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In an effort to try and put up some content that might be useful to small businesses, I thought I’d write today about something close to home. Lawyers.

Are they really necessary? Do we really need them? The answer, I would say perhaps unfortunately, is yes. Lawyers help us anticipate and plan for problems in the future, and also help us sort out the messes we sometimes find ourselves mixed up with in the present. I have advised many friends and clients who found themselves on the receiving end of a legal matter without even quite being sure how they ended up there. And once someone has threatened or initiated legal action against you, justly or unjustly, you have to be prepared to take action to defend yourself, and that may end up costing you money out of pocket for attorney fees and expenses, even if you end up winning the legal battle!

What’s that, you say? I can end up being in the right and win in court and still have to end up paying some lousy lawyer out of pocket? Now I REALLY hate lawyers! And you wouldn’t be alone. Many lawyers are dissatisfied with our system of justice. For all its strength and effectiveness, it has weaknesses, and one of those weaknesses is its complexity. In order to be able to account for as many variables as possible, it has to be complex, but that also means that it requires an expert to help navigate it. And that expert, like an expert in any other field, needs to make a living. However, there are ways to manage that expense.

First, since you have to have a lawyer, get a good one, appropriate for your size and industry. Your primary counsel will likely be a transactional attorney. This attorney will help you make sure that you are organized correctly and performing all necessary corporate maintenance activities for your entity type. He or she will also help you review contracts, figure out how to hire and fire people, and act as a resource for finding specialist attorneys as necessary. If your industry relies heavily on intellectual property, you will also want to develop a strong personal repationship with an IP attorney. Both of these attorneys should know your organization and operations very well so that they can help anticipate your legal needs. A good attorney will usually be willing to invest some amount of his or her own time in getting to know your company at the outset, and your relationship will deepen over time.

Take some time and interview a number of different attorneys to make sure you find one that you feel comfortable working with, and that has the right experience for your industry. It is also important to resist the urge to automatically select the attorney with the lowest per-hour billable rate. Often, low per-hour rates translate into larger bills because of extra time spent making up for a lack of expertise, or even worse, a poorly (but inexpensively) written contract exposes your organization to considerable liability. Some attorneys are also willing to offer flat fees for some services with long-term clients, or even enter into a retainer agreement where a certain suite of services are provided, some months more, some months less, for a set monthly fee. Feel free to explore creative options with the attorneys you are interviewing and set yourself up in a position you feel comfortable with.

Second, budget for legal expenses. I know nobody likes to pay the lawyers, but as you grow, so will your need for legal services. Getting this into your budget early on will help you keep legal concerns in your strategy, and that will ultimately help you keep legal costs to a minimum in the long run. Exploring some of the alternatives I’ve described above will help to put a relatively constant face to that figure.

Third, remember that an ounce of prevention is worth a pound of cure. It gets annoying paying five hundred dollars to review a contract that may only be bringing in to your company twenty or thirty thousand dollars worth of revenue. On the other hand, that five hundred dollar review will seem like a bargain when you are facing a lawsuit or regulatory agency action whose expense may outweigh the value of the contract itself. Contract reviews are definitely an investment worth making. The good news is that there are ways to reduce this expense as well. You can do much of the legwork yourself. You know the deal you want to make better than anyone. Start with a template agreement of the type you are entering into (e.g., product sales, trademark licensing, employment, etc.). You can get such templates from your attorney, or if he or she does not have any available, on internet sites (such as www.findlaw.com). Try filling in the blanks and putting in minor modifications to describe the arrangement you want. Try not to change sections that do not seem to deal directly with the terms of the deal you are making. These are usually “lawyerly” provisions, are necessary, and are best left to be amended by the lawyer who authored them. Once you have put in the terms you want, have your attorney review it and explain any changes he or she wants to make with you. This will let the attorney shore up any problems, and will make sure you are both on the same page. You will also have saved the expense of the attorney filling in the terms of the contract on billable time.   

Finally, and this hearkens back to a comment above, keep legal in your strategy. There are many ways to do this all along your path. The cheapest way to do this in the beginning is to have a lawyer friend. I know the risks that may run to your reputation, but they are generally considered more entertaining than accountants, and there is an inexhaustible supply of jokes to be told about them behind their backs, or even to their face! I often answer basic legal questions for friends and acquaintances. Short of having a lawyer “friend”, small businesses can develop relationships with attorneys interested in their industry through participation in industry associations. Lawyers often join these associations and attend their functions in order to further their industry knowledge and to network. This networking is an opportunity to develop a relationship with them and to get general advice and answers to basic questions. If you are a startup that is short on cash but long on value, you may consider asking an attorney to join your board and/or provide legal services in exchange for a percentage of ownership in the company. And finally, once the number of legal concerns your company is addressing accumulates to the point of becoming a real distraction from running the company, it may be time to consider hiring an attorney to work in-house. If you are still small but feel like you are on the edge, try finding one that can wear a couple of hats and perform additional functions for the company, or see if you can get a practicing attorney to dedicate a certain amount of his or her time to you for a flat fee. 

