The Importance of Lawyers for Small Businesses
Small businesses in Maryland face a host of potential legal issues, especially in the two year delicate period after a startup is incorporated. Without the right legal support, Maryland lawyers might not be able to spot them all, and this can put your company at risk. Cook Attorneys, LLC provides business law advisory services so that our clients can focus on their business knowing their legal matters are referring done to a competent lawyer at our firm.
Sometimes it’s not obvious why a business might need legal support. Aside from the most basic employment and incorporated company matters we discussed previously, some other things you might need a lawyer for include:
- Partnership agreements , including buy-sell agreements in the event of a partner’s death or incapacitation.
- Franchise agreements, including navigating any agreements with parent companies and with service providers.
- Commercial leases, especially for retail tenants and franchises.
- Employment agreements, from front-line employees to executives.
- Licensing agreements for software, intellectual property, trademarks or patents.
- Non-compete agreements, especially for pursuit of angel or venture capital funding.
In addition to being able to identify legal issues so that they can be resolved early, with a strong corporate advisory team, Cook Attorneys, LLC helps you think through contractual obligations in plain language so that you can make better business decisions.
Essential Legal Services for Maryland Small Businesses
It’s important for small business owners to understand all of the potential ways a lawyer can help their business. Many people think a business lawyer is someone who only represents clients in a courtroom. In reality, there are a number of areas where a business lawyer can assist their company without it ever having to go to court. One of the main things a small business lawyer in Maryland will do is help business owners with any contracts they might need. A lawyer can draft contracts, review existing contracts and renegotiate them when needed. The inclusion of an "attorney fees" clause in a contract can provide a business with some protection in case future litigation is set into motion. Small businesses are always going to be looking for ways to grow and develop. However, depending on the industry, there might be regulations that affect how they expand. This is where a lawyer can help while also helping their business stay compliant with the law. For instance, when hiring employees, the company will want to protect itself by having clear, written employment agreements that cover noncompetition, confidentiality and other agreements. Intellectual property is an important part of any business. In the state of Maryland, the firm of SMR Legal has assisted small businesses with intellectual property enforcement. By working with SMR Legal, a business will keep their valuable business information confidential, which can set them apart from their competitors.
Hiring a Lawyer for Your Small Business
Finding the right small business lawyer in Maryland can be the difference between successfully avoiding legal landmines and falling victim to a lawsuit or some other corporate disaster. When people have questions on finding a small business attorney, they often ask me the same questions over and over again. First, I should say that you probably will not go wrong by spending 30 minutes with a larger international law firm niching down to smaller businesses. You get a lot of lawyers for a short period of time during those meetings. Second, I should also note that the Maryland State Bar Association has a list of small business representation specialists. I am one of them.
So, assuming you want more of a niche or local lawyer who can address your specific small business risks without the law firm resources that spin out of control or the costs associated with big law.. Some factors to consider include:
- Your lawyer’s area of practice. Does he or she regularly deal with your business type and the typical issues a business like yours may face? In certain areas of law (such as employment law and other specialized decisions), think about asking if the lawyer views himself or herself as a specialist or a generalist. For smaller businesses in Maryland, the difference can be dramatic.
- Get answers to your questions and explain all of your concerns. Doing this will help you gauge whether the lawyer’s assessment makes sense to you.
- See whether you think you make a good fit with the lawyer and his or her office. Are the staff members professional and courteous? Is the receptionist friendly? How about the junior lawyers in the office? Do they deal fairly with you on the phone and through other means?
- Listen to your gut. If you don’t feel right about that interview with the lawyer, you might be better off walking away.
Compliance with Local and State Regulations
Navigating the complexities of state and local laws is vital for small businesses in Maryland. Many entrepreneurs may mistakenly believe that federal regulations are their only concern, but Maryland has its own set of laws and regulations that must be followed. These include business licenses, tax registration, health and safety standards, and various other local ordinances. For instance, did you know that business licenses can vary by county? By hiring a lawyer with a deep understanding of Maryland and local laws, small business owners can avoid costly surprises.
A good lawyer will not only be able to help you establish your business legally, but will also guide you on how to remain in compliance over time. For example, most small businesses in Maryland will need to apply for a Basic Business License that is renewed annually. There are different requirements for various industries; those that sell alcohol or tobacco, or that provide child care services, have more stringent regulations to follow. A local attorney can help make sure that no stone is left unturned when it comes to meeting the legal requirements.
Compliance is not something that is merely done upon starting a business, but rather must be monitored continually. Rules can change frequently, and businesses are required to stay on top of those changes and report them to the appropriate authorities, such as updating their trade name or waiting time for new employees. Business owners are also subject to penalties and fines by state and local governments, and sometimes even criminal prosecution if they are found to be in violation. That can be devastating to a young company, so it’s important to work with an attorney who keeps a close eye on changing laws and regulations.
A Maryland small business attorney can save you substantial amounts of money in lost time and fees while also freeing you to focus on what you do best: running your business.
