When to Hire a Business Attorney

It is prudent for business owners to hire an attorney specializing in business law before facing a lawsuit or issues with employees.

By Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Get Smarter: Search my blogs

How Can a Business Attorney Help a Small Business?

The thought of hiring a business lawyer may not seem too appealing, due to the fact that most people associate seeing an attorney with legal problems. Of course, nobody wants to think about going to court or paying damages. However, there are many instances in which a business lawyer can be very helpful for growing small businesses. Plus, there can do a lot more than help out with legal dilemmas. In fact, a good business lawyer can help an entrepreneur establish his or her small business, manage their intellectual property rights, create legitimate and favorable contract, as well as put in place good employment practices. A business attorney will also help a small business owner stay up to date regarding charges in local and federal laws which might impact the business. Essentially, working with a business attorney can help a small business owner face legal problems down the road by planning ahead. Should any legal issues arise in the future, the attorney will be there to help the entrepreneur through it.

Of course, it can be expensive to retain a business attorney, especially for small businesses that do not have much money or are on a strict budget. This means that it might not make sense to go to an attorney for every single problem that might have legal ramifications. But it can be difficult to know when one can handle a problem on their own and when it is best to consult an expert. Therefore, below we will discuss some of the instances in which a business lawyer is worth consulting.

Therefore, below we will discuss some of the instances in which a business lawyer is worth consulting.

  1. Changing a Business Structure or Ownership

When an entrepreneur begins a new small business, one of the first issues he or she will face is the need to choose an entity structure for the business. This choice is not arbitrary; it will affect the company’s tax liability down the road, as well as stock options and other important business elements. However, when a business owner is first beginning his or her startup, they can likely handle this issue on their own, without the help of a lawyer. If the entrepreneur is the sole owner of the company, then he or she has the ability to change the structure in the future if needed. It is important to remember, of course, to keep business and personal finances separate.

That said, if a business owner decides to change the structure of their company at some point, then it is the appropriate time to speak to an experienced business attorney. The lawyer will explain the advantages and disadvantages of the switch, as well as guide the business owner through the process of changing the entity type. This is an important step if a business owner is bringing onboard new investors or partners. Any individual who has an ownership stake in the business has legal rights. Therefore, a business owner will need to create specific documents, such as a shareholder’s agreement, in order to lay out how the business relationships will work, what each party’s role will be, and how disputes will be resolved if ever they occur.

  1. Creating Contracts

For individuals without a legal background, contracts can be confusing due to strange legal jargon. When a business owner starts his or her company, therefore, they should be sure to consult a business attorney about how to create standard contracts. This way, the business owner can use these templates when working with clients, suppliers, and other necessary parties. An experienced business attorney will be capable of identifying issues that a business owner may not have thought about. They will also be able to craft a legible, clear, and enforceable contract.

When it comes to daily, simple transaction, a general contract will be more than enough. However, if a business owner is working on a big deal or a long-term arrangement (a lease, a loan, etc.), then it is best to consult an attorney to establish the details and terms of that important contract. In fact, there might be major tax implications or terms that grant the other party a lot of power or maneuverability. An attorney can help identify these problem areas and negotiate better terms.

It is a bad idea to sign a contract that one does not understand, or a contract that does not address vital issues. This kind of error can lead to expensive and time-consuming legal action in the future, so it is best to get legal advice at the start to prevent this from happening.

  1. Problems with Employees

The field of employment law is complex and specialized. Laws that govern overtime pay, workers’ comp, family leave, and employees’ rights routinely change. Therefore, it can difficult to stay current with all the different regulations and rules. A business owner’s legal duties to his or her employees may also change according to the structure and size of his or her company. As a business owner begins to structure his or her employment policies, it would be worthwhile to speak with a business attorney to ensure that he or she knows their legal rights and duties, as well as those of their employees.

If a business owner is pursuing a unique employment setup, such as paying employees in stock options, then it is even more important to consult a business lawyer. This is because there may be tax implications, in addition to the fact that the business owner as well as their employees have different legal rights and duties. All of these matters should be settled in the beginning.

Naturally, a business owner will also want to consult a business lawyer if an employee brings forward a complaint. Without question, harassment and discrimination problems require the help of an attorney. Small issues, however, may also benefit from an attorney’s assistance. Even saying the wrong thing about a pay dispute could open a business owner up to liabilities. A business owner should listen to the employee’s complaint and then consult their business lawyer prior to taking any action.

  1. If the Business Is Sued

One of the realities of running a business is the possibility of facing a lawsuit. It is likely that a lawsuit will be sent directly to one’s attorney, who will help a business owner understand the reason behind the dispute and what their options are for handling it. For instance, contract disputes may often be resolved through mediation or arbitration instead of a costly lawsuit. When facing a lawsuit, a business owner should contact a Los Angeles business dispute attorney to defend the lawsuit.


A business owner should not wait until he or she is facing a big lawsuit to contact a business lawyer. A business attorney can help a business owner with a variety of legal issues, not just going to court. In fact, they can help an entrepreneur set up their small business, putting it on the road to success right from the start. It is a good idea to identify a business lawyer early in the lifetime of a business so that the owner can build a relationship with their attorney. By keeping the lawyer apprised of the various aspects of the business, an owner can ensure that their lawyer is better able to assist when needed.

A business owner should not hesitate to shop around for the business lawyer that fits their needs and budget. Not all attorneys charge the same and a number of lawyers are okay with working on a sliding scale or doing free work to help startups get off the ground. In order to find an experienced business lawyer, a business owner should check both the American Bar Association’s and FindLaw’s searchable online resources.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

What Is a Gap Analysis

What is a Gap analysis?

