What does a business lawyer do?
What type of business law do they practice?
Do you need to hire a lawyer for your business?
In this article, we will break down the role of a “business lawyer” so you know all there is to know about it!
We will look at what is a business lawyer, what do they do, what type of business attorneys are there, business lawyer meaning, how to choose the right lawyers for business owners, when not to hire business lawyers, how to become one and more!
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What is a business lawyer
A business lawyer is a legal professional trained in dealing with all aspects of a business.
The term “business” paints a broad brush and isn’t clear as to what aspects of a business attorney may handle.
You’ll need to further define the specialty of the business lawyer is within the vastness of “business”.
A good business lawyer is a solicitor who has a good understanding of all the different aspects of a business.
A business lawyer typically deals with many things such as:
- Contract enforcement
- Transactional matters
- Intellectual property rights
- Business tax matters
- Real estate matters
- Employment matters and issues
- Business licenses and permits
- Business financing
- Incorporation and business formation
- Business disputes
- Dispute resolution
- Business operations
- Regulations affecting businesses
- Business compliance
A business attorney may have a core focus in a certain practise area such as business incorporation or contracts but will also have a good grasp of the overall legal landscape affecting a business.
If you operate a software development company, you may want to find a business lawyer understanding the high-tech industry, having a good understanding of intellectual property laws and contracts.
If you operate a service company, marketing agency or insurance firm, you will want to have a business lawyer who understands both the “business” but also the “industry”.
If you are a startup, you may want a lawyer for starting a business who can help you with business financing, company incorporation and business licenses and permits.
Just like doctors can specialize in different parts of the body, business lawyers can also specialize in different parts of the business.
What differentiates the best business lawyer from a good business lawyer is that one understands your business lingo, your industry, your business strengths and weaknesses, your business goals and mission and can provide you with concrete legal advice to help scale your business and navigate the complexities of your business environment.
Business lawyer definition
A business lawyer is a lawyer or attorney practicing law in areas affecting businesses starting from business formation, business management, business operations and all the way to the business dissolution and winding down.
There are millions of businesses out there, in countless industries around the world, selling countless products and services and subject to different laws.
Needless to say that “business”, “business law” or “business lawyer” are extremely vast in scope.
There are different types of business lawyers handling different aspects of a business.
In this article, we will look at what business lawyers typically do and what type of cases they handle.
What does a business lawyer do
The best business lawyer for your business is one who understands your business, understands how your industry works, how you operate your business, your risk tolerance and of course, has a legal specialty matching your business needs.
Business lawyers can be involved in any aspects of your business such as:
- Contract law
- Incorporation law
- Real estate law
- Intellectual property law
- Employment law
- Tax law
- Banking law
- Partnership law
- Corporate law
- Securities law
- Sales law
Let’s look at some of the common areas of practice of business lawyers.
Business entity formation
A business lawyer is someone who can help you launch a company, has great knowledge and experience in company incorporation, able to provide legal advice on what type of business entity to form such as a corporation, limited liability company or LLC, partnership or other.
Startups, company founders, business owners and entrepreneurs may tolerate business risk to the extent their personal assets are not exposed to business creditors.
Starting a new business is challenging and can get quite complex.
With the support of the right business lawyer, you can successfully get your business off the ground based on a strong foundation.
Business lawyers able to guide business owners on how to legally structure their business to take advantage of limited liability legal entities, protect their personal assets or even shield their business assets when entering new markets, launching new products or signing a major contract can be highly valuable to a business.
Contracts and contract enforcement
A business lawyer can bring value to your business in contracts and contract enforcement.
They have particular experience and knowledge to review, draft, redline and comment on contracts and provide you with legal support when dealing with clients, vendors and suppliers is a valuable asset to a business.
Businesses sign contracts every day and you want to have an experienced lawyer for a business who can explain your legal rights and obligations (or risk) in simple terms.
A business owner must make a business decision and does not care about theoretical legal considerations but wants to know if a contract is good or not in concrete terms.
To say contracts is to say contract enforcement.
Business lawyers can be invaluable business partners in helping you enforce your binding contracts to protect your business rights, IP and assets.
Proper contractual dealings with your clients, vendors, suppliers, business partners and other stakeholders is crucial to limit your business liability, protect your assets and ensure your rights are well-protected.
Real estate transactions
A business law solicitor may also have great knowledge of real estate law.
