The more your business grows, the more complex your legal issues become. Whether you’re inking your first partnership deal with a new client or faced with a disgruntled former employee, you may find yourself asking whether you need to hire a lawyer.
Here are some tips for identifying when to start looking for an attorney, broken down into 3 categories: disputes, transactions, and compliance.
Typically, the right time to hire outside counsel is when a dispute has reached a point where you can’t resolve it yourself. Before it reaches that point, try the following steps:
Assess the situation. Look at the facts from an unbiased perspective. Objectively try to assess whether you have a valid claim. Also reflect on whether the amount of money at stake in the dispute justifies the expense of hiring an attorney. It’s never a good idea to “lawyer up” just because you’re upset or want to teach the other party a lesson. Letting emotions influence your legal strategy can get very expensive.
Is there a case? If, after a clear-eyed analysis, it looks like there may be some merit to your claims (or to any claims against you), and you haven’t been able to resolve the dispute yourself, consider engaging a lawyer. This is especially true if the other party has already brought in a lawyer. A major benefit of hiring a good lawyer is that, given their experience, they can often read into actions taken by the other party to determine the appropriate response and are skilled negotiators who understand how to use the law as leverage.
No, there isn’t a case. On the other hand, if you decide that your claims (or those against you) are weak or that pursuing a lawsuit will cost more than the claims are worth, focus on responding in a forceful but cost effective way. For example, if it appears that a company might be loosely infringing on your trademark, but the company or person doing so has zero foothold in the market and doesn’t appear to be operating a viable business, you might consider sending a cease and desist letter. This can be an inexpensive way of giving the other party notice that they are on your radar and that you are willing to pursue formal legal action, should they not terminate their infringing activity.
Also remember that there are alternatives to going to court, such as arbitration and mediation, which may be faster and cheaper than litigation.
If you’re entering into a particularly complex transaction, you may want to consult an outside lawyer who has the requisite expertise. Examples of transactions that may require the assistance of counsel are real estate leases, intellectual property licensing, and financing transactions.
On the other hand, if you’re coming across the same type of transaction many times in the normal course of business, you may have a “playbook” for dealing with certain terms and negotiation points. Depending on the volume of these deals and your level of comfort with them, you may or may not need legal help. One cost-effective way of using a lawyer could be to ask for a review of your standard documents and processes to ensure that there are no issues you may be missing.
For more on determining the line between complex and routine legal work, check out our article What Exactly is “Routine” Legal Work?.
The other subset of legal issues that often requires outside counsel is regulatory compliance. Although compliance is not the most glamorous part of building a business, it is essential for establishing the foundation upon which your company will grow as smoothly as possible.
Some examples of heavily regulated industries that require compliance attention are insurance, financial services and securities, real estate, labor, and food and alcohol. You don’t want to end up as the next Zenefits, which took compliance shortcuts and paid an enormous price. Although companies like Uber and Airbnb push legal boundaries and actively engage with government regulators, you can bet that they have lawyers on board who are experts on the current landscape, even as they work to change it.
An attorney seasoned in regulatory and compliance issues relevant to your business will know which filings are important and which operational processes you need to put into place to minimize vulnerability as your company grows.
Once you’ve decided to hire an attorney, the next question you need to answer is: “Which legal service provider can best serve your needs?” At this point, you could consider seeking out personal referrals for the type of lawyer you need. But this can be time-consuming and hit-or-miss. Priori Legal uses data from thousands of successful legal engagements to find you exactly the right lawyer at their best rates. Priori attorneys offer free 30-minute consultations with no obligation, which you can use to help you determine whether you do in fact need an attorney to resolve your issue.