Starting a business is hard, much harder than most people realize. Approximately 90% of all start-up businesses fail, with 70% failing just within their first five years.
The reasons for their failure are varied. They make poor business decisions or sink their funds into a campaign that goes bunk. Whatever the reason is, there is one thing that likely could have prevented it: hiring a business lawyer.
Business lawyers naturally excel in the realm of corporate strategy and litigation. They don’t just help big companies survive lawsuits. They are skilled at overseeing high-level management and structural decisions—along with related legal repercussions.
Read on as we discuss the situations where you may benefit most from a business lawyer.
Hire a Business Lawyer for Restructuring
The business structure of your organization is likely to change as time goes on. This is a loose term that refers to everything from management organization to stake and ownership.
A start-up may begin with cofounders and a small team. As its market share increases and business grows, it requires reorganization to continue functioning.
Legal Risks in Restructuring
Restructuring can be a messy process. Inevitably, somebody will be climbing the totem pole, and someone will be demoted. It doesn’t take much imagination to predict what legal issues may arise.
A lawyer can help navigate these tricky waters and reach a favorable outcome. They can anticipate pitfalls that may be along the way. Most importantly, they can warn you when a particular decision is a no-no.
For Ownership Changes
Following the previous point, ownership often changes over time. Co-founders may decide they are not cut out for this type of business. They may withdraw from management, or sell their shares.
Take for example Tesla. This began as a joint business between two electric car enthusiasts. Eventually, Elon Musk appeared on the scene and bought them out.
Invariably, Mr. Musk had some law solicitors in his retinue. If he didn’t, he’d be setting himself up for an uphill battle to claim his stake.
These changes in the regency all have their basis in contracts. To transfer power, the stipulations of that contract must be met or rewritten. Naturally, a business attorney excels in re-drawing contracts.
For New Contracts
Contracts extend far beyond establishing who owns what part of a company. They include trade agreements and co-operated ventures with other businesses. These also include lucrative government contracts for R&D and development purposes.
Contracts are the bedrock of every business. A poorly written contract is a legal time bomb waiting to blow. Having a skilled lawyer on your side when forming a business ensures your contracts are legally sound.
Handling Big Contracts
Of course, you don’t need to have your lawyer come in for every sultry contract. The day workers can usually handle that. The concern is when you are about to sign a big deal or loan.
The main issue is that legal documents, especially contracts, are incredibly dense. They make no effort to be comprehensible to the average person. Forming a business with a lawyer to guide you prevents legal hiccups.
For Employee Issues
Employees are often one of the biggest legal risks for a business. For example, when an employee files a labor dispute with your business. Whether or not their case is compelling, it could cost your company big money in business litigation.
Lawyers do their best when handling these disputes between employees and employers. Particularly if it deals with a sensitive issue. Discrimination lawsuits, for example, lend themselves to a lot of complications.
Legal Counsel
A lawyer can work as counsel for employees. They can “talk them off a cliff” if they are on the verge of a risky decision. Further, they can advise employees who have broken the law—or who may yet have broken it.
Last but not least, they serve as a position of legal advisement. If your business is flirting with a potential lawsuit, a lawyer can warn you away from the edge. Their advice can and should guide your actions going forward.
For Staying Compliant
Legal regulations that affect your industry are not something you should ignore. Every year, hundreds of businesses get hit with tough penalties. Especially when it concerns user privacy infractions.
The main issue with these infractions is a lack of foresight. In 99% of cases, a business did not consult a lawyer when tackling these difficult subjects. Similar to the previous point, legal aid keeps you on your toes concerning potential future issues.
Handling Regulations
Regulations are some of the most complex legislation around. There are federal regulations, state regulations, and local municipal regulations, too. Large businesses such as Amazon and Apple often hire big legal teams to deal with regulations exclusively.
Non-compliance isn’t just expensive when you go to court. It results in lost profit and wasted time. Rebuilding your business to make it compliant also adds to the cost.
A lawyer is a godsend for anything related to compliance.
For Sale or Acquisition
Eventually, the day may come when you decide to sell your company or let a larger entity acquire it. This is an excellent way to secure an investment or relieve yourself of duty. But it has the same issue with contracts: you may not realize what you are signing up for.
We gave the example of Elon Musk earlier on. Sales and acquisitions involve the same sort of legal headache, except from your perspective. When giving up your company, you need to be wary of predatory buyers and legal loopholes.
Tricky Legislation
For example, a lawyer may be able to spot a phantom clause that you are unaware of. They can spot the potential for exploitation. Certain phrasing could deprive you of your stake and influence in the future.
Whatever the case, bring a lawyer along when you begin negotiations. Whether it’s business immigration or consolidation, they can help.
Find a Business Lawyer Today
Business lawyer often does not get enough credit for how important they are to a company. They tackle legal disputes, contracts, transfers of ownership, and so much more. Consult them for all of your major decisions.
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