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When to Hire a Lawyer for Business Matters (and when to Do it Yourself)!

by Caron_Beesley, Community Moderator

  • Created: January 25, 2012, 9:15 am
  • Updated: April 30, 2012, 6:59 pm
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13 comments

Ever wonder if you need to get a lawyer involved in a business matter?

A lawyer can help in many business scenarios, from helping with the incorporation process, drawing up contracts and, if necessary, representing you in litigation. But is a lawyer always necessary or are there times when you are better off saving the big bucks and navigating legal processes on your own?

Here are some guidelines to help you know which legal business issues you can probably handle independently and when it’s really time to retain a lawyer.

Legal Issues You Can Handle on Your Own

This is not an exhaustive list, but it covers items you can probably take care of on your own, and government resources that can help. Each business is unique, and an initial consultation with a lawyer can help you determine the complexity of your own needs and how to proceed on many of these issues.

1. Naming your business and claiming a trademark – The process of naming a business isn’t as simple as just picking a name and running with it. If you choose any name other than your own, you’ll need to file a “Doing Business As” Name. This guide explains how to: Register your Fictitious or “Doing Business As” Name. You should also check to see whether your choice for a URL (domain name) has been claimed already. You can do this on your own by searching the public WHOIS databaseof domain names.  Once you have a unique domain name, follow these steps to claim it. 

You can also search for and claim a trademark on your own. Use the U.S. Patent and Trademark Office’s trademark search tool to see if a similar name, or a variation of it, is trademarked. You can even claim a trademark yourself online. This blog explains how: Protect your Invention or Product - Patents, Trademarks, and Copyright Explained.

2. Legal structure for your business – Entering into a partnership agreement or forming an LLC can be done without legal assistance - although it's wise to consult an attorney about the ramifications to your individual business. You can also use the services of an online broker such as LegalZoom, MyCorporation, or The Company Corporation. These guides explain what you need to do:

3. Filing and registering the paperwork to start a business – Most of the legal steps involved in starting a business can be handled without the help of a lawyer. This includes applying for the right licenses and permits, registering your business for tax purposes, and applying for an Employer Identification Number (EIN). This step-by-step guide from SBA.gov explains what you need to do.

4. Creating contracts and non-disclosure agreements (NDA) – Customer contracts, partner or vendor agreements, and NDAs can all be prepared without the assistance of a lawyer. These blogs explain how:

5. Creating buy-sell agreements – If you are in a business partnership or an LLC with multiple owners, you’ll need a buy-sell agreement in place to protect you, in case a co-owner dies or wants to transfer ownership. Read more in: Buy-Sell Agreements – Does my Business Really Need One?

Other aspects of business ownership that can be handled without a lawyer include hiring employees or, independent contractors.

When it’s Time to Retain a Lawyer

While a lawyer and eager online brokers will be willing to help you with any of the items listed above, you'll need an attorney for more complex issues.  These can include:

1. Forming a corporation - While you can often take care of the formation of a legal business entity such as an LLC or business partnership without legal help, forming a corporation with shareholders and a board is a more complex process. Articles of incorporation can be filed without lawyers, but the administrative side of managing the complex tax and legal requirements often requires the services of a corporate attorney.

2. Filing a Patent - Patents are expensive and time consuming. It can take years to get one approved.  That’s why so often see “patent pending” messaging in the marketplace. So unless you are in the pharmaceutical or biotech industries, consider whether patenting your product actually gives you a major market advantage. Consult a patent attorney to help you evaluate your product and understand what rights you will achieve.

3. Litigation – This can include dealing with lawsuits by current or former employees or customers, discrimination or harassment lawsuits, environmental lawsuits, government investigations for legal violations, etc.

4. Buying or Selling a Business – Lawyers can help with negotiating sales agreements, lease agreements, and more.

Still have questions? Post them in the SBA Community Discussion Boards and be sure to subscribe to the Business Law Advisor blog.

