What do you think when you hear the word “attorney”? It’s quite possible that words like “ambulance chaser,” “unethical,” “pitbull,” “manipulative,” and “narcissistic” may pop into your head.
But is this justified?
Lawyers on TV may be all about screwing people over for a quick buck, but most real-life lawyers are good people looking out for the well-being of their clients.
Unfortunately, lawyer stereotypes often lead new business owners to avoid lawyers, often to their own detriment. A commercial litigation attorney can be an indispensable asset to your business and save you from costly mistakes that can lead to lengthy litigation down the road.
In that context, let’s discuss commercial litigation.
When you hire a professional commercial lawyer, their job is to protect the interests of your business. Think of them as the headlights on your car that help you see down the road in the dark. Their legal training and experience allow them to point out the pitfalls and hazards that you can’t see on your own. They can also help you plan for those hazards to make your business journey more predictable.
For example, let’s say you set up a business with an old friend. You don’t think you really need a formal partnership agreement because you and your friend have the same vision for the business, you get along great, and you can trust them to treat you fairly. Right?
Maybe. But do you really want to bet your financial future and the stability of your business on that? Money can bring out the worst in people. What happens if your friend starts using company money to pay their personal expenses? What if they want you to take the profits for yourselves but you prefer to reinvest in the business? What if they want to give up the business and move across the country, and they expect you to buy them out for much more than you think the business is worth?
If you have a written partnership agreement prepared by a lawyer, it can anticipate these scenarios and tell you exactly how they should be handled. If not, you could end up in costly litigation, and if you can’t reach an agreement, a court may even end up dissolving your business.
If you wait to hire a lawyer until you are sued, it’s too late. A good business lawyer is one of the first professionals you should secure early on when you are building your business.
Your lawyer can advise you on important issues such as:
- Selecting the right business structure for your circumstances;
- Drafting a business plan and operating agreement;
- Negotiating and drafting effective contracts;
- Preparing partnership, LLC, or shareholder agreements;
- Selecting a business name that complies with any state guidelines;
- Getting proper licensing or permits;
- Setting up internal procedures to ensure you comply with state and federal laws;
- Crafting clear employment policies and writing an employee handbook;
- Completing appropriate filings to protect your intellectual property; and
- Providing appropriate training to employees on harassment and discrimination.
Most commercial litigation work is preventative. Your attorney has seen the horror stories of what can happen when you take shortcuts in organizing your business or preparing agreements. They will review your documents and procedures and do everything they can to set you up for success.
As frustrating as legal disputes can be, they are an inevitable part of running a business. 43% of small business owners report having been threatened with or involved in a lawsuit. And the rate for larger businesses is even higher. Fortune 200 companies report average litigation costs over $100 million per year.
A good lawyer doesn’t come free or cheap. But do you know what is more expensive than hiring a lawyer for advice and counsel? Hiring one to represent you through a lengthy litigation process and trial. The median cost of taking an employment or contract case to trial is $88K and $91K, respectively. Not to mention the money damages you may have to pay if you lose a case because you failed to take appropriate preventative measures.
It is hard to assess the value of a good lawyer because if they are doing their job right, you probably won’t even know it. You can’t count the times you weren’t sued. But take it from the other business owners across the country that have been sued based on circumstances that were preventable: your business lawyer is probably saving you money you didn’t even know was on the line by heading off potential legal issues before they turn into lawsuits.
You probably got into business because you actually want to run your business, right? You are passionate about the goods or services you provide, and you want to focus your time and energy on that. You’re not a lawyer, and you don’t want to be. So why would you want to spend half of your life slogging through legal documents?
Your commercial litigation attorney can take these extra tasks off your plate. If you find an attorney with the right combination of skills and experience, you can rest easy knowing that they are looking out for your business’s legal interests.