Many businesses, particularly small and growing business, are worried about the cost of attorneys’ fees and, as a result, choose not to hire legal counsel. This decision often proves very costly, however. The time to seek legal counsel is before any problems, such as a lawsuit, develop. Once a lawsuit is filed, the costs of defending the lawsuit can add up quickly and can become a huge drain on a business, sometimes even forcing the business to shut its doors permanently. Savvy businesses seek out legal counsel prior to any major issues developing. A business attorney can help a business protect itself from potential litigation by making sure that the business is properly formed, in compliance with laws affecting the business, and negotiating and drafting contracts with favorable terms on behalf of the business.
The Importance of Legal Counsel at the Business Formation Stage
A good business attorney is essential to anyone looking to start a company. At the outset, there are many different ways to form a business. A business could be a corporation, a limited liability company, or any one of a number of other types of entities. Each type of entity has a different structure, making it important for anyone starting a business to choose wisely. A business attorney can advise on choosing the right entity.
Once a business owner decides what entity to form, it is important that the owner protects himself or herself from personal liability by setting up the entity correctly. A business lawyer can ensure that the owner has protections in place by drafting and filing the appropriate formation documents. In addition, counsel can draft corporate bylaws and operating agreements for limited liability companies. These documents create the “rules” of the entity and include important information regarding its structure, management, liabilities, capital contributions, distributions to owners, tax issues, and provides a roadmap of what happens if the business shuts down.
How Business Attorneys Can Help Existing Businesses
The new law prohibits employers and recruiters from screening job applicants based on their current or prior wage and salary histories, including benefits and other compensation. Specifically, under the new law, an employer may not require that an applicant’s wage or salary history satisfy minimum or maximum criteria. In addition, employers and recruiters may not request wage or salary history from a job applicant as a condition of the applicant’s consideration for employment or as a condition of employment.
Further, employers and recruiters may not ask a job applicant’s current or former employer for the applicant’s wage or salary history, including benefits or other compensation. The only exceptions to this prohibition are: (1) if the job applicant’s wage or salary history is a matter of public record or (2) the job applicant is currently employed by the employer and is applying for a position with the same employer.
Actions Permissible under the Illinois Equal Pay Act
In addition to helping with formation of the business, attorneys can also help businesses with obtaining and maintaining required licenses and registrations. At the state level in Illinois, a business usually must file ongoing reports with the secretary of state. In addition, many local jurisdictions require businesses to register or obtain a business license. Some businesses must obtain other licenses for their specific type of business. The requirements for registration and licensing vary greatly between jurisdictions. As a result, it can be difficult to navigate through all of the requirements to obtain a license without the assistance of counsel familiar with licensing.
Business attorneys can also help ensure that a business is in compliance with labor and employment laws. Business lawyers can draft employee handbooks, which lay out company policies for employees, managers, and executives in a way that makes expectations clearer, enforcement easier, and reduces the burden on human resources. A good employee handbook requires skill in its drafting and is tailored to the business’s specific needs and culture. Business lawyers also can draft employment contracts, including drafting important provisions like non-compete clauses, non-solicitation clauses, and clauses protecting the business’s intellectual property and confidential information from disclosure by an employee.
An established relationship with a business lawyer is also a great resource for businesses when they have quick legal questions or get served with something “routine” like a wage deduction summons for an employee who has a monetary judgment against him or her (e.g. child support). In such a situation, there are specific rules that a business must follow in deducting the employee’s wages and, if not done properly, a business could easily end up having a judgment entered against the business for the amount owed by its employee. Having an ongoing relationship with a business attorney can provide a business with a valuable resource so it is confident that whenever something “minor” comes up, it already has a trusted resource in place.
There are a number of contracts and other agreements that require a business attorney’s skill and expertise. Most businesses will need a physical space to run the business, which likely requires the business to either lease space or purchase it. Commercial lease agreements are almost always drafted in favor of the landlord and, if not careful, a business easily could end up getting stuck in a bad lease for many years. Attorneys have substantial experience negotiating and drafting leases on terms favorable to their clients and can help businesses avoid getting stuck in a bad lease. Similarly, if the business is purchasing real estate, an attorney can help review and draft required documents that need to be completed. Besides real estate, business attorneys can also help draft and negotiate a number of other important contracts, such as vendor contracts and supply agreements.
When All is Said and Done, a Business Attorney is a Good Investment
Many times small and growing businesses worry about the cost of hiring a lawyer and wait until they are sued to do so. However, when the sheriff is standing at the door with a summons it is often too late. The business could become mired in litigation, which is both time-consuming and expensive. Litigation is disruptive to business operations and, sometimes, is so costly that the business ends up having to shut its doors.
By contrast, having a business attorney in place prior to litigation often prevents some avoidable major problems from arising in the first place. The cost of hiring an attorney before problems arise is often far more economical than litigation. Business attorneys are an excellent resource for any business and can help protect the business in a variety of ways, including formation, drafting contracts, and ensuring compliance with federal, state, and local laws.
For more information about this article, or to find out what a business attorney can do for your business, contact Albee Law PC via telephone at (312) 279-0115 or by email at info@albeelaw.com.
