Schneiderman Insurance Agency, Inc. Blog
We as a society have come to view the internet as a one-stop shop for dealing with life’s nagging problems. Websites like Yelp and Amazon allow us to read product reviews, window shop from home, and make shrewd choices as consumers. We expect prices to be lower, quality to be higher, and promises to be kept. And we don’t lightly give second chances when we’re disappointed. For the first time, we the customers are holding all the cards.
This trend echoes throughout our life. We subject every product we consume to a rigorous online examination, from the movies we watch, to the food we eat, to the person we ask out on a date! It’s mostly trivial, of course. One bad meal may ruin our evening (not to mention one bad date), but it’s unlikely to adversely affect our lives in a meaningful way.
But your business isn’t trivial. In fact, your business may be the biggest concern in your life. In many cases, your financial security rests on the success of your company. And the success of your company, in turn, rests partly on your legal footing.
There’s no better way to ensure your company’s legal health than consulting with a professional. So, here are some of the biggest reasons why you should be actively working with a business attorney, whether or not you’re just starting out.
1. The Best Offense is a Good Defense
Well-crafted formation documents, bylaws, contracts, and other agreements protect your personal property from assault by creditors (and your fellow owners) when things go wrong.
Form agreements may provide a basic legal skeleton, but they also assume that your company is identical to any other. Tailored documents, like tailored suits, fit better and make you more confident. They also help repel challenges brought by disgruntled shareholders and officers—problems that are difficult to anticipate and are far more common than we like to believe.
When your business is growing, it’s not just about building an empire. Sometimes it’s about defending what you’ve already built.
2. Prevention is Always Cheaper than Remediation
We know that planning for, and avoiding, stressful contingencies like litigation is important. The problem is, we have found ourselves stuck in the Amazon mindset, where the only real difference between products is price. Prevention costs money now, through careful drafting of bylaws and other complex tasks. Instead, you can find a bare-bones form agreement for pennies somewhere else. So why not just go with the least expensive option?
Think about it this way. What if you were looking for new tires for your car? Would you opt for bald tires in order to save money? What about tires that don’t fit your car’s make and model?
It seems like a stretch. Certainly visiting an online legal self-help service for a $99 LLC formation, or drafting critical documents yourself to save money, isn’t the same as buying new tires to keep your car from shooting sparks on the freeway.
But as long as your company is a major part of your life, avoiding potential pitfalls should be important to you. A lawsuit can be a ruinous event. It ties up capital, creates uncertainty, and adds to your stress in a big way. Hastily drafted documents serve to amplify these problems because they are more susceptible to legal challenge by your adversary. And that’s if you file everything properly! An attorney will be on top of filing deadlines with documents that tie your business together.
3. The Alternatives Offer No Safeguards
You can sometimes take the cheap road in life and end up okay. After all, car tires must still comply with federal regulations which dictate their construction. There’s a floor to the quality you can come to expect.
But discount legal service sites aren’t merely discount law firms. They aren’t law firms at all. In fact, if you were to draw a family tree, the average self-help site would be more closely related to your local Mailboxes Etc. than to the lawyer working next door.
What about drafting your own documents, using a template as a guide? That depends on how comfortable you are with subjects like indemnification, cumulative voting, fiduciary duties, and waiver of corporate formalities. One mistake, and a court may find that you’re a corporation in name only, and that the limited liability you were relying on was just an illusion. Your personal property, not just company assets, may be up for grabs.
So, moment of truth time. Imagine that someone sues you today. Can you confidently rely upon your company’s documents, knowing that an attorney oversaw your business’s operations? If not, how expensive has that $99 discount formation become?
4. The Product is Simply Better
The difference between hiring a business attorney and going it alone isn’t like deciding between regular and premium gasoline. An attorney is there to help you design the car yourself, to your specifications, with roadside assistance, GPS, and regular maintenance‑‑‑all the while making sure what you’re driving is street legal in California. And of course, your attorney will help you apply the brakes well in advance of any hazards.
A good attorney will also do something else no one will: keep you up to date with changes to corporate laws and make sure you’re in compliance with them. That’s not a task that many business owners want to take on themselves.
5. You Can Leave the Stress to Somebody Else
You started your business because you’re passionate about what you do. That passion can quickly dry up when confronted with obligations outside your area of expertise. A good attorney shares your passion for business but comes at it from a different angle. They can keep track of your documents and filings so you don’t have to worry. Just relax and concentrate on what makes your company exciting to you.
Save a Business (Yours): Find a Business Lawyer
So whatever your company’s immediate needs, make sure you have a business attorney in your rolodex. There’s no such thing as a small business to the person who owns it. And that business is worth protecting.
Adam Walker is an attorney based in Los Angeles, California and licensed to do business in the state of California by the California Bar Association. His office is located in Glendale. Adam’s business focus is on transaction matters, corporate formations, mergers and acquisitions and more. You can reach Adam at firstname.lastname@example.org or visit his website at www.fullcirclebl.com