Most importantly, put your innovative spirit to work in establishing your relationship with legal counsel. Lawyers stand behind us and make sure that we can at least feel like we are doing business on a handshake and a smile in the boardroom, while they are tightening everything up behind the scenes. Legal counsel is a necessary, but minimizable, expense that will put a small business ahead of those who do not pay attention to it. Following these guidelines will help to ensure that you are always using the lawyers, and not the other way around…

“What would you be willing to do for the rest of your life?”

That is the seminal thought in a great little book my brother sent me awhile back, and I thought I’d do a short review of it on the site tonight. The book is “The Monk and the Riddle” by Randy Komisar. It is, on one hand, a narrative representation of Randy’s experience with countless numbers of Silicon Valley hopefuls who came to him seeking advice and financial backing for their big ideas. Randy embodies the hopes, fears, strengths, and weaknesses of these collective entrepreneurs in the form of Lenny, an entrepreneur with a big idea to revolutionize the funeral industry. On the other hand, the book is also a statement about how to measure personal success in entrepreneurial endeavors, as Randy’s protagonist learns that entrepreneuring by doing something one really loves is much more likely to be successful at bringing one happiness than entrepreneuring in order to one day be able to do what one loves.

Randy’s personal experience and main point with the book seems to be to remind us that happiness comes not so much through the acquisition of resources, but by engaging in an endeavor to which we feel personally committed and interested. He shows the folly of sacrificing our devotion and personal passions today and spending our time and energy working only on seemingly hyper-lucrative pursuits in the hopes that we will strike it rich and then be able to spend the remainder of our lives doing nothing but pursuing our dreams. Of the myriad problems inherent in such an approach, Randy addresses a few, including the minute likelihood that any particular entrepreneur is actually going to be fortunate enough to actually find the payoff they have been looking for, and the fact that even among those who make it, they have often so deeply ingrained in themselves the notion of working for money, that they have lost the capacity to work on their dreams. Randy’s personal moment of enlightenment came as he stared down a hallway and could see his whole career and life’s ambitions, being confined to that narrow corridor and the context within which it functioned. He realized that, although that career path would bring him financial success, that success would be hollow because he could not love what he was doing.

The Monk and the Riddle is a very interesting and entertaining book, and a very quick read because of its easy, narrative style and compelling principles. I think somehow we all know instinctively that the world would be a better place if everyone dedicated themselves professionally to the things they love most and were most interested (and hence educated) in, instead of dreading their job, boss or both as they grudgingly trudge off to work every day. The Monk and the Riddle is great not just because of the insights Randy gives by sharing his life view, but also because of the way it naturally leads one to look internally and ask those same questions about one’s own professional activities. Not only do I strongly believe that we will be more likely to become leaders in our industries if we dare to do things we love, I think we also will have less risk in our professional lives in the long run, because we will be willing and able to dedicate ourselves fully to our pursuit, instead of begrudging our employer and always looking around for greener pastures. I highly recommend giving “The Monk and the Riddle” a read.   

So, finally a first real post.  I know there are millions of you out there just waiting for it. Just imagine, a vehicle I can use to chronicle the jumble of thoughts rolling around my head during the day. Maybe some of them will end up being valuable. At any rate, putting them on (virtual) paper can only serve to help them coalesce into more substantive concepts, so if nothing else, this should be a useful exercise in being critical of my own thought. 

Maybe I’ll just start my blog by saying that, even as we stare down the most serious recession we’ve had in a while, I’m grateful for the entrepreneurial spirit of the American people and for a social and economic structure which allows individuals with a good idea and a bit of tenacity to pursue their dreams; to not be satisfied with sticking with a job they hate just because they were born in a less-advantaged social class. Some entrepreneurs get rich, others just get by, but all are rewarded with the opportunity to chase their dreams – even if only for a little while – and experience a measure of creative freedom that corporate minions never know. I plan to use many of the posts in this blog to explore entrepreneurism, along with its frustrations, exhilarations, success stories and lessons learned from failure. I know I’ll grow from that part of the ride, and I hope a few of you enjoy it too.

I’m sitting here blogging with Curtis J. Morley. He just helped me get this up and running, so we’re off to the races.

 Starting small so you don’t get your expectations up…