You will often hear small business start-up experts state that there are four professional relationships that every small business owner should develop early on – insurance agent, banker, CPA/accountant and attorney. However, many small business owners neglect developing these relationships until it is too late, and this is especially true when it comes to establishing a relationship with a business attorney.
This is troublesome, because, though all four are important to develop, it is the relationship with a competent attorney that may prove to be the most advantageous for the small business owner to have in the long run. For small business owners that do not have a relationship with a business attorney yet, a great resolution heading into 2013 is to establish that relationship and get a small business attorney on your team.
Why does the business owner-attorney relationship often get left behind? Well, the answer is simple, really – the common impression of an attorney-client relationship is one that is established as a reaction to something bad happening, and not as one that is established to accomplish a goal. For example, most business owners understand the need for an accounting professional to be on board early. That professional relationship is about cash flow, profits and losses, projected earnings and purchases, taxes and essentially the overall financial health of their company. Therefore, most business owners seek out that professional relationship from the start.
The same can be said of bankers. Because many businesses need an ongoing access to capital and borrowed funds, and there of course is the necessity to establish bank accounts and credit cards, a banker is usually called in early to help service these needs for the business.
What about the insurance agent? It is likely that most business owners already have experience with insurance agents in their personal lives, so there is either an already existing relationship or it is not a foreign concept to seek out an insurance agent for their business needs.
But, for many small business owners, the attorney-client relationship is foreign to them (or possibly even tainted or distasteful because of prior experiences), thus they let their legal needs take a backseat and put them off to be dealt with somewhere down the road. After all, until a lawsuit gets filed or a government agency comes calling, many small business owners do not realize that they may actually have legal needs. Therefore, they fail, either intentionally or unintentionally, to develop a relationship with a local attorney, often thinking they are saving money by doing so. But the reality is that they are setting themselves up to be at the mercy of whatever attorney they are able to find in their time of need – often, that crucial time-period between being served with a lawsuit and the deadline to respond to that lawsuit.
Scrambling around to find an attorney in the days after being served with a lawsuit can waste your valuable time and can put a significant strain on you and your bank account. Having a professional relationship with a local attorney who is capable of handling your defense, or at least can refer you to a competent attorney who can, is an invaluable relationship that many business owners unwittingly choose to ignore.
Moreover, while developing a relationship with a business attorney for the express purpose of having someone to turn to if sued is smart, it is not the only reason to seek out that relationship early in your company’s life, nor is it the best reason. In fact, it is only the safety net reason.
The best reason to seek out that advice early on and develop that relationship is to try and avoid the lawsuit in the first place. An attorney retained to defend your company after you are sued cannot make sure that your company was in compliance with all laws and regulations prior to the lawsuit. No, the attorney can only do his or her best to defend your company based upon the facts that were present at the time. But, an attorney that you consult from time to time regarding business operations (i.e., corporate maintenance requirements, employment matters, contract terms, etc.) can certainly help steer you clear of unseen legal pitfalls and landmines, and can put you in legal compliance before a problem arises.
In other words, to be most effective in assisting your business’ legal needs, the attorney must be consulted before the problems arise. What better time than now to develop that relationship?
Need more information on how to choose a business attorney? Check out these links for more articles and videos from Docstoc:
How to Manage Attorneys' Fees
3 Tips for Choosing the Right Attorney for Your Business
Why and When You Should Hire a Business Attorney
Choosing the Right Lawyer for Your Business
Image courtesy of Stuart Miles at FreeDigitalPhotos.net.