Many businesses need to purchase real estate properties, sign a commercial lease (for offices, a manufacturing plant, retail stores, distribution plan or other) or may transact real estate properties in the course of the year.
Many business law solicitors understand the inner workings of real estate law when supporting their business clients.
Intellectual property law
Software companies, service organizations, media businesses, media, design or other businesses dealing with intellectual property, trade secrets and proprietary knowledge will rely on a lawyer who understands intellectual property laws.
Intellectual property laws deal with trademarks, copyrights, patents, industrial designs or trade secrets, whether they should be registered or not, how to protect them and so on.
Many business lawyers master various elements of IP laws representing a crucial area of the law for many businesses.
Businesses must comply with tax laws from their inception all the way to their dissolution.
Business lawyers understanding business taxes will help you navigate complex tax structures are great allies to your business.
Getting the right tax advice can avoid costly mistakes.
You can also work a business to take advantage of tax credits, deductions and take advantage of tax reliefs offered to businesses particularly small and medium-sized businesses.
A business lawyer can guide you on what to look out for, how to keep and organize your business records and what deadlines you should enter in your calendar.
Business asset protection
A crucial role of a business lawyer is to help business owners protect their business assets.
Your business assets drive value to your business.
Valuable business assets can include:
- Intellectual property
- Proprietary information
- Tangible property
- A methodology that you have developed
- Key personnel you’ve hired
- Real estate property you purchased
- Specific types of equipment
With the legal guidance and advice of business attorneys, you will know how to protect each type of asset owned by your business against theft, misappropriation, leakage into the market, from your competitors or any other type of loss.
Not only your business assets should be protected but also you should protect yourself against claims, lawsuits and liability when using your business assets.
If someone is hurt using your company’s equipment, you can face major lawsuits.
A business lawyer will advise you on liability waivers, protection against potential third-party claims or other business stakeholders.
Employment agreement and disputes
Having a lawyer advise you with regards to employment matters, labour challenges and disputes can help protect your business in the long run.
Experienced lawyers will provide you with invaluable legal advice with regards to hiring, firing, suspending, promoting or complying with labour laws.
It’s important to have a solid employment agreement outlining the terms and conditions of the employment contract, compensation, benefits, confidentiality clause, non-compete, non-solicitation agreement and so on.
Companies need internal policies and procedures for managing their employees effectively and respecting applicable laws.
Ongoing business needs
Not only is it important to have a business law lawyer handle your business matters but it’s equally important to develop a business relationship with a good business attorney.
Having an attorney who knows you, understands the intricate details of your business and who can support you in your day-to-day operations and business management is very valuable.
Sometimes, making a business decision is not easy.
Having a savvy business lawyer in your business team will allow you to brainstorm on ideas, get advice from a lawyer’s point of view or help you make difficult business decisions with proper legal due diligence.
Types of business lawyers
In essence, you have three types of business lawyers:
- General business lawyers
- Specialized business lawyers
- Business litigation lawyers
Business lawyers having a general area of practice are those that have a good understanding of different aspects of a business (generalists) but are not specialized specifically in one particular business area.
On the other hand, specialized business lawyers have a very specific specialty or area of focus and may not have a good understanding of other aspects affecting a business.
Business litigation lawyers are specialized in managing disputes, business conflict, dispute resolution, de-escalation of conflict, business lawsuits and enforcement of business rights.
They each have their advantages and disadvantages.
General business lawyer
A generalist business lawyer is great for helping you deal with routine day-to-day business matters, challenges and needs.
You will deal with one person and won’t have to worry about hiring another person and having to explain your company and story all over again.
On the other hand, generalists may not have a specialized understanding of a potential legal issue to give you very focused legal advice.
Specialized business lawyer
Business lawyers having a specialty in a specific area of the business will excel in that area such as IP, taxation, real estate, M&A or other.
However, they are typically more expensive than generalists and cannot support your business in a well-rounded fashion.
You may end up having to hire many lawyers, each in their area of specialty (something that is not optimal for small businesses and many organizations).
Litigation business lawyer
A litigation business lawyer is primarily focused on dealing with business disputes, commercial claims, contractual enforcement, lawsuits, court proceedings, trials and execution of judgments.
Litigation business lawyers have a great perspective on how companies should handle difficult clients, vendors, partners or even internal disputes like shareholder disputes or conflicts between key personnel.
There are different types of business lawyers out there.
