I get asked this question all the time. Mostly this question comes from people I meet who own and operate a small business and have always done things for themselves. The business may have some employees, own some assets, and is quite profitable. When I talk to them, I always hear “I don’t really have any legal problems, why do I need a lawyer? Business is good and my employees love me.” Well, when I hear this, I know what I’m getting myself into.
The first thing I ask these people is: how is your business structured? LLC? Corporation? Once we determine that answer, the next questions are: Do you have an operating agreement if you’re an LLC or bylaws if you’re a corporation? Do you have annual meeting minutes? Seven out of ten times people answer “no” to these questions. That is why they need a business attorney. If they are not following corporate formalities and organizational protocols and someone would sue the company, the chance of that plaintiff piercing the corporate veil and attacking the owner’s personal assets increases exponentially.
Another question I ask is: do you have written contracts for the work you do and the businesses you are involved in? About 4 in 10 say no. Once again, this is why you need a business attorney. The handshake agreement does not work in today’s society. Everything must be in writing, not because you can’t trust anyone, it’s because you need to protect your rights. If they don’t have contracts that they use or have written them themselves, you can bet they’ll spend unbelievable amounts of money to resolve disputes that could have been avoided by working with a business attorney in the first place.
Finally, I often ask them if they understand the various federal and state labor laws that govern the employer-employee relationship. Most respond with “Pennsylvania is an at-will employee and I can fire anyone at any time.” This is what I call a time bomb. Yes, it is true that Pennsylvania recognizes employment at will; however, there are several laws that provide protection for employees against discrimination, unfair treatment, unfair wages, etc. Most of the time, these business owners have no idea what they don’t know and end up doing something that costs them tens or thousands of dollars to solve. That is why they need a business attorney.
So, as you can see, there are many reasons to work with a business attorney when you own a business from the start. People incorrectly assume that the only time they will need a lawyer is if they are sued. However, a good business attorney will help you run your business in a way that limits the reasons you could be sued at a fraction of the cost it will cost to litigate and resolve a dispute in the future.