Entrepreneur Beginners Guide
“Hire a Good Lawyer”
A good business attorney will provide vital assistance in almost every aspect of your business.
—Cliff Ennico, author, The Small Business Survival Guide
If you’ve been in business long enough-, sooner or later you will need sound legal advice from an attorney. Yes, you can use an Internet legal services firm, but you’ll eventually need face-to-face counsel. Here are three common uses for legal services among start-ups and a few real-life examples of how an attorney helped my company.
First, when you are ready to start your business, an attorney will recommend a. legal entity that is best for you. Do you set up a sole proprietorship, a C corporation, an S corporation, a limited liability company, or a limited liability partnership? Which is best?
When I started my company years ago, an attorney gave me wise advice. He suggested that I consider the long-term implications and flexibility of the legal entity I chose. He recommended that I select the entity that best fit my long-term vision for the company. A sole proprietorship, for instance, would not be the best option for a founder who plans to sell shares in the future. Of course, I could change classifications, but an extra cost is involved. Ideally, select the best option in the beginning and keep it.
Although you can find plenty of information online about different business classifications, discuss your specific situation with an attorney who can assess your needs and ultimately help you make the right decision. Second, en attorney helps you protect your intellectual property (IP). There is a good reason you cannot take The Coca-Cola Company’s name and logo and use it to sell a beverage product—or any product for that matter. Not only is such behavior unscrupulous, it is also illegal. Specifically, it violates U.S. trademark law. In the same way that The Coca-Cola Company needs to protect its intellectual property, you want to protect yours. Intellectual property, defined generally as creations of the mind, includes mainly patents, copyrights, and trademarks.
Protecting my company’s IP has saved me from costly litigation and frustration. Because of the popularity of my company’s brands, we have had to deal with many impostors who try to capitalize on our success by stealing our IP. The perpetrators have ranged from publicly traded companies to careless individuals. For example, one company literally used our trademark to produce an event by the same exact name in the same city as our headquarters. My attorney promptly advised me to send the company a cease-and-desist letter, demanding that the company immediately stop using our trademark or it would risk litigation. The company complied with our request. Had we not the proper legal advice and proof of ownership of the trademark, we would have had much less recourse.
If you believe in the value of your products and services, protect your IP from the very start, no matter the cost. Many start-ups fail to protect their IP because of the relatively high cost. Cutting corners now costs more later. In particular, you could be forced to change your product’s branding, restricted to sell in specific regions, or ordered to pay damages to someone suing you for abusing their own IP.
Third, an attorney reviews the legal documents your company creates and receives from others to ensure that your interests are protected. These documents may include contracts, agreements, and insurance policies. As mentioned earlier, my attorney recently reviewed correspondence with companies that had infringed on our trademarks.
Her insight and guidance were crucial to a quick .and- favorable result in the matters.
By the way, many generic contracts can be found online for use, but be careful. These contracts may not provide you as much protection as you need. In fact, some of the contracts could do more harm than good. Generic contracts arc sometimes a good start, but ultimately an attorney should review all contracts to be safe.
Attorneys often get a bad rap, I suppose from people who have lousy or no legal counsel during unfortunate circumstances. However, if you are prepared and proactive with your legal strategy, you will love your lawyer. Make sure that you protect the most important asset you have, your company, with adequate legal ser-vices from an attorney.