Every small business needs an attorney; common sense is not enough…

I spent the first 35 years of my professional life working for corporations, both as a major account manager (Boeing, Weyerhaeuser, etc) and a sales manager. I managed sales people calling on company executives trying to sell technology. The companies I worked for had specific policies and procedures and in-house legal counsel. We used standard contracts and license agreements and we knew what we could and couldn’t say and do, because the corporation continually trained us on these things. With all this training we had our attorneys involved in two out of three deals in one way or another.

When I entered the world of small business I felt if I just exercised common sense I would not need an attorney? I became a real estate agent three plus years ago and a year ago I became a broker, and started my own company. Before I became a Broker and started my own company, as an agent I asked my broker whenever an issue came up, he often told me things I would not tell an agent or a client after getting an attorney. Not because they are not correct, they probably are, but because I am not an attorney.

In my opinion every small business needs an attorney for two reasons. First is to help them set-up their legal entity, sole proprietorship, corporation or LLC. Second they need an attorney to consult when there are legal issues around contracts.

When I received my real estate broker’s license I had to make a decision on what type of company I was going to be; a sole proprietorship, a corporation or an LLC. Each of these has certain legal characteristics and after doing a lot of investigation on the web I decided paying attorney to get expert advice was a good decision. In under an hour I got an education on the pluses and minuses of each type of legal entity and more. The attorney made me aware of a number of legal pitfalls for a real estate company and what I should and shouldn’t do. He told me I was just like other real estate companies including the big box stores, Windermere, John L Scott and Re/Max, the only difference is they have thousands of agents and I have just one – me. As a real estate company and a Broker I face the many of the same legal issues the big companies face. The money I paid was well worth it and I would not hesitate to do this again. Knowing how to provide a high level of customer service and do this legally was worth every dollar I paid.

If you as a small business deal with the public and you go to their business or home, have them come to your business or home, provide products and /or services, you need to decide what type of legal structure is best for your business and you need to make sure you are helping your customers and protecting yourself.. Only an attorney can help you with these tasks.

The attorney helped me set-up a standard process where I do the same things each time I meet a potential customer. I now provide each potential customer the “The Law of Real Estate Agency” (required by Washington state law), a list of my services and a list of local resources that includes contractors, house painters, house cleaners, lenders, insurance agents and an attorney. The attorney is on the list because my Washington Realtors attorney said it was a great idea and provides potential clients with a valuable resource if they feel they need an attorney and don’t know one.

As a business owner and licensed real estate Broker I now use an attorney often. In fact I became a Realtor specifically because they have an attorney on retainer for members. I can both call and email this attorney and she is very good at providing an answer quickly.

It is in everyone interest to do things legally and all business people try to do just that. But we are not attorneys and we need legal help from time to time. I have a friend who does consulting at $1,000 a day plus expenses on two software packages and uses a standard consulting agreement. In almost every case the client makes some changes to the agreement. He never considered having an attorney look at these changes before he accepted them until he got into a dispute with a customer and was sued. He read the changes the customer made to his agreement and felt he had complied with all of them. Later his attorney said a few words written into the agreement by the customer when interpreted in legal terms could mean he probably did not. My friend provided this customer with one additional week of consulting for free to settle the case. This made him a true believer and it reinforced my feeling that attorneys provide a valuable resource for everyone in business.

My friend says he was, “Penny wise and pound foolish.” His attorney costs him $200 per hour and is available in person, by phone, by fax and email. He now pays his attorney a flat fee annually that provides him with up to 10 hours per year of legal consultation. His attorney reviews all changes to his consulting agreement before he signs. His attorney knows him and what he does. His attorney has all his contracts and other agreements and can easily provide answers to any legal questions.

My attorney works for the Washington State Realtors Association and I have access as a part of my membership, but if I didn’t I would retain an attorney and pay the fee gladly. I don’t drive without car insurance and I wouldn’t run a business without access to legal advice. In this complex business world using common sense isn’t enough. We all need the services of an attorney.