When Should I Retain an Attorney?

Date: August 11, 2014

On any given week the NFIB Small Business Legal Center hears from small business owners struggling with employment law questions, collection issues, contractual disputes, and regulatory problems. We hear about some issues so frequently that we’ve developed a special NFIB Legal Guide Series, which includes, among others, our Model Employee Handbook, our Guide to Federal Employment Law, our Guide to OSHA Inspections, and our Guide to Taxes. You can also find other great resources online.
Where to Start when you have a Legal Problem

A simple Google search will answer many questions. Often legal experts have already explained recurring legal issues in a manner that should be easily digestible for ordinary small business owners. Legal blogs and online forums can be great resources; however, as with any online source, you should consider the credentials of the commentator.

Some of the best resources may be from regulatory agencies. Though state and federal agencies can sometimes cause problems for your business, they typically do a pretty good job in explaining what the law requires. So for example, the Department of Labor and the Internal Revenue Service offer helpful explanations of pertinent laws and regulations. You should also remember that the Small Business Administration can be a useful resource, and that certain agencies have set up ombudsman offices to assist small business owners with their issues.

Does it Make Economic Sense to Retain an Attorney?

As a general rule of thumb, you should always retain an attorney if you think your legal rights are in jeopardy, or if you anticipate either a lawsuit or an enforcement action from a regulatory agency. But the reality is that it may not always make economic sense to hire an attorney. Ultimately you have to make a judgment call.

The benefit of retaining legal counsel is that it puts you in the strongest position possible. Even when you’ve made a mistake, an attorney can be immensely valuable in helping you minimize damages, in negotiating a settlement, or in helping you avoid hiccups in the future. And, even when you are in the right, you risk making mistakes when you act on your own.

Of course, when we’re talking about low-dollar problems it is sometimes better to try to resolving your issues without resorting to an attorney. In such cases, small claims court may be your best option. Still, even if you are contemplating going to small claims, it may be worth exploring potential alternatives to settle the issue before things become ugly. While we always warn small business owners that litigation can quickly become a black-hole in terms of legal expenses, it is also important to remember that—in an age of social media—even a small-dollar legal dispute can become big public relations problem. So whether you retain an attorney or not, it’s usually best if you can resolve issues quickly and without extended conflicts.

The Benefit of Being Proactive

We often hear from small business owners who are hesitant to talk to an attorney. But you should keep in mind the old adage that “an ounce of prevention is worth a pound of cure.” You can avoid major headaches later if you are proactive in ensuring that you are fully compliant with the law now, or that your contracts are as air-tight as possible up-front. You can also save yourself a lot of money if you are proactive with your tax and estate planning. The bottom line is that you shouldn’t wait until you have crisis to begin thinking strategically about the legal issues confronting your business.

Does NFIB Legal Center Offer Legal Advice?

While we are always happy to be a resource as best as possible, the NFIB Legal Center cannot give legal advice. This means that we cannot tell you what you should do in any given case; however, we do frequently receive questions from small business owners on a whole host of issues. Generally speaking we aim to direct small business owners to materials we’ve developed in-house, or other online resources to help business owners with their issues. But we will certainly tell you if we think that you would benefit from an attorney. 

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