WHEN IS IT TIME TO CONSULT A BUSINESS ATTORNEY?
One of the questions potential clients frequently ask of me is, “When should I consult an attorney?” The answer to this question is really quite simple, a business owner should consult an attorney early on and should find an attorney who they can speak with when the need arises.
What I mean by this is, every business owner or operator should make an appointment with an attorney at the very beginning of deciding to open a business, and then keep in touch with the attorney on a periodic basis to make sure that the business is operating within a proper legal framework, which will help prevent future problems. As I have said on numerous occasions, this initial consultation should be at no charge (about one half of an hour), and a potential client should ask all the questions of the attorney to make sure they are satisfied that this is the right attorney for them. Ask for references if you feel it is necessary and be sure to discuss fees. You should find an attorney who charges reasonable fees, but remember, don’t choose your attorney based upon the lowest fee being offered.
Use your attorney to help you decide how to protect yourself, your family and your business from potential liability. If you are not incorporated or operating under some other form of business entity which protects your assets, you need to correct this immediately. Incorporation fees can vary between $800 and $1,500. Compare the services being offered and what you are receiving for your fee. Our firm runs a special for incorporating, as we hope to be of service and assist those clients when other needs arise. Other forms of protecting your interest may be more expensive, such as those for a limited liability company, and you need to discuss such needs with the attorney.
It is important to remember, while your accountant may be an expert when it comes to tax planning and accounting, do not rely on your accountant for legal advice or for protecting your assets by creating your corporation. While they may have your best interest at heart, I can only relay the fact that most corporations formed by an accountant usually do not provide the protection desired, and could subject you to personal liability and loss of many tax benefits. You would not go to a mechanic for a medical problem, so use an attorney for a legal problem, not an accountant.
If you have not had a meeting with an attorney since opening your business, I urge you do so as soon as possible. If you are seeking a free consultation, be aware your appointment may be scheduled for the future, as a good qualified attorney usually has a full calendar on a short term basis. Once you meet with the attorney and if you decide to use the attorney, let them know. Have your agreement reduced to writing so you are not surprised by a bill, and find out that the attorney charges for simple phone calls.
My recommendation, when interviewing an attorney, is to determine their skill level and the areas that they practice in. A good business attorney should be well versed in general business, business litigation, taxes, estate planning and also have referral resources to refer you to, if the need arises, in an area outside of the attorney’s expertise.