Globally, people launch an average of 100 million startups annually. These startups give them an opportunity to succeed independently. In some cases, the primary motivation for entrepreneurs is expressing their talent or pursuing their passion. Regrettably, a significant number of startups fail during their first years of operation. For example, CB Insights reports that 70% of tech startups fail within 20 months. It revealed that 97% of crowd-funded companies fail within this timeframe as well. The reasons for such failures are numerous. They include liquidity problems, inexperienced staff, and inaccurate assessment of market conditions. Another one is failing to seek the advice of an attorney. Here are 3 reasons every new business owner should consult a lawyer.
1. Protect Your Interests
Businesses protect their interests in various ways. One of them is signing contracts with their stakeholders to ensure that these stakeholders act within a defined set of parameters. They also file documents with the government to protect their intellectual property. Unfortunately, the creation and enforcement of these documents is a highly technical process. For example, contract papers are full of legal jargon and court procedures are exasperating. Talk to someone who understands these terminologies and procedures. More specifically, consult a lawyer who will make sure that every clause in your contract is favorable to your business. The filing of patents, copyrights, and trademarks should be flawless as well so that your intellectual property rights are secure.
2. Avoid Unnecessary Litigation
Businesses face numerous challenges when they are in their infant stages. These challenges include the cost of purchasing stock, advertising, and repaying loans. Other difficulties that startups experience include the charges they incur for paying permit fees and hiring equipment. Adding the cost of litigation to these expenses would cripple a new business. That happens because litigation leads to the redistribution of resources in the business. For example, hiring a defense attorney becomes necessary if someone sues you. Consulting a business lawyer as your business starts helps you avoid these scenarios. For example, attorneys can warn you about ambiguous clauses in your contracts that may lead to endless litigation. They can advise you on the legality of certain acts so that you are on the right side of the law at all times.
3. Facilitate Business Processes
Startups are more active than established business are because they are setting up the systems that will guide them in the future. Unfortunately, mistakes are likely during such an active stage in the company’s lifespan. For example, something might go wrong with your registration process hampering your operations. Hiring workers takes time as well because you have to acquaint yourself with the laws that govern this process. Additionally, applying for permits may be frustrating if you have never applied for them. Attorneys are helpful in these circumstances because they have done it several times. Consequently, they know what you should do, how you should do it, and when you should do it. Talk to a qualified lawyer today from LegalZoom and he will they will share this knowledge with you.