Why Do I Need a Business Lawyer Anyway?

I am often asked why anyone would need a business lawyer to incorporate, when all one needs is an incorporation kit from the local office supply store. Perhaps I can answer this question by asking a few questions.

Did you know that a corporation in California pays a minimum of $800 per year in franchise taxes, whether it has any profit or not? Did you know that there is a double (corporate and individual) tax involved with corporations, which cannot be entirely erased, even with expensive lawyers and accountants? Did you know that if you do not keep your corporate books and financial books and records separate from your own, that the corporation may not exist when you need it most — to insulate your personal assets from a large liability?

Did you also know that there are at least four other limited liability entities that may be available to you and perhaps even more appropriate for your business?

Hiring and firing of employees is fraught with potential and substantial liabilities, but did you know that simply mischaracterizing employees as salaried versus hourly may require you to pay huge overtime wages and penalties years from now? Do your employees work "at will", or does your employee manual unravel "at will" employment?

Do you have an employee manual that covers sensitive areas, e.g. sexual harassment, discrimination, and family leave?

Employees are one of the greatest sources of liabilities for a business. These liabilities may be limited in advance through instituting proper policies, procedures and forms. There is no such thing as a standard employee manual for your business on the office supply store shelf. Different employment issues have their own triggering legal events, such as numbers of employees.

Another source of significant liability to a firm is its contracting policies. Does your firm have written uniform contracting procedures and policies? Do you have standard contracting forms? Are they up to date? Do they protect you in the areas of indemnification, warranties and guarantees, and trade secrets? How long has it been since these forms were reviewed in the context of your present mix of business and the current legal environment? If you have added government contracting to your mix, this adds a whole new level of legal risk to your business, including employee "whistleblowers".

Environmental liability is another legal "minefield". Many "Moms and Pops" have been put out of their businesses and homes by purchasing businesses that had unknown environmental liabilities arising decades ago. The purchase of businesses and real estate without proper protection against environmental liability is akin to playing Russian Roulette with your assets.

Large businesses have learned the hard way that they need full-time legal counsel in their firms to handle these and many other matters, such as equipment leases, real estate transactions, sales or purchases of assets, international transactions, and other matters. There is a rule of thumb that a business needs one full-time lawyer (172 hours per month) for every 500 employees. So your business is only 12 employees? You should need, on average, a business lawyer 4 hours per month. That assumes that your business is already "up to snuff" in its legal affairs.

A legal audit to determine whether your firm is adequately prepared to meet its present legal situation will "fix" unprotected areas.

Now you know why you need a business lawyer!

Notice: The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of my knowledge as of the date of the article. I have no duty to update this article. The information, examples and suggestions presented in this article have been developed from sources believed to be reliable. This article should not be viewed as a substitute for the guidance and recommendations of a retained professional and should not be construed as legal or other professional advice. In addition, I do not endorse any actions addressed herein, unless they are produced or created by me.  I recommend consultation with me or other competent legal counsel and/or other professional advisors before applying this material to any particular factual situations.

 "Bruce, Thank you for protecting me."

Who We Are:

Image of Bruce Leonard Beal

The present firm arose from Bruce's move from the Los Angeles area to Dana Point, where he and his wife wanted to live since they first  discovered it. 

Bruce comes from the Senior Counsel position in a large world class international technology, engineering and construction corporation with thousands of employees, hundreds of large clients, world class projects, hundreds of affiliates, and complex transactions and litigation. 

Before that, he gained significant major law firm experience, including arguments before state appellate and supreme courts.

His desire in moving to Dana Point was and still is to bring his world class experience to smaller and emerging businesses in the area. 

This experience produces more valuable legal and business judgment from him than is available from newer attorneys or attorneys whose practices are more specialized and localized.  His extensive Resume is here Résumé.

Marlene wears all hats other than "Lawyer" in the firm,  including Paralegal, Marketing, Accounting, and Office Management and Assistance. Her extensive Resume is here Résumé.