IMPORTANCE OF CHOOSING AND MANAGING A LEGAL COUNSEL IN BUSINESS
Almost all companies need and use the services of attorneys, and entrepreneurial ventures perhaps more than most. It may be necessary for entrepreneurs to possess extensive knowledge of the law in addition to selecting good attorneys. Various authors have described the importance of choosing and managing legal counsel. By following some legal basics and acquiring appropriate legal services, companies can achieve better legal health, including fewer problems and lower costs over the long term.
The factors to consider in choosing an attorney include availability, comfort level with the attorney, experience level and appropriateness to the case, cost, and whatever the lawyer knows the industry and has connections to investors and venture capital. Just how attorneys are used by entrepreneurial ventures depends on the needs of the venture at its particular stage.
Size is also a factor. As company size increases, so does the need for advice in such areas as liability, mergers, and benefit plans. Contracts and agreements were almost uniformly the predominant use, regardless of the venture’s size.
Entrepreneurs will most likely need to get assistance in the following areas of the law:
Issues such as the forgivable and non-forgivable liabilities of the founder, officers, and directors or the form of organization chosen for a new venture are important. As tax laws and other circumstances change, they are important for more established firms as well.
Franchising and licensing
Innumerable issues concerning further rights, obligations, and what happens in the event of nonperformance by either a franchisee or lessee or a franchisor or lessor require specialized legal advice.
Contracts and agreement
Firms need assistance with contracts, licenses, leases, and other such agreements as non-compete employment agreements and those governing the vesting rights of shareholders.
Formal litigation, liability protection, and so on
In today’s litigious climate, sooner or later most entrepreneurs will find themselves as defendants in lawsuits and require counsel.
Real estate, insurance, and other matters
It is hard yo imagine an entrepreneur who, at one time or the other, will not be involved in various kinds of real estate transactions, from rentals to purchase and sale of the property, that require the services of an attorney.
Copyrights, trademarks. Patents, and intellectual property protection
Products are hard to protect, but pushing ahead with product development before ample protection from the law is provided can be expedient in the short term but disastrous in the long term.
Benefit and stock ownership plans have become complicated to use effectively and to administer. They require the special know-how of lawyers to avoid common pitfalls.
Tax planning and review
Too frequently, the tail of the accountant’s tax avoidance advice wags the dog of good business sense. Entrepreneurs who worry much about finding good opportunities to make money, rather than tax shelters, are infinitely better off.
Federal, state, and other regulations and reports
Understanding the impact of and complying with regulations often is not easy. Violators of federal, state and other regulations often can have serious consequences.
Mergers and acquisitions
Specialized legal knowledge is required when buying or selling a company. Unless the entrepreneur is highly experienced and has highly qualified legal advisors in these transactions, he or she can either lose the deal or end up having to live with legal obligations that can be costly.
Many people have heard tales of entrepreneurs who did not make deposits to pay various federal and state taxes in order to use that cash in their business. These entrepreneurs falsely assumed that if the companies went bankrupt, the government was out of luck, just like the banks and other creditors. They were wrong. The owners, officers, and often the directors are held personally liable for those obligations.
These matters can range from assistance with collecting delinquent accounts to labour relations.
As entrepreneurs accumulate net worth, (i.e., property and other assets), legal advice in the estate, tax, and financial planning is important.