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  • DIY Business Law: When to Hire a Lawyer

    shutterstock_318584849If you’re a small-business owner, you know that your to-do list is generally pretty long on any normal day at the office. It would be safe to assume, as well, that you often find yourself doing a great deal of the heavy lifting personally wherever you can. There’s licenses, incorporation, budgeting, legal paperwork – the list goes on.

    Certainly, you have the option to hire a lawyer to perform many of these tasks, but any business owner knows the importance of saving dollars whenever possible. More dollars equal more money directed toward cash flow, leaving more room for the company to grow.

    The problem is that sometimes this mentality can backfire, and actually cost you more down the road than it would have to originally invest in a good attorney. In short, the dilemma you face is when to know the difference.

    What Can You, as an Aspiring Entrepreneur, Do?

    One trick available to you is organizing your workload. Note which tasks at hand you could handle with little to no extra research, and which ones would require you to read extensively outside the office.

    For example, you may be an expert in sustainability, but not very familiar with specific questions about zoning and environmental laws, which can vary from state to state. It will probably save you time, money and a large headache if you look for experts that are well-versed in this type of commercial business law, rather than try to tackle the entire task alone.

    This mentality can be applied in many other scenarios as well. If you are required to do lengthy reading regarding your business law question, chances are it may be a more efficient use of your time and money to hire an attorney for that specific task. The SBA has a great list of typical legal issues you can handle by yourself, and which ones are better left to a lawyer.

    Here are some things you can handle yourself:

    • Formulate your business plan and name
    • Set up your online domain name and website
    • Form an LLC or partnership
    • Submit the required tax forms to the IRS
    • Apply for your Employer Identification Number (EIN)
    • Hire your employees

    Here’s what you can leave to a lawyer:

    • Issues that could result in employees suing the company, such as discrimination, hiring/firing, sexism, etc.
    • Special allocations
    • Environmental issues
    • Negotiation for sale or acquisition of a company
    • Government – local, state and federal – inquiries

    Taking Preventive Legal Measures

    The above recommendations are given in order to prevent larger issues from occurring in the future. While it’s not possible to predict exactly how the long term with play out, preventive measures in any field, not only law, are what shrewd entrepreneurs master early on in the game to mitigate as much risk and error as possible.

    Among preventive legal measures, HR can be extremely tricky. Enlisting the help of an attorney early on in the hiring process, for example, will help you to avoid major issues that could arise if you encounter a disgruntled employee down the road.

    Let’s say, for instance, you have formulated and executed the entire interview/hiring process, employee handbook development and review procedure for your business without consulting any legal counsel. You then find you must fire an employee who failed their quarterly review. They, in turn, file a lawsuit claiming gender discrimination based on certain questions posed during the review process.

    You are now faced with the long and expensive process of hiring a lawyer to fight a case you may not win. Had you first consulted an attorney when you were in the developmental stages, you would have known what types of review questions conform to federal and state anti-discrimination laws. Hiring competent legal counsel is one of the most important things you can do to protect yourself from various types of lawsuits – something every small-business owner always wants to avoid.

    Learn early that taking the proper steps for preventive legal measures in your business will always be a team effort – one that requires you, your staff and a trusted legal counsel.

    Do What You Can, but Don’t Go It Alone

    That being said, it’s true more people are turning to DIY law – even writing their own wills – rather than enlisting the help of an attorney. Popular sites, like Rocket Lawyer, have served more than a million users since 2012.

    However, just because you can doesn’t mean you should. It’s probably accurate to say these users did not become estate attorney experts overnight. The same applies to matters of business law.

    No matter how many dollars you think you are saving by trying to tackle all the legal issues yourself, it is ill advised to go it completely alone. Every person needs a bit of help every now and then, and when you’re dealing with business and law, hiring help is much better than guessing – which could cost you dearly in the long run.

    Understanding your own limitations will help your company be much safer in the long term. You’ll be prepared from the beginning, rather than playing catchup when a problem occurs.

    Sarah Landrum is a freelance writer and Digital Marketing Specialist. She is also the founder of Punched Clocks, a site dedicated to sharing advice on navigating the work world. Passionate about helping others find happiness and success in their careers, she shares advice on everything from the job search and entrepreneurship to professional development, and more! Follow her for more great tips @SarahLandrum

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