Many entrepreneurs (from high net worth individuals to "mom and pop" small business owners) fear calling a lawyer for the same reasons they sometimes hate jumping in a cab in a foreign country. They don't often do not know where their final destination is located, they do not know the what route is going to be taken to get there, and they are unsure about how much the cab driver is going to charge them for the drive.

Comparing lawyers and foreign cabbies may be a bit much, but this is one thing is certain: Legal advice and guidance in varied forms is absolutely crucial to the start-up, management, and survival of any small business. In other words, your business will invariably benefit from your involvement with an attorney at every step of the way.

Yes, you will have to pay the fare, but using an attorney doesn't have to be a burdensome financial drain. No-one says that hiring an attorney is cheap, but remember two things: 1) You really do get what you pay for; and, 2) As Benjamin Franklin once said (and as many of my clients find out sooner or later), an ounce of prevention really is worth a pound of cure - and then some.

Just having the attorney, and access to his or her "rolodex" of other professionals such as CPA's and financial consultants, allows you to easily and efficiently outsource many of the headaches associated with running a business in today's complex environment.

As promised, here are five good reasons to have a lawyer on your telephone's speed dial:

1. You're starting a business. Far too many people get their businesses up and running before contacting an attorney for legal guidance. Don't make this mistake. Before you take in your very first dollar, hook up with an attorney to review business structures, business plans, legal ramifications, tax consequences, financial considerations and other elements designed to protect your business and help it flourish. You should also make sure an attorney reviews or drafts every contract you use in your business, both with customers as well as suppliers. Unfortunately, we live in a litigious society. Therefore, it is imperative that you define and protect all of your business relationships through the use of written contracts and other legal instruments. If you are going to hire employees, you should have an attorney advise you on all aspects of the employer-employee relationship, including the development of written policies, procedures and employee handbooks.
2. You plan to charge money for your goods and services. Cash flow is king, and as money becomes tight in a down economy, it can become more difficult to collect what you are owed. An experienced attorney can advise you on suitable collection methodology, options and resources for paring down "accounts receivable". Collection agencies are expensive in more ways than one. First of all, many charge large contingency fees based on a percentage of what they collect. This could range as high as 50% or more of amounts collected. Secondly, there are collection agencies out there that will do anything they can (legal or not) to collect a debt and collect their fee. This could put you in hot water with both your customers and the Federal Trade Commission (FTC).
3. You need to resolve a business dispute. Business disputes are inevitable. And as your business grows, so does the probability that you will have a dispute with someone, or something, at some point in time (and usually sooner than later). Just the act of having an attorney who can provide rapid response to any type of threatening situation will show you mean business, and may end up getting you the results you desire. A lawyer can also help you avoid lengthy and costly disputes by helping you with risk management and insurance advice. If you are about to get sued, a lawyer can step in and possibly prevent a costly court battle by recommending some form of alternative dispute resolution such as mediation or arbitration. And finally, a lawyer can act as a tourniquet by keeping what might be a bad situation for you, your business, and your family from turning into something worse. A lawyer can often times help stop the bleeding and provide you with ideas to get your business, and your life, back on track.
4. You are in a position to start reaping the rewards of your success. The time to start planning for your future is right now. An experienced lawyer who is well-versed in estate planning and financial techniques is also essential as he or she can help set up programs to fund your retirement from the proceeds derived from your business and/or personal wealth. They can also assist you in setting up employee incentive plans that can provide tax benefits, goodwill and piece of mind for yourself and your employees.
5. You need a parachute. At some point in time, you are going to voluntarily (or involuntarily) leave your business. It is a simple fact of life. You may sell the business, the business may go bankrupt or otherwise have to close up shop, you may want to retire and pass the business over to your kids or key employees, you may get divorced, or - and this is the worst - you may unexpectedly suffer an injury, illness or pass away. Therefore, it is a good idea to have a lawyer construct and regularly review a step-by-step succession plan to hand off ownership of your business (or a portion thereof) to someone else in the event of a life-changing circumstance. You should also have a lawyer devise a suitable exit plan should your business go under, no matter how well things may be steaming along now. For instance, an experienced attorney can help identify ? and protect ? property and other items that, should the worse happen, are legally shielded from creditors and/or exempt from bankruptcy proceedings.

By: David R. Calderon, Esq., Partner