Do you really need a lawyer for your business?
Perhaps you have given this answer “No - I don’t need a lawyer for my business. I can download all the contracts and information that I need from the internet”.
Time and time again we have heard this from some clients, friends and acquaintances.
But - Do you really need a lawyer for your business?
Why You Should Get a Lawyer for Your Business?
You have just signed a contract that you or your supplier downloaded from the Internet. You have read the contract and you believe that it is okay and that it will do. After all the contract is just for 12 months. You intend to comply with the contract terms.
But do you really understand the fine print of the contract you have just signed and what it will mean for you in six months’ time? Does the contract cover every eventuality eg a Pandemic or other unexpected event?
A contract must be crafted to fit the specific requirements of a transaction. Using precedents downloaded from the Internet is a trap for the unwary. It could lumber your business with unwanted and unnecessary obligations, land you in court and cause your business and you unexpected financial loss.
While you do not necessarily need a lawyer in every legal matter there are some situations when it is in your best interest to hire a lawyer. If you have been charged with a criminal offence eg fraud it is definitely in your best interest to hire a lawyer.
In this article we will show you how hiring a lawyer can help protect your business. We know that legal fees can be expensive. However, it is still a good idea to at least contact a lawyer to see if they can help. There are some law firms such as ours which have various options eg fixed fees, retainers designed to take the sting out of legal fees.
Hiring a lawyer will in some instances help you avoid potential legal problems down the road and if your business is sued you will definitely be happy that you hired a lawyer.
Hiring a lawyer may in reality save you money or make you money.
Remember, it is best to be safe than sorry.
You do not need to retain a lawyer on a retainer unless it is strictly necessary. However, there are occasions when it is necessary for you as a business person to get legal advice from a lawyer. When setting up a business there are forms and documents that you may need to complete and contracts that you may wish to review. Hiring a lawyer can help ensure that your business is operating legally as they can check and advise you on contracts and documents that you would need to review and sign.
First things first! Before hiring a lawyer you should make a checklist of questions you want to ask them. Ideally you should check the lawyer/law firm out on the Internet before contacting them or you may wish to contact them directly if you have been referred to them.
The first question to ask is whether they have helped businesses similar to yours. If they have, that is a good starting point. If they haven’t you would need to probe further to ensure that the lawyer has the experience and expertise that you require.
Business Law
Business Law is a wide discipline. It covers several areas of business and commercial law. Some lawyers call themselves Business lawyers and specialise in general business law.
Others specialise in aspects of business law eg Contracts and commercial law, corporate law, employment law, mergers and acquisitions, aviation, oil and gas, commercial property, banking and finance law, intellectual property law etc.
As a business person you will want a lawyer who you believe is suitable for your business. These are the most common types of lawyers for businesses.
1. The Business Lawyer
This is a generic name for a lawyer who can provide advice to businesses on a range of business issues. This kind of lawyer provides advice on a wide range of business matters eg contracts and commercial matters, employment, commercial property, and may or may not specialise in some specific business areas. If you need a lawyer for general business work a general business lawyer may be your best choice.
When deciding to hire a business lawyer, ask them questions about the areas of law on which you require advice. If the answers are unsatisfactory then you may want to go for a more specialist lawyer.
2. Contracts Lawyer
Nowadays, many business owners download and use templates found on the internet for their contracts. Whilst these may work, they could on the other hand cause your business legal problems as templates are mainly generic . No two circumstances or sets of facts are the same. A template must always be adapted to fit the specific circumstances of the case or matter for which it is being used.
We had a case two years ago where a Founder of a Tech company downloaded the contract that he used to employ his freelance contractor (a 19-year-old student at university) to develop his mobile app from the Internet. Unfortunately for the Founder but fortunately for the student, the template did not contain an Intellectual Property clause. The Founder entered into the contract with the young man and started paying him. About eight months into the contract a dispute arose between them Founder and the young man over delays in the mobile app development. The young man and his mother sought legal advice on their rights from a lawyer who informed them that the young man owned the rights to the mobile app that he had been hired to develop. Following a series of letters from the young man to the Founder, the Founder sought legal advice from us. The case was subsequently settled with the Founder incurring unexpected financial loss. Thus, templates may not cover the specifics for your particular business.
A qualified contracts lawyer can advise you on the right contracts for your business and amend or adapt any precedent contract to meet the specifics of your business.
If your business uses contracts, you should consider engaging a contract lawyer to review your contracts and make sure they are watertight.
3. Employment Lawyer
Employment law is very important as this is an area where an employer may trip up and end up being sued by his employee thereby incurring financial loss. Some of the areas where an employer may require assistance are discrimination, unlawful or unfair dismissals, sexual harassment, unlawful deductions of wages and breach of contract.
Unfair dismissals is one area where it is easy for an employer to breach employment law. You may consider that an employee deserved to be sacked but you must follow the proper procedure. If you do not follow the proper procedure you may end up having to pay the employee damages for unfair dismissal. This may also result in reputational damage to your company or business.