How a Lawyer Helps Your Business Grow
A good lawyer can have a great role in helping a company grow its business. Introducing the right deals or making the right connections for companies can really help a company grow. A lawyer that understands what you are looking to accomplish can really help facilitate those opportunities. That lawyer can also help you identify risks involved with any deals you are looking at so that you can make a more informed decision about whether to take the deal or not.
An experienced lawyer can help you determine where you should be focusing your efforts to expand your business. A lawyer often learns about companies and industries through working on projects with lots of companies in the same field. In the process , a lawyer will often identify ideas to help certain clients grow their business if the company decides it is not too risky to do so.
Another place lawyers can help is with internal growth opportunities. If a company is looking to grow internally to make the company better and more successful, a lawyer can often help those efforts. For example, a lawyer may be able to work with you on best practices in documenting projects or helping you to develop better policies and procedures for running your business. A business that is run more efficiently will inevitably grow its work load internally.
Considerations When Hiring a Lawyer for Your Business
Considerations About the Cost of a Lawyer in Maryland
Considerations if you decide to hire an attorney to help you with legal matters for your small business, there are a number of factors that will affect the overall cost. Depending on the type of services you require, the condition of your existing legal documents and more, you must be prepared to spend a different amount of time with your legal team. If you only require some minor paperwork, modifications, or reviews of documents, you may only need to pay for one attorney hour per month. On the other hand, if your business requires the use of an entire or extended team of attorneys, paralegals, and administrative staff, bills can add up quickly. When estimating the cost of hiring a small business attorney or team to manage your affairs, you must consider the exact type of services you require. In general, the costs of contracting with a good business attorney can depend on:
However, you should expect to spend at least $200/hour for the services of a business attorney. To get a better idea about the type of legal fees you can expect for your small business, ask the attorney or firm you are considering to provide you with an estimate, including a breakdown of the work and associated costs. The total cost of hiring a small business attorney will depend on the complexity of the law involved and the amount of research required to render an opinion or draft a document. In most simple matters or document creation, the price will likely be between $200 to $350/hour. On the other hand, complex matters requiring in-depth research, litigation, and many hours of attorney time will cost between $450 and $800/hour. Some niche lawyers and trial lawyers may even charge $900 or more for their services. It is always a good idea to establish a monthly budget on the high side and ask you attorney to perform a monthly cost analysis, so you are not surprised by the bill at the end of the month. According to the Legal Services Corporation, which provides affordable legal assistance to low-income Americans, an average phone or in-person session with a lawyer will cost between $50 and $100. You might also be able to find fixed-fee options for simple tasks like bankruptcy laws, creating and filing articles of incorporation, and completing a trademark application. You should be able to find an attorney who can complete most basic tasks for under $2,000. Larger issues like complex tax or bankruptcy matters can cost you between $5,000 and $1 million. The most expensive option will be general counsel services, which can cost $250,000 or more per year. One of the best ways to budget for the costs of a small business attorney is to hire a firm that charges a single monthly fee which encompasses all of their services. Some of these firms will even cost as much as a typical large law firm, but they will always be available, making the value higher.
Common Legal Issues Faced by Maryland Small Businesses
The primary legal pitfalls facing Maryland small business are typically within the areas of formation, protection of intellectual property, employment matters and compliance with state and local laws. Of course, this is not an exclusive list, and more issues may arise depending on the business and its specific area of expertise.
Formation – In Maryland, it is important to form your business entity correctly. You have several options on how you want to form and run your business. Your typical choices include a sole proprietorship, general partnership, limited partnership, limited liability partnership, limited liability company and incorporation. Each entity type has its advantages and disadvantages and affects taxes, liability protection and business operations. For example, if you have a sole proprietorship, you are personally liable for all of the debts and liabilities and you may incur personal tax liability as well. Some people mistakenly believe that incorporating or forming an LLC will protect personal assets, when in reality this is not the case if the incorporation or formation is not done properly.
Intellectual Property – Maryland businesses need to be aware of copyright, trademark and patent law. Whether your business relies on innovative designs, logos, names, methods or other intellectual property, you should have a plan for how to protect your intellectual property and avoid infringing on someone else’s intellectual property. If you make a product , you may be infringing on someone’s patent. If you use a phrase or image in your advertising that someone else has used, you may be infringing on their trademark or copyright. Working with an intellectual property attorney can help your business avoid common pitfalls that can lead to lawsuits or costly disputes.
Employment – Hiring is a huge responsibility, and you need to make sure that you are complying with all state and federal employment laws when hiring and paying employees. This includes properly classifying workers as employees or contractors, following state and federal minimum wage and overtime laws, withholding the correct amount of taxes from paychecks and making sure that your workplace is free of discrimination, unfair treatment, harassment and other issues. Employment is a complicated area, and the penalties for not complying with federal and state laws can be severe.
Local laws and regulations – Your business may be subject to a broad array of local laws and regulations, including local business licenses, health and safety codes, zoning regulations, fees and more. More than likely you will have to comply with several local, state and federal laws, some of which may be in conflict with each other. It can be very complicated to understand if you have no legal background, and it can hurt your business financially if you are not aware of your local laws.