Realistically, it’s not feasible for one attorney to handle all areas of a business nor can you work only with specialists.
Running a business is complex, the landscape changes quickly and there are ever-increasing rules, regulations, statutes and other variables to watch out for.
Depending on your business needs, you may need to work with general business lawyers, some specialists and perhaps a business litigation attorney so you can reap the maximum advantage.
Why hiring a business lawyer is important
For many, the idea of starting and operating a business is exhilarating while at the same time very stressful.
On the one hand, you want to start a business and be successful and, on the other hand, you need to plan ahead in case things don’t go as planned.
Your goal is to successfully run a business without risking your personal assets and getting sued to lose your business.
The solution to deal with this dilemma is to find a good business lawyer or small business lawyer to help you navigate the legal complexities of your business.
Business attorneys can be viewed as your business partners.
They can provide you with legal advice with regards to your business operations, contracts, IP, compliance, corporate structure and more in such a way that you mitigate risk.
An ounce of prevention is always better than a pound of cure.
Do I need a lawyer to start a business
Let’s face it, you don’t need to hire a lawyer for everything in your business.
There are a lot of online resources, legal software solutions, business courses and content that you can consult or purchase to help you run your business without having to hire a lawyer.
However, in some cases, you may be better off hiring a lawyer and paying the additional fees.
Hiring a lawyer may be a business decision just like any other business decision.
You should ask yourself if your business will benefit more than the cost of hiring a lawyer.
If the answer is yes, you may want to consider working with a business lawyer.
Startups, entrepreneurs, founders and business owners may consider hiring a business lawyer to:
- Form the right type of business
- Decide where to form a business entity
- Prepare your articles of incorporation or articles of organization
- Set up the company’s shareholder agreement or founder agreements
- Set up the corporate bylaws
- Handle your commercial contracts
- Deal with your employment contracts, complaints and legal issues
- Provide you advice on trademarks, copyrights and IP protection
- To raise money by issuing equity securities or assuming debt
- Deal with investors, banks and venture capitalist
- Handle compliance matters
- Deal with internal corporate governance, board members and board of directors meetings
- License agreements, contracts, commercial agreements
- Partnerships and joint ventures
- Business disputes and legal enforcement matters
There are also cases where you do not need a business law attorney in the short-term for your new business.
Many successful business owners argue that you may be better off finding a lawyer for your company so you have someone sitting on the bench in case you need to consult.
Know when to save money not hiring a business lawyer
Business lawyers are expensive.
Do you need to hire them when you start a business or operate one?
The short answer is no, not necessarily.
However, you need to carefully evaluate the pros and cons of hiring a business lawyer or choosing to save money by doing something yourself or through non-lawyers.
There are certain types of tasks that you can choose to handle yourself or mandate a non-lawyer to handle for you, such as:
- Preparing a business plan
- Preparing a pitch deck
- Choosing your business name
- Getting your own business license
- Applying for a small business loan or other business loans
- Handling your own bookkeeping
- Filing your tax returns
- Applying for your EIN or company Tax ID Number
- Hiring your own employees
- Setting up your payroll
At the end of the day, you may already have some skills and knowledge that you can leverage in your business allowing you to save some costs.
If you can identify low-value tasks that you can either handle internally or outsource to low-cost service providers, you can save yourself a small fortune.
You’ll need to be mindful of what tasks should be given to non-lawyers and what should be given to a business lawyer.
Making the right business decisions is the hallmark of great business leaders.
Selecting how you manage your business tasks and activities and who handles them will have an important impact on your overall success.
How to do business lawyers charge legal fees
Business lawyers, just like other types of lawyers, can offer different types of legal fee structures.
Some business lawyers will be more flexible than others.
Typically, for simple and pre-defined services, you can negotiate a flat-fee.
For more complex transactions or legal advice, the business lawyer may charge on an hourly basis.
It’s up to you to negotiate a fee arrangement that is suitable for you, fits your budget and makes sense for the type of service the business lawyer will render.
Here are some fee arrangement possibilities:
- Hourly rate
- Per diem rate
- Flat fee
- Monthly retainer
- Contingent fee
- Success fee
We all know the hourly rate.
A business lawyer can charge a pre-defined rate per hour.
In other words, the attorney will charge you every time he or she spends time on legal matters relating to your business.
Per diem rate
A per diem rate is a pre-defined rate that a lawyer will charge per day.
