Do I Need a Business Lawyer?
When do I need to hire a corporate attorney for my business? Some scenarios are obvious — you should call a criminal or corporate attorney when government officials are investigating you for tax or securities fraud, when an employee is injured on the job, or when a customer is injured by one of your products.
But you should also consider hiring a corporate attorney in other situations, like:
- When you are starting a business.
- When you are buying or selling a business.
- When you are considering dissolving your business.
- When you are hiring senior or key employees.
- When you are hiring employees with access to company secrets or confidential information.
When You Probably Need a Business Attorney
Here are a few examples of when you should consider hiring a good business attorney for your large or small business.
- The members of your LLC, shareholders of your company, or partners of your partnership want to allocate the profits and losses, especially in the LLC operating agreement, shareholder agreement, or partnership agreement.
- The business partners will contribute capital, other than cash, to the partnership, company, or LLC, such as intellectual property, know-how, or appreciated property.
- In connection with the purchase of a business that has significant potential liabilities, like: environmental issues (state and federal environmental laws impose liabilities on landowners in the chain of title, regardless of whether they caused the contamination); product liability, employee liability (sexual harassment or employee discrimination claims); excessive debt; or special capital calls.
Please note
If you are a member of a limited liability company, a shareholder in a closely held company, or a partner in a partnership, keep in mind that the company lawyer is representing the company, not you. There are times when members, shareholders, or partners decide to form their business or eventually go their separate ways. The corporate attorney hired for the business has the business as its client and protects the business’s interests.
In the scenario of forming a business, each business partner has their interest in mind, which may be adverse to the proposed company (for example, if one member is contributing intellectual property to the new business, they may want to have an exit strategy to keep their intellectual property if they part ways). Or in the event of a “business divorce,” where the remaining members, shareholders, or partners are buying out other LLC members, company shareholders, or partnership partners, the company lawyer has the company’s best interest in mind, which interest is adverse to the departing business partners.
Business partners, members, and shareholders should be represented by their corporate attorney to avoid conflicts of interest, or at the very least, the business lawyer needs to advise the partners of, and they have to waive in writing, the conflicts of interest.
If you need help with deciding whether you need to hire a business attorney, you should contact a licensed business lawyer for an initial consultation. As the old saying goes, an ounce of prevention is worth a pound of cure.