Gap analysis helps businesses compare current performance with desired goals, identifying inefficiencies. This method aids in developing action plans to bridge performance gaps.
SWOT Analysis Example

SWOT Analysis Example

Conducting an HR SWOT analysis helps identify strengths, weaknesses, opportunities, and threats within and external to an organization. This process aids in developing strategic HR actions aligned with the company's objectives.

Costco Hot Dog Price Story

The story about Costco $1.50 hot dog price began in 1993 when the Costco merged with Price Club. Costco's $1.50 hot dog price remains unchanged in 2024.

Request for Production of Documents, RPOD, CCP 2031.280

Starting January 1, 2020, California's civil litigants face stricter discovery rules under Cal. Civ. Pro. § 2031.280(a). All produced documents must now be labeled by request number, impacting both new and ongoing cases.
What is a default judgment

What is a default judgment

A default judgment is issued when a defendant fails to respond to a lawsuit, allowing the plaintiff to win by default. Understanding this process is crucial for both parties involved in litigation.
What is a quitclaim deed

What is a quitclaim deed

Quitclaim deeds offer a quick way to transfer property ownership without guarantees, distinct from warranty deeds. Ideal for non-sale property transfers among family or into trusts, they require careful legal consideration.
Sole Proprietorship Business License

Sole Proprietorship Business License

Sole proprietorships offer simplicity and fewer formalities for new business owners, with benefits like no separate taxes. Remember, personal and business assets aren't distinct, impacting liabilities and the need for proper licensing.
What is the most important part of your business plan

What is the most important part of your business plan

The executive summary shines as the pivotal element of a business plan, serving as a decisive factor for readers to delve deeper. A comprehensive guide on crafting an impactful business plan, focusing on unique strategies and essential components.
Easy Businesses To Start

Easy Businesses To Start

Unleash your entrepreneurial spirit with these straightforward home-based business ideas, from e-commerce to creative pursuits. Embrace the flexibility and potential for financial independence with diverse options suited for various interests and investment levels.
What is the standard deduction

What is the standard deduction

Understand the IRS standard deduction, a straightforward option for reducing taxable income without needing detailed documentation. Delve into eligibility, amounts for 2023-2024, and considerations for itemizing versus standard deduction.
How to get a business license

How to get a business license

Grasp the essentials of obtaining a business license in California, focusing on local and state-level requirements. Uncover specifics on when and why different types of business licenses are needed.
Why Do Businesses Fail

Why Do Businesses Fail?

Uncover the key factors contributing to small business challenges, including financial obstacles, inadequate management, and flawed marketing strategies. Understand the role of a comprehensive business plan in ensuring long-term success.
What is a BOC 3

What is a BOC 3

Understand the essentials of a BOC-3 filing for transportation businesses in California, detailing the designation of process agents for FMCSA certification. Learn the requirements, costs, and benefits of choosing the right process agent for your business.
Standard deduction vs itemized deduction

Standard Deduction vs Itemized Deduction

Understand the key differences between standard and itemized deductions to effectively reduce your taxable income and potentially save on taxes. Choose wisely to maximize your tax benefits based on personal financial details.
How to calculate net income

How to calculate net income

Unveil the significance of calculating net income for business profitability, a key indicator for financial health and decision-making. Understand the formula and practical applications for determining net earnings.
Itemized deductions

Itemized Deductions: What they mean on a tax return

Optimize your tax return by understanding the differences between itemized and standard deductions, crucial for minimizing tax liability. Learn the benefits and challenges of itemizing to make informed financial decisions.
What are intangible assets

What Are Intangible Assets

Discover the value of intangible assets like patents and trademarks in your business, crucial for strategic and financial planning. Learn how to manage and amortize these non-physical yet essential resources.
What is accounting

What Is Accounting

Understand the importance of accounting in monitoring financial activities and making informed decisions for your business. Gain insight into accounting fundamentals and its role in legal and tax matters.
Dysfunctional family

Dysfunctional Family: Key traits and impacts

Explore the impact of growing up in a dysfunctional family, where constant conflict, neglect, and various addictions shape childhood experiences. Understand common traits, the consequences on children, and the cycle of unhealthy parenting behaviors.
When Was the Great Recession

When Was the Great Recession?

Delve into the Great Recession's timeline, an era of financial distress from December 2007 to June 2009. Understand the causes, including the 2007 housing bubble crash, and worldwide effects.
When Was the Last Recession in the US

When Was the Last Recession in the US?

Review discussions on America's most recent downturn, comparing the impacts and definitions of Covid-19 and the Great Recession. Analyze the significant effects of past economic crises on US policy and business approaches.
What to Invest in During a Recession- 4 Ideas

What to Invest in During a Recession: 4 Ideas

Uncover effective strategies for investing during a recession, assessing personal goals and current market situations. Examine four robust investment approaches to manage through economic declines effectively.
Will the US Get Hit with a Recession in 2024

Will the US Get Hit with a Recession in 2024?

Experts debate the likelihood of a 2024 US recession, analyzing factors like the yield curve and consumer confidence. Predictions vary, with a focus on interest rates and tech layoffs impacting the economy's future.
How Long Do Recessions Last

How Long Do Recessions Last?

Learn about typical US recession lengths and influencing factors, noting recent trends with shorter durations averaging 10 months. Investigate how external factors and government decisions affect recession timelines, comparing historical data.
When Will the Recession End

When Will the Recession End?

Economists predict a mild US recession with limited impact on employment and spending. The duration and impact of the recession depend on Federal Reserve policies and business cycle patterns.

Contact our attorney.

Please tell us your story:

0 + 4 = ?