Years ago I interned with a local judge who gave me an invaluable piece of advice. Every small business owner, he told me, needs a good attorney and a good accountant. And those are the two relationships that small business owners are most likely to ignore.
Many of the problems I encounter could have been avoided early on by running it past their attorney. Whether it’s a poorly drafted contract, an agreement that was never put in writing, or an inappropriate estate plan, a quick visit to your attorney early on can pay huge dividends later. As I like to tell my clients, people think that attorneys are expensive, but they’re not. They’re actually quite cheap, if you hire them before the problem arises. Its only after the fact that attorneys are expensive.
An old adage says that the man who represents himself has a fool for an attorney. At the same time, visiting an attorney to review your every signature is a fast way to go broke. So when is it time to bring your attorney into the loop?
Estate Planning. If you’re young, broke, and have no dependents, the forms you find at Staples will probably suffice. John Grisham’s novel “The Testament” is a fascinating if lurid tale of a holographic will, which is another DIY alternative. But for everyone who isn’t young, broke, and free, the risks of self-help far outweigh the savings. Do yourself and your family a favor and get competent representation.
Contracts. I’ve seen a lot of deals go south because clients tried to write their own contracts. Having said that, a good rule of thumb is to consult an attorney if the value of the contract exceeds what you can sue for in small claims court. In Sacramento County, that amount is $10,000.00. Of course, there may be good reasons to consult your attorney even if the amount of the contract is less, but keep the small claims cap in mind when you’re trying to decide whether to pick up the phone.
Business Formation. Even if you don’t retain an attorney to do everything, you should at least consult with both an attorney and a CPA knowledgeable with business formation. From selecting the type of business entity to developing an exit strategy, experienced legal and tax advice is critical. An attorney can also help craft a buy-sell agreement that will minimize conflicts if one of the owners passes away or has an emergency, as well as coordinating your business with your estate plan.
The Law Offices of Quinton J. Miller is a general practice law firm with an emphasis on Estate Planning, serving clients throughout Sacramento and Northern California. We assist clients with estate and long term care planning, and small businesses with transition planning, litigation, and general business needs. For more information or to schedule a consultation, please contact us at (916) 714-1717 or visit our website at http://www.quintonlaw.com.