What Does a Pennsylvania Business Lawyer Actually Do?

business lawyers

Are Business Lawyers More than an Expense to Your Company?

business lawyer Do you ever wonder what on earth business lawyers actually do?  I bet there are many of you that ponder this question all day.  How can business lawyers be more than an expense you don’t want to pay?  Can a business lawyer be the person you turn to that will assist you in creating additional value for your company?  Many people view business lawyers as someone that serves the sole purpose of resolving a dispute or drafting a mundane contract that just about anyone could do (wrong on both points).  However, as self-serving as this sounds, as a business lawyer, I bring a lot of value to the table and am not just an expense.  I learn about your business, review your contracts, and learn about your other assets and policies.  This enables me to sit down with you and discuss strategies for growing your business.  Growing your business means adding value.  I will also discuss policies you can put in place to help you mitigate risk.  If putting a policy in place results in saving you $25,000 because the policy avoided litigation, that $25,000 is value to your company.  If I had not advised you to put that policy in place, you would have a $25,000 debt.

I could tell you many stories of how business owners draft their own contracts that they pull off the Internet and then trouble comes knocking at their door.  Going to law school really does teach you to think in a different manner.  (Unfortunately, you wind up fighting the habit of writing in a boring manner and try to be yourself.  Okay, no jokes permitted about how anything spoken by a lawyer is boring.  Also, stay awake!)  This means that a contract that is drafted by a good business attorney (which I am ?) is going to include provisions you would not have thought of and are not included in the form you downloaded from the Internet.  One of the things I do when drafting or reviewing a contract is to think of how my client can get screwed in the transaction and draft language to help avoid my client finding their business in a bad situation if a dispute arises.  This is value.  You will understand the value if you don’t use a business attorney and must spend a lot of money to fix a situation that never would have occurred if you involved a business attorney at the outset.

 You have Survived the Startup Phase, So Now What?

You’ve passed through the startup phase of your business… and managed to survive through some amazing alchemy of hard work, luck, good timing and commitment to a vision. It hasn’t been easy, and you’ve hit uncountable obstacles along the way (hopefully with a business attorney giving you guidance along the way). But now that you’ve gotten a small amount of breathing room, it’s time to actually take that breath and think about how you’re going to get to the next level.

To do what needs to be done—lock down your intellectual property; cement partnerships with clear agreements; anticipate and prevent employee drama; identify risks that could destroy what you’ve worked so hard to build—you need an intelligent business law attorney by your side.

The Following Agreements Can Be Critical to Your Business

The cost to have business lawyers draft these agreements will more than pay for itself with the money you will have to spend if you are not properly protected by an agreement.  KHNETIC Legal does most of its agreements on a fixed fee basis and it is not as expensive as you have probably envisioned in your nightmares.  I have seen businesses spend so much that would have been unnecessary if they had an attorney providing guidance.  It truly bothers me to see something that could have easily been prevented.  Seeing anyone get taken advantage of gets my juices flowing.

  • Nondisclosure Agreements  a contract where parties agree not to share confidential business information with anyone outside of the agreement. This can protect valuable trade secrets of your business.  Can you say, “value add?”
  • Non-solicitation Agreements – when a party agrees not to try and “steal” clients or employees for their own benefit.  As a business owner, you have spent money acquiring customers or clients and training employees.  Not having agreements that prevent you from losing those customers or employees is throwing your money out the window.  You will have to spend MORE money acquiring customers and clients and training employees.
  • Noncompete Agreements – a contract that says an employee can’t leave and start a similar business or work for another company that is in the same business. For example, let’s take the example of an employee who is a salesman for a company that makes pools.  A non-compete, that is correctly drafted as far the term and the geographic scope could prevent that employee from going to work for another company and selling pools for them.
  • Founder agreements – These should be drafted when starting a business to define roles and responsibility and allocate ownership and ensure intellectual property is actually owned by the business and not one of the founders. It is critical that the company own the intellectual property.  There are many times where a patent or trademark application is filed under the name of one of the founders.  If this intellectual property is not transferred to the company, a potentially valuable asset of the company may be lost.  Remember, when the time comes that you want to sell your business, you want the company to own that valuable asset that will make your company worth more to a buyer.
  • Shareholder Agreements – These exist among shareholders and a corporation. They specify dispute resolution processes, protect shareholders, set forth information regarding shareholder meetings and issues that require shareholder approval, address selling stock to additional potential shareholders, set forth the process for dissolution, deal with restrictions on transfers of shares, as well as the process to rights of first refusal regarding the transfer of shares.
  • Operating Agreements – These are similar to Shareholder Agreements, except they are among members and a limited liability company. They deal with capital contributions by the members, define how distributions will work, deal with the management of the limited liability company, define the business rules, policies and procedures of limited liability companies, set forth the process for admission of new members, as well as define how the capital accounts, which reflect the ownership of the owners, are structured.
  • Independent Contractor Agreements – These allow you to hire people on a contract basis, instead of engaging them as an employee. Business lawyers will make sure you classify workers correctly.  Many businesses get in trouble because they try to categorize workers as independent contractors when they’re actually employees who deserve overtime and other benefits.
  • Employment Agreements – Before someone starts working for your company, clearly define both your expectations and obligations. Employment agreements should contain confidentiality provisions, state that any work product produced by the employee belongs to the employer, contain non-competition and non-solicitation provisions and set forth any post-termination obligations of the employee, such as providing assistance in transferring intellectual property to the employer.
  • Consulting Agreements – These spell out what services a consultant will provide, the duration of the arrangement, the nature of the deliverables, and the process if someone breaches the contract.