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About the Author

Caron_Beesley's Profile Picture
Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed.
Tags: Community Blogs, Business Law Advisor

Comments

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regipro | Window Shopper | 2/26/2012 - 5:36 am

Knowing when to get a lawyer involved can be a real competitive advantage for a small business. I'd add that many lawyers offer a free consultation (they're trying to build their businesses, too), regards.registro propiedad
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Nagelstudio Hamburg | Window Shopper | 2/22/2012 - 10:26 am

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Nagelstudio Hamburg | Window Shopper | 2/20/2012 - 5:39 pm

They most likely will not understand Nagelstudio Hamburg the ins and outs of doing an adequate trademark search prior to registering their trademark Nagelstudio Hamburg(and may just be throwing their money away if they do so), and most will NOT Nagelstudio Harburg be adequately protected if they write their own contracts, especially a buy/sell agreement. Forms downloaded off the Internet are woefully inadequate in most cases (as are many trademark searches). Most folks will not know what to watch out for down the road, to ensure their own protection.

hsmstyle | Window Shopper | 2/13/2012 - 9:23 pm

This comment was removed from public view (Sock puppet account). Please review the Community Rules of Conduct for more information.

hsmstyle | Window Shopper | 2/13/2012 - 9:22 pm

This comment was removed from public view (Sock puppet account). Please review the Community Rules of Conduct for more information.

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binaya1412 | Window Shopper | 2/7/2012 - 2:17 am

Awesome caron ! However, its tough to hire a lawyer for small business as lawyers charge very high rates. :( lets say, i run web business and its not affordable for me to hire a lawyer at the moment. I was really inspired by the post so i will be hiring lawyer after couple years when i earn bigger .. Regards Ek Tha Tiger

gmalpiede | Window Shopper | 2/3/2012 - 12:04 pm

Thank you! Advice like that keeps me in business! I am a business attorney, and the vast majority of my clients are folks who, at some point, agreed with what is being said here, and have taken legal matters into their own hands. Then, after things have gone South, they come to me wanting me to "fix" it. Just like a watch, if you take the watch apart, it will take the watch repairman 10X as long to fix it. Especially if a piece is missing. It takes a lot more time, and a LOT more money. Same thing here. Often however, with legal matters, if a piece is missing, from your contract, for example, there IS no "fix". While I wholeheartedly agree that most folks  with even a little business experience can handle many simple matters (name their business, file for an EIN and business licenses, and other basics), they may not fully understand the legal implications of many more complex issues, for example, the tax implications of each type of legal structure (LLC vs Corp vs Partnership). They most likely will not understand the ins and outs of doing an adequate trademark search prior to registering their trademark (and may just be throwing their money away if they do so), and most will NOT be adequately protected if they write their own contracts, especially a buy/sell agreement. Forms downloaded off the Internet are woefully inadequate in most cases (as are many trademark searches). Most folks will not know what to watch out for down the road, to ensure their own protection. True, some contracts are very simple, no big deal, but ask your attorney. He will normally tell you so, IF you ask. But most business contracts are generally more complex, and for good reason, they should protect you, your business, AND your hard-earned investment, for the duration of the contract itself, and beyond. Do-it-your-selfers often make mistakes, and I've seen way too many of them not to say anything (and believe me, I wish it were otherwise). This, in fact, is what prompted me to comment on this article (which I would not normally do). I could not, in good conscience, avoid it. My advice to those reading this article is that the cost of a good (honest) attorney up front is a very wise investment. It's and investment in your business and in your future. (Better to cry once than cry twice; penny wise, pound foolish, and so on.) 'Nuff said. Glenn D. Malpiede, Esq. - Estes Legal Services, LLC.

California Lemon Lawyer | Window Shopper | 2/1/2012 - 9:13 pm

The post lists "litigation" as an instance where a business is wise to get an attorney. While this is true, I would also add that in many cases businesses would be wise to get an attorney other than their business and transactional attorney to represent them in litigation. The reason for this is that in many cases the litigation will arise because of errors (or perceived errors) made by your business and transactional attorney. Since this person has an incentive to avoid admitting to you that he or she made a mistake, you may not get honest, unbiased advice about your potential liability in litigation. I am California lemon law attorney in San Diego, CA, and I run into this situaiton all the time. A business get mired in a long, drawn-out lawsuit when it should have settled early all because its attorney doesn't want to admit that he or she made a mistake.
CA Lemon Law Lawyer
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