Since we are on the topic of due diligence, this is a nice segue into the importance of attorneys in developing a business. Guy Kawasaki has identified a number of difficulties that arise when dealing with lawyers. 1 But Kawasaki also believes that lawyers are critical for the success of business start-ups. 2 Lawyers and entrepreneurs often have trouble interacting because lawyers focus on what can go wrong and the entrepreneur is the eternal optimist and focuses on getting things done. Entrepreneurs tend to embrace risk and focus on the prize, whereas lawyers tend to be risk averse and focus on what can go wrong. Entrepreneurial enthusiasm tempered with a bit of lawyerly caution can alleviate many hazards on the road to building the business. Lawyers can assist with the following activities:
- They can help in selecting the appropriate form of business incorporation such as a sole proprietorship, a corporation, or a limited liability corporation.
- They can provide guidance on whether you can leave a company and start a business in the same industry.
- They can provide insight and counsel on protecting intellectual property in using copyright, patents, and trademarks.
- They can assist with real estate and rental transactions.
- They can check employee benefits and employment contracts.
- They can provide legal expertise on venture and angel investment funds.
- They can assist in selling the business and going public with the issuance of stock.
A good starting place for information on the selection of legal counsel, working with accountants, and incorporating companies can be found at http://www.entrepreneur.com and http://www.sba.gov/. You probably do not have to include the lawyering and legal issues in the business plan, but you need to be aware that there are numerous legal issues and accounting issues that are looming. Professional expertise is expensive, but in some instances their advice is critical for successfully navigating through the legal and financial systems.