You’ve built your business from scratch, or bought an existing business or franchise, or worked your way up the ladder to lead your family’s business. Along the way, you’ve likely had some level of involvement with a business attorney in getting your business going. But just because the contracts are signed and you’re now in charge and free to go work and grow your business, that doesn’t mean you won’t benefit from an attorney’s ongoing involvement and support.
As a member of your professional team, your business attorney can be instrumental in guiding the health and growth of your company. With a strong business perspective, your attorney can be especially valuable as both a “strategic partner” and a “legal technician.” Beyond identifying legal issues of risk and liabilities, your attorney will also assist in negotiating the terms of contracts that will arise in your business.
Dealing with the Legal Complexity of Contracts
Throughout the life of your business, from creation through your exit, there will be opportunities for growth and expansion that require the drafting and negotiation of contracts. Your attorney will tell you that an effective contract is more than just offer, acceptance, and consideration.
Many contracts may be complex, may involve multiple parties, and the work to be done may cross state or international borders. There may be jurisdictional nuances which involve laws specific to the geographical areas in which you are asked to do business. And then there is the “boilerplate” language in contracts, often at the end of an agreement under titles such as “Miscellaneous,” or “General.” These provisions are important because they affect how disputes are resolved and how a court will enforce the contract, but often business owners tend to gloss over these sections based on a belief that they are “standard” and not really all that important. Your attorney will know how these provisions may operate as a benefit or detriment to your business, and how to adjust them to be in your favor, or at least neutral.
Leveling the Playing Field
Companies and vendors larger in both financial strength and business size often approach smaller companies with “non-negotiable” contract terms to do business. While the associated opportunities may benefit your business’ bottom line, adverse contract terms may limit, or even eliminate, that benefit. Your attorney can help you understand the meaning and import of the contract terms, and so can help you understand the risks of proceeding with the agreement so that you can make a more well-informed business decision. And sometimes “non-negotiable” isn’t really “non-negotiable.” Having your attorney involved in the discussions with the other party can help to level the playing field and allow you to negotiate a revised and more fair agreement where both parties benefit.
Translating the “Handshake” Deal
Oftentimes business owners will reach conceptual agreement on the business terms of a deal but then want to reduce the agreement to writing in a contract. Your business attorney can help translate your “handshake deal” into a legally binding contract that addresses the business terms but also provides appropriate legal protections for you. Your attorney will have a knowledge of contract drafting “terms of art” (words, phrases, and “jargon” that may have a precise and understood meaning within the realm of contract drafting and interpretation, and perhaps in your particular field or profession). For example, “representations and warranties” and “indemnification” are terms of art in used in many business contracts and need to be used and understood properly if you are to receive appropriate legal protection (and avoid unacceptable legal risk) from their use. Your business attorney can translate your conceptual agreement into a legally binding contract that addresses both the business issues and the legal issues and protections that will position you to more fully benefit from your “handshake deal.”
Honor Your Attorney’s Perspective
Don’t forget that your attorney’s perspective will and should be different from yours. You are rightfully focused on business opportunities and business issues, but that focus and your entrepreneurial risk-taking spirit can sometimes cause you not to see or properly evaluate risks and downsides. Your business attorney will help you avoid seeing opportunities through “rose-colored” glasses. The attorney’s role is not just to be a cynic and skeptic, but to point out for you the risks and liabilities inherent in business opportunities so that you can properly weigh them in your decision-making.
Legal Costs: The Reality vs. The Perception
What about the cost of keeping an attorney as part of my business team? Good attorneys are not cheap, but neither are other consultants critical to your business’ success. A brief consultation with an attorney can help you better determine your business’ legal needs, or help you avoid contract pitfalls that could cause you harm far in excess of the corresponding legal fees. Compare the investment of an attorney’s time to preventive maintenance and think of the difference between the cost of an “oil change” vs. an “overhaul.” Involving your business attorney earlier on in a business transaction or business contract review and negotiation could mean the difference between spending hundreds or thousands of dollars on legal services now and avoiding a potential future problem, or spending tens or hundreds of thousands of dollars later when that otherwise avoidable potential problem has ripened into a harsh reality.
In closing, don’t underestimate the role your attorney can play in the growth of your business. Having an attorney with a strong business perspective as a member of your professional team gives you someone who is looking out for your best interests in legal matters, allowing you to do what you do best – run your business!
For additional information on the types of contractual work the experienced business attorneys at Tuesley Hall Konopa do, go to https://www.thklaw.com/business-contracts/.
Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation.
