Memorandum 

To:            Our Clients and Prospective Clients

From:        John E. Corbett

Subject:    You know you need a lawyer when ....

The fact of the matter is that you don't always need a lawyer. All business people and most individuals face life every day in a world that is influenced deeply by the law. Usually, you can do that successfully and productively based on the knowledge that you have, your experience, and your good common sense.

At the foundation of law are accepted rules governing conduct and interactions among people and groups of people. If these rules are to be useful, they have to be generally understood. For the most part, they are. We don't kill each other. We don't take other people's property. We meet our obligations and we expect others to do the same. We have peaceful means of resolving disputes. That much is easy. Some of the rest is not so easy. In a complex economy, there are some complex rules. There are transactions that the average individual or business person does not face regularly. There are opportunities that can only be realized by legal process. There are some regular transactions that are not worth your time to learn to handle yourself. After all, it's your business and you should have more productive things to do with your time. For those things, you need a lawyer. Among them are:

• If you are in a business, I suggest that you have some type of continuing relationship with a lawyer who you trust with your affairs and who can provide you with good advice. If you have a continuing relationship with that lawyer, you will also receive a priority in the services that are provided to you. If you have a continuing relationship with your lawyer, you will also pay only for the time actually spent with you or working on your business; there is no additional overhead in interviewing you to understand your business.
• If you intend to engage in repeated, similar transactions such as the sale or purchase of goods and services it is a good idea to engage the services of a lawyer before you get too involved. Experience is a very hard teacher because she always gives the test before she gives the lesson. If you hope to develop a business based on similar agreements with your customers and suppliers, make sure that those agreements make sense for your business.
• The same can be said for high-value, single transactions. If you have a large investment and are taking a large risk, it makes sense to invest in some of your lawyer's time to ensure that you are protected.
• If you are unable to resolve a dispute with a custormer, supplier, or employee, you need a lawyer. Most business problems are resolved between the parties in a friendly way. Some problems are not easily resolved and some of your business contacts may feel little incentive to cooperate with you. Calling your lawyer to assist in these matters does not mean that you will inevitably wind up in court. Frequently a better understanding of the legal issues can promote resolution of the problem. Frequently, the mere fact that you feel that the problem is important enough to you to involve your lawyer will promote success.
• If you need to use the courts, you will probably need a lawyer. With the exception of small claims courts in some of the States, only lawyers admitted to the Bar of the jurisdiction, either generally or for your special purpose, can represent you before the courts and government administrative agencies.
• If you are starting a business you will have many legal issues that can best be handled with assistance from your lawyer. Among these are the choice of the form of the business, the selection of the jurisdiction in which the business should be formed, preparation of the mandatory documents that are required for some forms of businesses, agreements among the owners, establishment of business identity, transfer of essential property to the business, and the preservation of any intellectual property rights for the business.
• If you are borrowing money to operate your business you should keep in mind that commercial loan agreements are non-uniform. You may be familiar with the typical residential mortgage and note which are drafted according to national standards so that they can be easily sold by the lender on the secondary mortgage market. That consistency is not typical of commercial loans. Every commercial loan is a unique creation. You can expect that a commercial lender to want to acquire rights in all of your business property and perhaps all or some of your personal property as a guarantee for payment. The lender may want to limit the amount that you can draw from your business. The lender may specify formulas that limit the amount that it will loan to you and will want to restrict your right to borrow from anyone else. Once the deal is done, you will be reporting to the lender's finance committee and not the friendly representative who is negotiating your loan. Lack of cash can put even a prospering business out-of-business. Cash liquidity influenced by the lender's formulas can be a particularly critical issue for businesses that have a seasonal nature. Relationships with lenders can be trouble or they can be cooperative and rewarding. It pays to get it right the first time.
• If you sell services you need a lawyer. The law surrounding the sale of services is far more volatile and uncertain that the law surrounding the sale of goods. You need effective contracts with your customers to protect your rights and your relationships.
• If your business depends on products of the mind you need a lawyer. One of the most technical areas of the law is that of intellectual property. The general areas of concern are copyrights, patents, trademarks, trade names, trade secrets, commercially-sensitive information, and business know-how. These items are the real assets of many modern businesses and their protection is essential to the life of the business. There are many ways by which your intellectual property can be protected. Some give you rights against everyone, some are limited to the United States or to a particular State, some apply specifically to your employees and contractors. The legal issues are highly technical and the best services for you can be had from a lawyer who both understands them and understands your business needs.
• If you have more than a few employees you will need a lawyer. Employment disputes are inevitable. It is much more effective for you to have policies and procedures in place to handle them before they get away from you. You can be protected against the high cost and disruption to your business that may be caused by employment disputes. Your lawyer can help with this.
• If you are buying or selling land, an existing business, a franchise, or a major asset you do need a lawyer. For most people, this type of transaction happens infrequently. There are many things that can go wrong. The problems can be serious especially for the buyer because it is the buyer who must live with the result of the sale. Engaging your lawyer early in the process is important. That is especially important if timing is critical to you.
• If your business has more than one owner you need a lawyer. Do you really want to do business with your partner's spouse or executor? Most new and small businesses are formed through close ties among individuals who bring particular talents, skills and dedication to the business. The loss of a business partner for any reason is serious. The unwanted substitution of someone else is disruptive at best and a disaster at worst. Take some time to think about what should happen to the business managment in the event of a forced change of ownership. Get your lawyer to put it in writing and sleep well.
• If your business is in trouble, you need a lawyer now. This seems to go against logic, because most business troubles present themselves first in the form of significant negative cash flow. Owners respond by trying to cut costs. The addition of yet another service-provider seems to only increase the problem. If you have followed my advice to have a continuing relationship with a lawyer, call that lawyer. If not, get a lawyer. Good advice about your legal options may yet save the business and will save you a lot of trouble in the future.

There are many other areas in which your lawyer can give you assistance. I have invited your attention to the ones above because they are among those that can frequently generate opportunity or can cause problems for business people and individuals who are involved in business transactions.