Episode 310: What is a Business Lawyer?

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Business lawyers serve as legal experts for commercial or business clients, offering professional counsel and oversight when businesses make decisions that have legal ramifications. As companies are tightly regulated by federal, state and local agencies, there are many such decisions that owners must make. A business attorney ensures every one of those transactions and maneuvers is compliant with laws at every level.

 What Legal Matters Can a Business Lawyer Help Companies With?

Business lawyers provide expert legal advice and guidance. They can draft forms, contracts and documentation to facilitate complex transactions. They forecast their client’s long-term company-related goals and ensure there are no legal hurdles that may interfere with those goals. In short, business attorneys ensure companies are always making the most prudent and advantageous decisions from a legal standpoint.

A business attorney provides value in a general sense – acting as an always on-call expert whenever complex legal questions arise. But they’re also an irreplaceable part of the team during certain business decisions, including:

• Business formation and entity structure – Business attorneys can advise their clients during the initial formation process. This includes identifying the best entity structure for their client’s needs – their tax needs, specifically, as taxation laws are different for each type of structure. Once the optimal business structure is identified, the lawyer can complete all relevant forms to ensure the new company is registered with local and state authorities.
• Filing for intellectual property – Intellectual property (IP) may be the most valuable thing your company owns. That’s the case for many companies, which is why intellectual property management is a major element of business law. An attorney’s duties in this area include filing for patents, trademarks and copyrights, determining when IP has been breached and managing litigation if IP rights are infringed upon.
• Developing a contract for hiring or transactional purposes – Business attorneys can draw up contracts to protect the company from liability, establish NDAs, or to set the terms of a corporate or vendor partnership. It’s the lawyer’s job to forecast any potential problems with a particular relationship – employee or partner – and to mitigate those issues with tight contract writing. A business lawyer can also negotiate the terms of a contract beforehand and ensure everything is within legal boundaries.
• Enforcing a contract’s terms – Business lawyers write business contracts can also enforce the contracts they develop for clients. Enforcement frequently includes opening up litigation, which may involve court time for the attorney. More often, the business lawyer will spearhead settlement negotiations between parties.
• Merging with a business or acquiring it – Mergers and acquisitions are extremely complex transactions with many legal implications. Throughout the M&A process, a business attorney can advise their clients on the transaction’s process and timing, perform due diligence, ascertain transactional risk and value, determine tax ramifications, ensure fiduciary duties are observed, negotiate all transactional contracts and documents and serve as a hub of communication for all parties involved. Further, a business attorney can efficiently guide a deal to closing, with tasks like attaining third party consent, filing with regulatory bodies, and working with financial advisors and accountants.
• Preparing and filing tax documentation – The company’s accounting team may be responsible for tax preparation and planning duties, but a business lawyer can advise on any tax law matters beyond the accounting team’s scope. This is typically the case when a business engages in a major transaction. Some business lawyers are also certified to provide tax accounting services or are networked with tax accounting experts who can also assist.
• Acquiring or leasing real estate – Real estate law is complicated for both property owners and tenants. An attorney can help their clients review leases, advise on any potential tax benefits, ensure tenancy and owner laws are being observed, and help with the mountain of paperwork that often accompanies a real estate transaction.

Clearly, these are high-impact, long-range decisions that require expert handling. A business lawyer can provide that expertise with confidence and care.

Choosing the Right Business Lawyer: Qualifications and Traits to Look For 

Given their responsibilities, business attorneys must be thoroughly qualified to guide and represent businesses in legal matters. Ideally, your business lawyer will have the following:

• Education – Business lawyers are expected to attain at least seven years of postsecondary education before they can practice business law. This includes four years of undergraduate study followed by three years at a law school. Many attorneys seek an undergraduate degree that’s related to the occupation, such as business administration or accounting. During their three years of law school, students spend one year learning core legal curriculum and two years in business law classes. Following their studies, students take the state bar exam to demonstrate their legal knowledge. Continuing education courses are also required to maintain membership with the state bar.
• Experience – Newly minted attorneys usually get their start working under senior lawyers at an established firm. Some go into government work, and a few start their own practice, but company owners are best served by partnering with an experienced business law firm. Experience is often the best teacher for new attorneys, as it doesn’t take long before a new business lawyer encounters something not seen in the classroom. Over the years, business attorneys develop a wider sense for all the available legal tools and maneuvers available to their clients. In this way, experienced attorneys can provide business owners with all possible options.
• A robust legal network – Law is a field of specialists, and even among business lawyers, it’s rare to find two attorneys who have the exact same legal skills and specializations. One business attorney may be comfortable with mergers and acquisitions, but less versed in tax law. Another may be a real estate expert, but not as proficient in employee management. This is a big reason why attorneys work together in firms. If your business lawyers are well-networked with local, state and national professional associations – and if they have a history of success in the field – they will have additional legal experts to call on if they have any questions about a particular transaction or decision.

What is the Difference Between a Business Lawyer and a Corporate Lawyer? 

The terms are similar, even mistakenly used interchangeably, but business lawyers and corporate lawyers are two different specializations. There is some overlap as both can advise clients in maintaining compliance with local, state and federal law, for example. Many business lawyers are also familiar with corporate law, and vice versa. Both can file a lawsuit on their client’s behalf, and both can advise on intellectual property management. There are significant differences, though.

Here is a brief summary of each type, including what makes them distinct legal disciplines:

• Business lawyers – Business lawyers are experts in business formation and knowledgeable in several business-related areas, including employee management and contracts, business tax law, consumer law, and managing partnership agreements.
• Corporate lawyers – Corporate lawyers are specialized in incorporated entities – both S corps and C corps. They can advise on shareholder rights and agreements, as well as investor agreements. As corporations can enter into contracts, corporate lawyers can also provide counsel here, too. In general, corporate attorneys are more likely to be involved in complex contracts and transactions, including those with international ramifications.

If you’re planning on forming a corporation, or already own a corporation, working with a corporate lawyer clearly makes sense. Corporations may also retain a business lawyer for their tax and employment law specializations.

 Companies have Complex Legal Needs, and Business Lawyers Can Simplify Them

Business lawyers play a vital role for their clients, acting as a catch-all legal expert that can advise on any law-related concerns. Experienced business attorneys can forecast their client’s future legal needs as the company grows and engages in increasingly complex transactions. The value of a business attorney, though, is present from the very beginning of a company’s formation. As such, new business owners are best served by adding an attorney to their team as soon as resources permit.

By Harold "Hap" May, P.C. on November 27, 2023   /   Blog, The Legal Play Podcast   /   Leave a comment