Starting a business requires a lot of things – a great idea, subject matter expertise, capital, and a sound plan to name a few. With 31.7 million small businesses in the U.S., there’s no shortage of entrepreneurial spirit. But beginning a new business often requires legal insight, which most business owners don’t have. Whether a garage startup or a well-funded enterprise, businesses need the guidance your firm can provide to navigate the legal trails ahead.
Forming a new entity
It starts at the beginning: As a company is formed, legal decisions are made regarding its business structure. Deciding among an LLC, a sole proprietorship, or a corporate structure can have immediate and long-term implications on your client’s taxes and liabilities. You can explain the legal obligations and the framework for each type of structure. You can also help register the business (if needed) with any necessary licenses and approvals. As a trusted legal professional, your advice to new business owners can reassure them they are making the right choices for the health of their companies as they grow.
Employees vs independent contractors
A business’s workforce is one of its most critical assets. An important decision for your client is whether to hire employees or use independent contractors. It’s an important legal distinction, and it dictates different legal relationships. The dedication and development of employees are instrumental to growing a business but come with the cost of such things as insurance, retirement plans, paid leaves, travel expenses, etc. Independent contractors don’t qualify for any of these but can cost more upfront in hourly or project fees. Helping your clients choose the best option can put their workforces on the right track.
Contracts
Customer and vendor agreements may be standard fare for you as an attorney, but they can be daunting for a new business owner. Rather than grabbing a boilerplate customer agreement off the internet, your clients can look to you to customize one that fits their needs. Once in place, you can train them how to properly use the agreements and keep them updated according to changes in the business and the law.
Vendor agreements, designed to protect the vendor’s business, can also be intimidating to a business owner. Your review of these documents, and even negotiation of them on your client’s behalf, can provide peace of mind about the risks and potential issues that may arise.
Lawsuits and employee issues
Depending on the function of a business and the industry it’s in, there are a variety of lawsuits your client could potentially face. These could include:
- Labor agreements
- Working hours and conditions
- Hiring and firing decisions
- Workplace injuries
A breach of any of the laws that govern these issues could be a fatal blow to your clients. Bear in mind, workers bringing lawsuits are often represented by practice-area experts, such as injury attorneys, who have deep experience in their fields. Regardless of culpability in an accident, your clients will need your expert counsel to ensure any payout is justified. Your expertise in the complicated field of employment law can be a relief and roadmap for your clients.
Risk management
Starting a business is . . . risky business. According to the U.S. Bureau of Labor Statistics, roughly 50% of small businesses fail in their first five years, and 70% won’t make it past 10 years. You can help mitigate those risks by helping your clients understand and head off possible legal obstacles. Show potential business clients how you’ve helped other businesses with similar risks. While solving legal problems will be an important part of your client-attorney relationship, preventing those problems from happening is even more valuable.
Tax compliance
No one expects business owners to be experts in the complicated world of tax compliance. But that doesn’t mean the government will cut them any slack on tax issues, even if errors are unintentional. Your help in complying with these laws can keep your clients out of both legal and financial hot water. Beyond compliance, your expertise in tax law can guide them on ways to save money through lesser-known provisions of the tax code.
Mergers and acquisitions
Although most small businesses won’t face the prospect of mergers or acquisitions, having a relationship in place with your firm can help if they do arise. Whether they’re exciting or threatening, mergers and acquisitions require detailed planning. Contracts, financial ownership deeds, and legal paperwork can be overwhelming. Your expertise in managing what may seem to be a David-and-Goliath interchange is essential.
In today’s competitive environment, business owners need every advantage to help their entities survive and thrive. Sound legal advice is an investment that can help. They’ll look for a qualified, trusted attorney who’s been there before, so the more you can demonstrate that you have experience with the issues they may face, the more likely you’ll be to land the client. And as their businesses grow, your relationship can grow as well.
Speaking of growth, our latest white paper, “Finding stability and growth for your law firm in a challenging economy” provides opportunities and suggestions on how to implement new approaches at your law firm to drive growth.
