Many businesses try to avoid using a lawyer, and in this day and age with Google for your legal research and LegalZoom or another company for your contracts, a business could be under the impression that they have their ducks in a row. Who needs a lawyer anyways right? However, businesses may not know what they need until its too late. Which brings to mind the old saying from Benjamin Franklin “an ounce of prevention is worth a pound of cure.”
So what are some situations where you absolutely should have a lawyer involved?
Owner and Shareholder Agreements
We will use the example of a partnership, they are simple enough to create. Two people come together with a business idea. Everything is great right now! Why worry about an agreement? They will get around to it eventually, because right now the focus is getting the business off the ground. Fast forward to 6 months or even 6 years into the partnership: you find out that you and your partner fundamentally disagree on an issue, now what? This could have been easily avoided if an attorney had helped you prepare the partnership agreement because expectations would have been discussed and put into the agreement. Some examples of overlooked expectations are 1) How to split profit 2) Is there an exit strategy? i.e. do you want to build the business to a certain point and then sell or do you want to pass the legacy down to your kids? 3) How is the partner who contributed the capital going to be paid back?
A lawyer will help ensure that all parties are the same page which prevents a complete disaster in the future. Partnerships are simple to form, but difficult to split up or disentangle. It is well worth the time and money to sit down with an attorney and have everything written down in the agreement.
Businesses are notorious for going to Google and grabbing a random contract template off the internet and assuming that it fits for their scenario. However, online contracts can be irrelevant to the current situation, difficult to enforce or ambiguous on crucial terms. A poorly written contract can cause huge problems that end up costing the business lots of stress, time and money. On the other hand, hiring a lawyer to write a contract for you may save you thousands of dollars and weeks or months of sleepless nights.
Business owners are savvy, they are able to wear multiple hats to keep their business running. You might be thinking to yourself: I read your article, but that isn’t me. I have done Google and LegalZoom and have had no issues. To which my response is “you haven’t had any issues yet.” Which brings us full circle to where the article started “ounce of prevention is worth a pound of cure”, every single time. One might be surprised what can be accomplished with a 30-minute meeting with an attorney and what that can do for your business.
It’s always good to have a lawyer in your pocket. If you are a business owner and would like to know your options feel free to reach out! firstname.lastname@example.org or 530-520-3109