Entrepreneurs typically enjoy running their business. This is especially true when developing a new product or finding new customers. Unfortunately, there are some other aspects of running a business that are not so glamorous.
Most entrepreneurs would place dealing with lawyers in the latter category because it can be time-consuming, expensive, and there isn’t always an immediate return on their investment. But like it or not, dealing with lawyers is an important part of running — and growing — a business.
Working closely with good lawyers can be a huge benefit to your company because it can minimize the chance of future conflict and litigation. Conversely, failing to work with a lawyer or having a bad lawyer can mean your company’s demise.
Here is a list of things to keep in mind to ensure you get good legal representation while still having the much needed time and resources to put toward doing the stuff you love.
- Don’t be afraid to negotiate fees. Like all small-business owners, lawyers are growing a business and most are willing to be flexible with their fees if asked. If your need is something relatively routine, like incorporating your business or applying for a simple trademark, talk to a couple different lawyers and ask them if they can do this for a flat fee. Then, you can compare fees and decide who is the best lawyer for your need, rather than agreeing to pay the first lawyer you talk to an hourly fee for an undetermined amount of hours.If you are a startup with limited funds, let the lawyer know that money is very tight at the moment and see if they will defer or discount some of your initial legal costs. Many lawyers will work with you and, at worst, they will simply tell you they cannot. If they are unwilling to negotiate, don’t be afraid to look for other options. Price should just be one of many considerations to take into account when finding the right lawyer, but because money is the lifeline of your business, always be cognizant of what a lawyer will cost you.
- Look for lawyers who specialize in the area of your need. Sure it would be nice if one lawyer could handle your corporate formation, your intellectual property, your employment issues, litigation, and all other legal aspects which may arise, but the law is complex and now more than ever, lawyers specialize in certain areas and you should use that to your advantage.Don’t use an intellectual property lawyer to handle your litigation and don’t use your old friend who is a criminal defense lawyer to incorporate your company. A lawyer who has trained in a specific discipline will be able to handle your task with expert efficiency, saving you both time and money.
- Sometimes its better to avoid getting your lawyer involved. I worked in the legal department of a publicly-traded corporation and we were often asked by other departments to fire off a threatening legal letter at the first sign of trouble. This is not usually the best course of action as it can turn your customer or partner into your adversary and reduce the chance of any future business relationship. Involving a lawyer reduces the chances for a quick resolution to any issue because then the other side is likely to get a lawyer involved and both parties are on the defensive rather than cooperating. So whenever possible, exhaust all other conflict resolution avenues before turning to your lawyer.Conversely, with things like incorporation and intellectual property, having a lawyer early on could prevent costly mistakes. Take, for example, Mark Zuckerberg and the mess he has had (and continues to have) over the ownership of Facebook. Things like ownership of your company should be sorted very early on and should be well documented with the help of a good lawyer.Luckily, for Zuckerberg he can spend millions of dollars on lawyers now to sort through it all. But for most smaller businesses, that sort of litigation could spell the end, solely because of legal fees.
As much as you may dread dealing with lawyers, it is a very important part of running a business. Using the strategies above could help control your company’s legal expenses and allow you to spend more time and money growing your business.