With per diem fees, you will pay the lawyer per day of service as opposed to how many hours the lawyer spent on that particular day.
Flat fees are interesting for clients as you can agree on the total fees to pay your business attorneys for the services being rendered.
Typically, when the service is well-defined, such as company incorporation services, lawyers may charge a flat fee for the services.
You may want to make sure you validate whether disbursements, out-of-pocket expenses or other administrative charges are included or not.
A monthly retainer is a fee structure where you pay your company lawyer a certain amount of money per month for routine legal services.
This can be interesting when you know that you will have a certain volume of work to do with your business lawyer.
Contingent fees are typically seen in litigation and lawsuit mandates but can also be possible in business.
A mergers and acquisitions lawyer or a business lawyer looking for financing for you can work on a contingency basis.
If he or she can bring financing or can structure the deal for you, the business lawyer or business law firm will be entitled to a certain percentage of the ultimate financing proceeds.
Hiring a business lawyer
When you are looking for a business lawyer to support you in your business, it’s important to find the right business lawyer for your specific business.
Not all business lawyers are made equal and not all business lawyers will understand your business.
To find the right lawyer, you should ask the business lawyer direct questions and assess the fit with your business.
Here are some questions we recommend that you ask:
- How long have you been practicing law?
- Do you have other clients in my industry?
- Do you have references that you can provide to show the work that you’ve done?
- What is your preferred practice area in business?
- Do you provide support to startups, small businesses, medium-sized businesses or large organizations?
As you ask questions, it’s important to see how the business attorney interacts with you, explains the concepts and uses your business jargon or technical terms.
The better you understand the person, the more you feel you are speaking to someone having experience in your industry and the more you are comfortable that the person has the right experience to support you, then you may have found the right lawyer for your business.
Where to find a business lawyer
There are many ways you can look for and find a suitable business lawyer.
The million-dollar question is how to find the right business lawyer?
In general, here are the different possibilities:
- Contact a business lawyer you’ve dealt with in the past
- Contact a lawyer that you know who can refer a good business lawyer
- Search online for business law firms
- Look at the American Bar Association in the “Hire a Lawyer” section
- Lawyer referral services
To find a small business lawyer, a specialized business lawyer, general counsel or business litigation lawyer, you should first look into your personal and professional network.
Perhaps you’ve dealt with someone in the past or you know someone who dealt with a great lawyer.
If you don’t know anyone or are unable to find someone in your network, the next step is to look into legal directories.
Many legal directories are now online.
Legal referral services
You can consult the lawyer’s associations in the state where you are looking to find an attorney in business law.
For instance, you can consult the American Bar Association’s website for legal referral services if you are looking for the best business lawyers in your budget.
Legal help sites
As an alternative to business lawyers working as a sole practitioner, in a boutique law firm or in a medium-sized or major law firm, you may also opt for legal technology companies offering:
- Online legal services
- Flat fee and low-cost services
- Company incorporation services
- Contract drafting and review services
- Legal advice and consultation services for a flat fee
- A self-serve business contract and agreements drafting tool
The online legal service providers are an interesting option to lawyers in a law firm when you have specific routine requirements and you are looking for a low-cost option for your business.
If you are not interested in working with self-help legal sites, they can refer you to business lawyers in their network showing the best fit with your business.
How to become a business lawyer
To become a business lawyer, you must first apply to go to law school.
To get admitted into law school, some universities require that you pass the LSAT (Law School Admission Test) and achieve a minimum score qualifying you to apply there.
Other universities may not have this requirement.
Once you successfully study law and obtain your undergraduate degree, the next step is to pass your Bar exams.
Becoming a member of the local Bar Association is an essential requirement for you to acquire the legal right to practice law and give businesses legal advice.
Once you complete and pass your Bar exams, the final step before you can claim a business lawyer status is to complete your internship in a business law firm or with attorneys for business.
The internship will give you great hands-on and real-life experience with regards to dealing with business issues, disputes, audits, investigations and you name it.
You will also learn to deal with business stakeholders like executives, startup founders, employees, consultants, partners or others with varying (even conflicting) interests.
You’ll truly know what do business lawyers do once you complete your internship.
Finally, the rest of your business lawyer career is in your hands.
It’s up to you to see how you want to practice business law, in what type of firm or as in-house counsel, generalists or specialists, businesses in what industry, small businesses or international ones etc.
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