attorneys offer flat fees instead of hourly rates for certain business matters, such as incorporation.
  4. Some attorneys offer monthly fees for x amount of hours per month. This will allow you to contact an attorney when you have questions without seeing dollar signs fly by with each minute you are on a call with them.

The determination of when to call an attorney while starting your business is immensely personal and will depend greatly on your circumstances. Remember that a lot of the “grunt work”, like filing, can be done on your own, but it may be worth asking an attorney just what exactly you have to file.

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Hi, I'm Rachel.
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I'm a multi-faceted entrepreneur, business strategist and intellectual property attorney ready to help you start building the life + business you dream of!

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