If you have employees, you should consider getting legal advice on your employment contracts and on employment law. Employment law is a technical area and the law on employment is subject to regular changes. Depending on the number of employees that you have you may also require advice on a Staff handbook and on Health and Safety law.
If you believe that an employee’s employment should be terminated do discuss the issue with your lawyer as they can guide you on the best way to do it. Your lawyer can also keep you up to date with all the changes in employment law.
4. Business Sale and Purchase Lawyers (Mergers and Acquisitions)
This is a fast paced and complex area of law. Some business lawyers specialise in this area. A sale of a business may be a share sale or an asset sale. For this area of law you need a lawyer with good negotiating skills and with experience and expertise in buying and selling businesses. It is essential to have an experienced business lawyer at your side when buying or selling a business. Our lawyers have experience and expertise in the buying and selling of businesses.
The opposing party may offer to prepare the first draft of the share purchase agreement(SPA) or the asset purchase agreement (APA)and will try to put in clauses that would be in their client’s interest. A good business lawyer will go through each clause in the agreement and will identify clauses that need to be redrafted or removed.
Having a business lawyer at your side will also ensure that you obtain legal advice on the implications of the warranty clauses, tax covenants, employee transfers and TUPE, pensions, intellectual property rights and other complex matters.
A business lawyer will also be able to advise you or assist you with the filing of the stock transfer forms and other documents at Companies House. Where the sale involves the assignment of a lease a business law firm may be able to act for you on the lease assignment or freehold purchase if they have the relevant expertise or refer you to a property lawyer.
Mergers and Acquisitions is a complex area of law and should not be attempted without the assistance of a business lawyer.
Pure Business Law can guide you through all the intricacies of a share sale or an asset purchase sale.
5. Tax Lawyers
Running a business is complicated without the added burden of dealing with your taxes on your own.
Accountancy is a profession where you do not need to have any qualifications to call yourself an “accountant” or set up shop as an “accountant”. Business taxes can be complex and can cost your business money if your taxes are not prepared properly of if errors have been made. We always advise our clients to use qualified accountants.
If, for some reason or the other, HMRC were to decide to issue legal proceedings against you, you will need to hire a tax lawyer.
If you decide to hire a tax lawyer, you must choose a lawyer with experience of dealing with tax matters and tax law. Do ensure that your lawyer has experience and expertise in tax law and is not just someone who wants to gain their first experience of tax law by taking on your case. Ask them for the types of tax cases in which they have been involved and the outcome.
Pure Business Law does not provide tax advice however we may be able to refer you (at no cost) to some tax law firms who may be able to assist you. Alternatively you may wish to contact the Law Society at www.lawsociety.org.uk.
6. Intellectual Property Lawyers
All businesses have some form of intellectual property but may not know it. As a business you are likely to have some intellectual property eg trademarks, patents, trade secret, copyrights and branding which may need protection.
If you are setting up your company for the first time or you are selling or buying a new business or company, you are likely to need an intellectual property lawyer.
If your company has developed a new invention or has an existing trademark you should get advice from an intellectual property lawyer on how to protect your intellectual property.
When you have picked the perfect business name you must check Companies House, the Internet (Google, Bing, Altavista) , the UK Intellectual Property Office’s (UKIPO) database and other trademark databases to ensure that no one else is using the same name to market similar products or services.
Carrying out a search of the UKIPO database yourself may produce limited results. If so you should consider engaging an Intellectual property lawyer or a chartered trademark attorney to help as they can carry out more detailed searches of registered trademarks.
Pure Business Law has expertise in carrying out such searches.
A list of chartered trademark attorneys is also available at https://www.citma.org.uk (The Chartered Institute of Trade Mark Attorneys).
If the business name that you have chosen is available to use, an IP lawyer or chartered trademark attorney can advise you on how to protect your trademarks, patents, trade secrets and branding. An IP lawyer can also advise you on whether your business is infringing the rights of other businesses.
An IP lawyer can also advise you if another business is infringing your trademark and can help you with preparing a “cease and desist” letter i.e. a letter to the infringing party warning the party to stop infringing your rights or face the consequences and resolving a dispute over your IP rights.
Conclusion
Whilst each business’s legal circumstances are different there are occasions when you should hire a lawyer. Deciding not to have a lawyer may initially save you money in the short term but cost you financially in the long term.
The law is not as easy as it may look when viewed through your computer screen.
A contract is not as simple as it looks when you have the contract template in your hand.
Failing to hire a lawyer when starting your new business, reviewing an employee or supply contract, or embarking on a transaction with potential legal implications can result in problems that could have been avoided with some thought and foresight.
It is always better to avoid problems than spend money fixing them later.
We are fixed fee specialist business and commercial solicitors based in Bedford and London. We operate nationally. If you would like legal advice on any of the issues that we have raised in this article or on our website, or would like to discuss our fee options including our fixed fee option, please contact us and speak with one of our specialist expert business and commercial solicitors.
We are waiting for your call.
Pure Business Law is regulated by the Solicitors Regulation Authority and is a licensed member of the Law Society of England & Wales.