Consulting with a business attorney is one of the best things you can do to help your company succeed. By making sure your small business is on a solid legal footing, you can avoid some potentially costly mistakes and focus your energy on growth.
However, not every business attorney is well equipped to deal with the challenges that face small businesses and startups. Your company needs an experienced small business lawyer who is familiar with local laws to help you make informed decisions and avoid excessive legal issues.
Do small businesses need a business attorney ?
Every small business owner should have a go-to lawyer they can consult on a variety of issues. You will need a business attorney more at some times than others, but it’s always wise to have someone you can call when you need someone to review a contract or a major issue arises.
It’s especially important for small businesses to consult a lawyer early on as they set up their operations. A good business attorney will give you vital copyright and trademark advice, help you with zoning compliance, help you incorporate your business, and advise you on how to avoid potential lawsuits and liability.
Don’t wait until someone sues your business to hire a business attorney! An ounce of prevention is worth a pound of cure. Consulting a lawyer early on is far less expensive than paying court costs, attorneys’ fees, settlements, and other expenses to resolve a legal dispute that could have been prevented.
What does a small business attorney do?
Business attorneys can help you make more informed legal decisions in just about every business situation that involves contracts, licensing, or intellectual property. Here are just a few issues where your company can benefit from a business lawyer’s advice:
- Contracts. A small business attorney can help you prepare the standard form contracts you will use for clients and suppliers so you don’t have to worry about excessive liability or other avoidable legal concerns.
- Hiring. There are a wide variety of laws that affect hiring and firing practices, and different considerations when hiring employees vs. independent contractors. You would be wise to consult with a business attorney before you begin the interview process so you can avoid mistakes that could lead to a lawsuit.
- Licensing. You will most likely need to register your business for federal and state tax identification numbers. A small business attorney can help you do that.
- Tax advice. While an accountant should be the one to prepare and file your business tax returns, a business lawyer can advise you on the tax consequences of many of your basic business transactions and help you save money.
- Intellectual property. Most small business lawyers have a close working relationship with an intellectual property specialist and can help you register your products or services for trademark and copyright protection.
- Real estate and zoning laws. Most commercial property leases are highly complex and drafted to benefit the landlord. Before you sign a lease, it’s a good idea to negotiate with the landlord to add a “tenant’s addendum” with provisions that benefit you. A small business attorney will be able to help with that.
- Preparing for government investigations. If you think a government entity could investigate your business in the future, you may wish to contact your business attorney in advance to help you catch and correct any issues and avoid potential fines.
- Business organization. A small business attorney can help you make an informed decision about which legal structure to choose for your business — more on that below.
Choosing a Legal Structure for Your Small Business
If you are just setting up your business, you will need to form a legal entity for it such as an LLC or corporation, often with assistance from a business lawyer. The most common types of business structures include:
Many businesses start as sole proprietorships or general partnerships, which are relatively simple and flexible. In Washington State, these types of businesses do not need to register with the Washington Secretary of State. However, this business structure leaves the sole proprietor or partner personally liable for any debts or legal liability their business might face, so you shouldn’t automatically assume it is the best option for your small business.
Limited Liability Company (LLC)
An LLC can have one or multiple owners. It is governed by an operating agreement that sets out the specific agreement of the members and establishes procedures for future business decisions. If you choose to set up an LLC, you may want to hire a small business attorney to help you file with the state government and draft your operating agreement.
Limited Partnership (LP)
A limited partnership has two different classes of partners: general partners and limited partners. General partners have more control of the company and unlimited liability for the company’s debts, while limited partners have less control of the company and are not liable. An LP is not the best structure for most companies but sometimes makes sense if a partner is putting in significant capital without a role in managing the company.
Limited Liability Partnership (LLP)
An LLP allows partners to share management of the company at the same level. The partners will not be personally liable for any debt under most circumstances, making it an excellent option for many professional firms.
Small businesses with a small number of shareholders often form closely held corporations. A business attorney can advise on whether forming a corporation makes sense in your situation.
Compliance with Lesser-Known and Complicated Laws
Few business owners have the time to research every single law that may affect their business, but ignorance is no excuse for breaking the law. One of the easiest ways to avoid accidentally breaking the law or becoming trapped in a difficult legal situation is to consult with a knowledgeable local business attorney before making any major business decisions.
Being in contact with a business attorney can also help you stay on top of legal changes that may affect your business. Many business lawyers send out newsletters or similar communications whenever there are major legal changes that could affect their community.
Protecting Intellectual Property
Many small businesses have products or services that should be registered for federal trademark and copyright protection. This is especially important for businesses in the media, design, or other creative industries.
How much does a small business lawyer cost?
Small business lawyers’ rates and fees can vary quite a bit. A junior lawyer at a small firm may charge $100 per hour, while a senior partner at a large firm in a major city may charge well over $1,000 per hour. There may be additional fees to cover on top of these hourly rates.
Be sure to ask any business attorney you are considering how their cost structure works before hiring them so you can be prepared for these expenses.
How do I find a good small business attorney?
The best small business attorneys are not always the best attorneys for major corporations. If you need someone to provide long-term legal counsel for your business, look for a lawyer with the following attributes:
- Broad expertise in business law, both federal and local
- A working knowledge of your business niche
- Good communication and teaching skills
- A wide professional network that will enable them to refer you to specialists as needed
- Plenty of legal experience with small businesses
For most small businesses, it’s a good idea to choose a local business attorney rather than someone across the state or country. Local attorneys are more familiar with local laws and less likely to need to travel, which means fewer expenses for you.
It’s also important to consider the size of the law firm. Larger law firms have more legal skills under one roof but typically charge higher hourly rates. Most small businesses would do well to choose a business attorney at a small-to-medium-sized law firm that combines some specialized skills with relatively affordable rates.
Business Attorneys in Washington State
The Anderson Hunter Law Firm has been providing legal services in Snohomish County for over 100 years. Our experienced business lawyers provide general legal counsel for a wide range of businesses in areas like entity formation, business acquisitions, reorganizations, antitrust, and profit sharing. Contact us today to get in touch with a highly qualified business attorney in Everett, WA.