As a small business owner you’re concerned about maximizing profits while simultaneously trying to limit some of the risks that come along with owning a business. There has long been a traditional stance when it comes to small businesses using lawyers - they’re for defense, you hire one when you’re getting sued and trying to protect your company or when something has gone wrong and you need them to defend your businesses reputation by going after the person or company who wronged you. That’s become a somewhat dated viewpoint when it comes to small businesses using lawyers and it’s far from the most beneficial way to work; think about how big companies use lawyers and general counsel - they use them on offense, to help recognize opportunities they can take advantage of and to address potential problems before they come up, which saves time and money.
Increasingly the role of a lawyer working with small businesses is becoming more focused on addressing general business and legal risks; they go hand in hand. If your customer service is terrible, that’s both a business problem (customer retention and general reputation are impacted) and a legal problem (it will significantly increase the odds of your business getting sued).
Lawyers should be helping small businesses with organizational wide compliance issues and general risk management strategies geared toward the specific goals of the business, while also keeping an eye out for opportunities and assets created by the company and taking steps to protect them. Lawyers are consistently viewed as a cost, and an extreme one at that for most businesses, but there’s a better way to view legal services, they should be a strategic partner relationshipthat brings something to the table as opposed to just sucking money out of companies. This is what small business owners should be looking for from lawyers and what they should come to expect from them.
Business owners can utilize lawyers to help develop processes and policies that both encourage efficient operations and minimize risks at the same time. The customer services example above is a company wide risk issue that can be solved with operational policies around how to handle customer interaction which will involve some risk mitigation standard. This is something ideal for small businesses to bring their lawyer in on from the very beginning and let them play a critical role in establishing.
Business owners spend a lot of time analyzing risks and weighing the implications of decisions they make for the company. This is the type of strategizing where a lawyer can be invaluable - it doesn’t involve drafting or reviewing a contract or a lawsuit, but it’s exactly the main role a business lawyer should be playing for a small business (advisor), everything else is secondary. Most business owners think that type of relationship is cost prohibitive, but there are alternative billing models, such as subscription based legal services, built to provide that type of relationship.
Legal services may be more affordable than most businesses think. The reason they often end up being expensive is because businesses don’t bring a lawyer in until there is a problem, that’s always going to be more expensive and time consuming. The cost of using a lawyer as a regular strategic advisor may seem small compared to having to retain one for a full blown dispute of a lawsuit.
As a small business owner you should be taking advantage of any opportunity you can to both protect your business and out distance yourself from your competitors. Put a business lawyer to work for you with the mindset of having them play offense for your company.
Have questions about how a lawyer might benefit your business, or legal and advisory questions in general? Contact us for a free consultation.