Small businesses often try to save money by taking care of minor legal details on their own, which may or may not be a good idea. A smart entrepreneur can read a contract and understand the terms of an agreement, but entering into any type of arrangement without getting advice from a lawyer can be a very dangerous decision.

While there may be some instances where avoiding legal fees will work, there are some business activities and events that absolutely require the services of a legal professional. In these particular instances, not using a qualified business attorney could wind up costing your company a lot of money. The ironic twist may be that avoiding the use of an attorney could wind up creating significant legal bills as you try to undo the damage you have done.

Releasing A New Product

You and your company have been researching and developing the product that you feel will elevate you to the next level in your industry. You decide to call it the "Wondrous Widget," and you start investing thousands in developing your marketing plan. The day you put the "Wondrous Widget" on the market, you get a cease and desist letter from a company that has trademarked that name.

A good lawyer can help you to make sure that the name you choose for your product is not already protected in your markets. If you decide to release your product into new markets, then an attorney can give you the all-clear for those new markets as well.

Developing A Recruiting Plan

Human resources has become the one area where every small business must invest in a lawyer to avoid lawsuits. In order to keep your company out of trouble, you need to develop a comprehensive recruiting plan and have it reviewed by an experienced attorney. You also need to have all of your interview questions approved, or at least be given language you can use when you are asking improvised questions.

You will also need guidance on what to say when you are rejecting someone for a position. Many rejected employees will ask for reasons that they can later use in a lawsuit against your company. By having your process reviewed by an attorney, you can avoid any of the issues that come with recruiting employees.

Working With Other Companies

It is common with small businesses that companies will team up with each other to reduce costs in areas such as marketing or product development. But before you start working with another company on anything, you should have an attorney look over the arrangement and make suggestions that will protect your company. More than likely, the other company has hired a lawyer to protect their interests. There is nothing wrong with your company doing the same.

Getting A Patent

Another way that small businesses protect themselves is to get a patent to protect their ideas. But if you do not have an attorney take care of your patent process, then this could come back to bite you later on. This is especially true if you intend to sell your product internationally.

Running a small business is a lot of work, and many owners try to keep costs down by taking on even more work for themselves when they don't hire a lawyer. While avoiding legal fees may work on some aspects of running a business, there are several instances where hiring an experienced attorney is the only way business should be done.


It seems like more and more people are deciding to start their own businesses these days for a variety of reasons. When the economy collapsed in 2008, some people who had lost their jobs decided to start their own businesses rather than risk being laid off in the future by another company.

There is a great deal of responsibility that goes along with starting your own business, and your first decision is just as important as every decision you will make throughout the history of your business. That first decision you will make will be on the legal form your business will take, and it is a decision that must be made by consulting an attorney.

Sole Proprietorship

You can open a sole proprietorship using your own name, or you can file a "doing business as" certificate to call your business something else. Your local county or city government may require you to get a business certificate to get started, but that is the only real paperwork constraints on a sole proprietorship.

A sole proprietorship is the cheapest and easiest form of business to utilize, but it also offers the least amount of protection to your personal assets. If someone decides to sue your company, you could lose all of your personal assets in the lawsuit. A sole proprietorship allows you to run your business, but it does not protect your personal property and finances from potential legal action.

Limited Liability Company (LLC)

The rapidly growing popularity of LLCs can be seen in the ways in which laws are being changed to make it easier for people to utilize this business format. In the past, there had to be at least two business owners to be able to start an LLC, but now individuals can utilize an LLC as well. The LLC format is very flexible, and it allows you to have partners and business owners from anywhere in the world.

Filing for an LLC can be expensive, but it offers protection you do not get from a sole proprietorship. An LLC is its own entity, which means that any lawsuits brought against the LLC do not affect the personal assets of the owners.


Corporations are the most expensive and complicated types of businesses to form, but they can offer operational and tax benefits that make them practical to use. There are two primary forms of corporations that are referred to as C and S corporations, but both are very different in many ways.

An experienced business attorney can explain the main differences between the two forms of corporations, and give you advice on which corporation format is best for your business. A corporation involves several annual tax filings, a mandatory board of directors, and several other procedural elements that need to be considered before you make your final decision.

The very first decision you will make regarding your business is one of the most important ones. If your business is not the right legal format, then you may find it difficult to grow in the future, and you will be leaving yourself open to personal financial damage. Consult with an experienced attorney to determine which legal format is best for you business, and develop a plan for getting your business off the ground.

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