Essential Legal Issues Business Attorneys Handle Daily
Operating a business without legal help is like building a house on sand.
Business lawyers work behind-the-scenes at every successful company — from scrappy startups to multi-billion dollar enterprises. They are problem-solving day in and day out to prevent lawsuits that could literally shut a business down overnight.
Here’s the thing…
Many business owners don’t think about hiring a business attorney until it’s too late. After the police are at their door. Once an employee sues for wrongful termination. Or a supplier decides to file a lawsuit over non-payment.
12 million small businesses are sued every year.
It’s not a risk most businesses can afford to take. But by knowing the kinds of legal issues business lawyers handle every day, you can head most lawsuits and costly business litigation before they happen.
In this article, we’ll cover:
- Business Formation & Structure
- Contract Law
- Employment Law
- Intellectual Property
- Regulatory Compliance
- Business Disputes & Litigation
Business Formation & Structure
The first thing many business lawyers assist with is making sure you incorporate a business properly.
Business lawyers guide business owners through the incorporation process to select the best legal structure for their needs. Whether it’s an LLC, S-Corp, C-Corp or sole proprietorship, business lawyers ensure everything is set up correctly from day one.
Why does this matter?
Because if you don’t establish your business correctly at the onset, you could be opening yourself up to personal liability if your business gets sued. Or it could cause you major tax issues down the road. Or make it difficult to raise investment money.
Business lawyers look at your long-term business plans, number of owners, tax considerations, and more. Then recommend the best course of action for your specific situation.
Having a business lawyer handle your business formation lays the groundwork for your business. Get it wrong and you’ll be playing catch-up with legal and accounting issues for years to come.
Contract Law
Contracts are the foundation of every business transaction. But when they’re drafted incorrectly, that’s when you run into problems.
Business lawyers draft, review, and negotiate contracts on a daily basis. Things like:
- Vendor agreements
- Supply agreements
- Client service contracts
- Partnership agreements
- Shareholder agreements
- NDAs
- Commercial leases
The issue most entrepreneurs come across:
They use generic contracts found online. And while those templates might look fine in most situations, they don’t take into account variations in state laws and industry specifics.
This can’t be stress this enough. If you don’t have a business lawyer review your contracts, you may be signing yourself into a liability you didn’t know existed.
Once someone decides to sue over a contract dispute, you’ll wish you had a lawyer review it beforehand. Contract disputes account for 46% of all civil filings in State Courts.
Business lawyers help businesses avoid contract disputes from happening in the first place. And if a dispute does happen, business lawyers negotiate on their clients’ behalf.
Employment Law
The second your business hires its first employee, you open yourself up to countless employment law issues.
Employment lawyers help businesses with anything related to employees. Including but not limited to:
- Employee handbooks
- Employee contracts
- Wrongful termination claims
- Employee harassment claims
- Wage and hour disputes
Needless to say, employment law issues can come up in small businesses and large corporations. In fact, 47% of organizations experienced an employment or labor dispute in 2023.
Employment laws are always changing. Remote work policies, non-compete agreements, and classification of gig workers are just a few of the hot topics affecting employment law now.
Business lawyers keep their clients ahead of employment law changes by providing preventive law, so their clients don’t have to.
Intellectual Property
If you built your brand from the ground up, it’s likely you have intellectual property (IP) worth protecting.
Business lawyers help businesses protect their intellectual property daily. From:
- Trademarks
- Copyrights
- Trade secrets
- Patents
The part most entrepreneurs don’t realize…
They already own intellectual property and don’t know it. Business lawyers will perform an IP audit of your business to uncover any existing IP. Then, help you protect it from competitors and ex-employees.
Intellectual property theft is one of the most expensive civil litigation businesses face. If your biggest competitor stole your trademarked logo and started selling their product as yours, how much revenue do you think you’d lose before you caught them?
Here’s another:
If one of your former employees takes your client list and heads off to work for your competition, how much business do you think they could take with them? And how long would it take you to realize your customers were gone?
Regulatory Compliance
Running any business comes with rules and regulations. Some you’re likely aware of. Others not so much.
Business lawyers help clients comply with local, state, and federal regulations. Things like:
- Licensing requirements
- Data privacy laws
- Environmental laws
- Consumer protection laws
- Zoning laws
This is important because:
Running afoul of government regulations can cost you more than a hefty fine. Some violations can cause you to lose your business license. Or even land you in a federal investigation. The damage to your reputation would be devastating.
Business lawyers help businesses minimize the risk of regulatory exposure. By knowing the laws inside and out, business lawyers can identify potential compliance issues before they happen.
This is especially true in industries like healthcare, finance, and food and beverage. Businesses in these industries require a lot of regulatory support to stay compliant.
Business Disputes & Litigation
No matter how well you run your business, disputes are inevitable.
Business disputes come in all shapes and sizes. Partnership disputes, customer disputes, trade secret disputes. Business lawyers resolve these disputes on a daily basis. Common services include:
- Sending demand letters
- Filing lawsuits
- Representing clients in mediation and arbitration
- Negotiating settlements
- Litigation prevention
Believe it or not, most seasoned business lawyers will tell you that the best lawsuit is the one that never happens. Because the earlier you can bring a business lawyer into a dispute, the more money you can save in the long run.
And most business lawyers will offer some type of litigation prevention advice to their clients. They know that if they can head off a legal dispute before it happens. Both parties save time, money, and unnecessary stress.
Final Thoughts
While many clients think of business lawyers as only being for large corporations, that’s simply not true.
Every business, no matter how large or small, runs into legal issues on a daily basis. From when your business is formed. To every employee you hire. Every contract you sign. Every state you expand to.
There’s legal risk sprinkled throughout your entire business journey. And the smartest business owners know this. They retain a business lawyer right when their business is formed. To ensure they have a strong foundation that can withstand whatever comes their way.
Here’s a recap of the types of issues business lawyers help everyday:
- Business formation & structure
- Contract law
- Employment law
- Intellectual property
- Regulatory compliance
- Business litigation
