Into The Trenches: Ten Simple Rules from a Business Lawyer

Amilya Antonetti on Lucky Napkin General Legal Gay L. Harwin, Esq.:

How often do we say to ourselves as we head out on the journey of being an entrepreneur

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that we will hire a good attorney once we start making money?

Well, that is what I told myself many many years ago just to find out the painful truth and expensive lesson: if I would have hired the attorneys in the beginning it would have saved me oodles of time and money. However, finding the right attorney can also be like trying to find a "soul mate."

You usually don't find the right one on the first try.

I met Gay years ago, and slowly over time, she has helped me manage more and more of my business and personal life. Her advice, before I go charging off in a direction or mission, is critical to the eventual outcome. Gay has become much more than my attorney, she has become a trusted friend, a mentor and confidant as I travel this journey.

I asked her to please share her top 10 tips to keep in mind before one charges ahead!


INTO THE TRENCHES:
TEN SIMPLE RULES FROM A BUSINESS LAWYER KNEE-DEEP IN THE MUD

1.) Lawyer Up - Hire a good, experienced attorney. Building a business without good legal counsel is like building a fifty story skyscraper without a structural engineer.

2.) Protect Yourself From Personal Liability - Consider protecting yourself from personal liability by forming a corporation or limited liability company to own and operate your business. If properly formed and maintained and in the absence of personal guarantees, the corporation or limited liability company (and not you, personally) will be responsible for the debts of your business and your personal assets should stay well outside of the reach of creditors.

3.) Protect Yourself Even More: Use Insurance - While we are on this issue of personal liability, find a reputable insurance agent and discuss with him or her exactly what insurance is available to protect both you and your business against liability. Then, buy it.

4.) Read the Fine Print - Let me say that again: Read the fine print. You’ve heard this before, but there’s a reason. We lawyers like to say that the deal is in the details and we are right.

5.) Avoid Personal Guarantees - Having said this, the reality is that sometimes it is just not possible to get by without personally guaranteeing some obligation, be it your office or copier lease. If that’s your story, try to negotiate some limitation on the extent of your liability. For example, consider a cap on your financial exposure and/or limit your guarantee to a fixed number of years.

6.) Don’t Buy Into the "Boilerplate Myth" - Speaking from experience, “boilerplate” is just another way of saying “cut and paste job”. Sometimes boilerplate provisions can be relevant, sometimes not. However, I can assure you that, most likely, buried in the “boilerplate” are clauses that do not apply to your deal and may, in fact, be detrimental. In a perfect world, have your lawyer draft your documents.

7.) The Pre-Printed Form is Not Sacred - Just because you are presented with a pre-printed form does not mean that the conversation is over. Some or all of the terms contained in that form just might be negotiable. With this in mind, refer to Rule #4 and Rule #6 above and then, refer to Rule #10 below.

8.) Negotiate Where Appropriate - Success is about win-win. Make this your mantra. Now, repeat this mantra as you suit up to negotiate your deals. In other words, be judicious (pun intended) in your negotiating. Focus on the points that are critical to your success. Don’t spend psychic energy fighting for the little things and lose sight of the big picture.

9.) When You Sense Trouble, Get Help - Don’t wait until you can see the whites of their eyes. Many business problems can be resolved in the early stages. However, the longer you wait to address an issue, the more warts it will grow and the more expensive it will be to resolve. Early intervention, legal and otherwise, is time and money well spent.

And, last but not least:

10.) Don’t Pretend to Know - Ask questions of your lawyer and anyone else with a pulse. Knowledge is power. Now is not the time to be shy.

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This article was written by Lucky Napkin General Legal Gay L. Harwin, Esq. For more information on Lucky Napkin and how they help grow and develop small businesses, visit their website!