There are two professionals every business will need early on, the accountant and the lawyer. Usually businesses can rationalize getting an accountant; they need to keep their books in order especially if they are looking to attract investors. As for a lawyer, not so much.
With ongoing work to ease the process of starting a business in Nigeria, business owners seldom see the need for a lawyer as they can quite easily incorporate their business themselves. As a business owner, you may be thinking “I don’t plan on suing anyone” but waiting till you are faced with a lawsuit is not the right time to hire a lawyer. You will end up paying through your nose to sort expenses as what’s left at that point is usually the amount to pay (in court costs, lawyers’ fees, settlements and other expenses) to get the problem resolved.
One fundamental thing to note is – it is very easy to get in court but difficult to get out once trapped. So it is advisable to pay a lawyer a small amount of money to keep you out of court troubles.
Below are circumstances you will need a lawyer as a business owner:
1. Business and Entrepreneurship
If you are running a business, you need the services of a lawyer who can help you make certain decisions. Such as whether the terms of entering into certain business relationship are fair, especially if you are not starting your business alone.
Drafting a founders’ agreement, advising on vesting, equity transfer etc. Let the lawyer take care of that.
2. Intellectual property
Irrespective of your business type, this is one thing you want to have a handle on. It even becomes more important, if you are an inventor or if you are in the entertainment, media, design or creative industry. Good ideas are easily pilfered and you need a lawyer to advise on copyright, trademarks or patents.
A sound lawyer can also advise you on IP licensing and assignment.
3. Employment contracts
These are not easy-peasy. Infact, if you don’t pay attention to employment contracts you sign, you might end up with various suits on your hands when you decide to part ways with an employee.
Lawyers are trained to look at a document and find out what’s missing and compare against what is present. In this case, they can help identify missing provisions such as certain employee benefits, employee-friendly termination provisions, IP assignment clauses among others.
4. Corporate governance
Finally, you have incorporated a company. It is now time to run your business and make some money.
What about maintaining your incorporation status? Yes they are on-going legal requirements you need to fulfill to maintain your status.
You need to hold annual shareholders, meetings and periodic directors meetings. The recordings of the minutes and election of officers must meet some basic requirements. You also need to make certain filings at the Corporate Affairs Commission (CAC).
Getting some of these things wrong can jeopardize your corporate status.
5. Investment & Financing
A lot of businesses end up seeking investment from Venture capitalists, banks or Angel investors but are your documents in order?
If you plan to seek equity or debt financing for your business, you need a lawyer that can properly write and review all legal documents given to you by potential investors.
In the course of reviewing these documents, your lawyer can help you understand the impact the (debt or equity) investment agreement will have on other obligations and existing contracts with suppliers or financial institutions.
If you have hunted for apartments or office spaces then you know a lot of agreements are drafted to benefit the landlord.
Ever signed those printed forms/documents you get once you are about to make payment? You need to know that they aren’t final and can be negotiable.
Your lawyer should be able to negotiate tenant-friendly provisions that will benefit you.
This is your business and not your home. It will not pay to constantly have landlord troubles hanging over your head.
Choosing a lawyer
Running a business means you get involved in quite a few legal issues. Though as an entrepreneur, you are expected to wear many hats or bootstrap your way to success, sometimes it’s easier and more beneficial to leave complicated matters to the experts.
Trying to sort things out on your own could result in more complications for your business.
Before signing up with a lawyer, make sure you are both agreed on fees and payment terms. Even if your business is yet to generate revenue, the wise thing to do if you need to hire a lawyer, is to agree on flexible payment arrangements with your lawyer and not not hire a lawyer.
Visit our Lawyer Directory, DIY Engage, to find a lawyer.