Growing Your Business Through the Acquisition of Another Business

Leverage is the name of the game, but with expansion comes risk. When you buy assets, you must finance correctly and manage/operate them intelligently. Legal due diligence is essential. You need to understand the business in great detail before you spend money on it. You also need to have an acquisition agreement that is drafted by a business lawyer.  Please don’t do this on your own.  I say this to save you the potential headaches you could have if the transaction is not thought out correctly from a legal perspective and you get the best protection you can.

Growing Your Business Through Joint Ventures

You are an entrepreneur and it is in your blood to keep reaching for the sky and continue to grow.  There may be opportunities to partner up with another company to expand your customer or client base, or expand what your business can offer, which can help both parties grow their businesses.  To get the value you want from such an arrangement, engage KHNETIC Legal to draft a joint venture agreement.  Business lawyers have the experience to know what needs to be addressed in the agreement that you may not have thought about.  It is always better to get the agreement in writing.  You will avoid potentially costly disputes down the road.  While it may feel like you are spending money on legal fees and you would prefer to spend your money on something else, there is real value business lawyers bring to your company.  Not only will they save you from costly legal disputes, but they are used to working with companies to strategize on ways to grow the business.

You Want to Sell or Hand Over the Reigns to a Successor

Many owners sell their business as part of their retirement plan or the value of the business has increased greatly, so it makes sense to exit. The right business attorney can help you evaluate what your company is worth, structure the sale and help you partner with the right firm to find qualified potential buyers.

Your lawyer can prepare a confidentiality agreement for prospective buyers to sign before accessing due diligence materials. That way, buyers can only use the information they receive for the purpose of evaluating the sale.

Your business lawyer will also know what the acquisition agreement should contain and advise you on the structure.  This is not a DIY project!

You Need to Clarify Your Risks

As former U.S. Secretary of Defense Donald Rumsfeld once noted, in life (and in war), there are the knowns, the known unknowns and the unknown unknowns. U.S. and Pennsylvania business laws and regulations constantly change—as do your obligations. Where are your areas of greatest exposure? What risks have you assumed without exploring better ways of doing things? What are the worst-case scenarios, and how should you balance your need to tread with care with your need to grow/take careful chances? A knowledgeable business lawyer can answer these questions and keep you feeling calm, in control and clear-headed.

You Need to Accelerate Growth

What’s constraining your potential? Are you spending too much time on low-level tasks? Is your pipeline gummed up because no one has a clear understanding of “this is how things are done here”? What new people, new systems, new opportunities and new investments must be made to get you to your growth goals? Every business works better with detailed policies and procedures in place. Effective business lawyers cannot only help you handle the particulars—draft agreements, help you draft your policies and procedures so business runs like a well-oiled machine, vet properties before you buy, etc.—but she can also collaborate with you on the high-level strategic pieces.

The Right Attorney Accelerates Growth, Eliminates Obstacles and Gives You Peace of Mind

KHNETIC Legal can help you grow your business; ensure that you have the right policies and procedures are in place; resolve disputes; create clear and necessary agreements; finance projects smartly; and much more. My goal is to free you up to concentrate on growing your core competencies and do the work you love doing—the stuff that makes being an entrepreneur worth those long hours, the constant worrying and the fire-fighting. Contact KHNETIC Legal today—we’d love to help you realize your vision.

 

 

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