If you understand the grunts of a new start up business, you certainly understand the need to cut some corners, and cut expenses wherever and whenever possible. I was fortunate enough to have a friend of mine who was an attorney who agreed to handle the legal matters of my company free of charge until I had the money to pay him.
Having a growing business, I constantly needed contracts for various things. After hiring my friend, I noticed that contracts were being drafted at a snails pace and it seemed the longer and longer I used his help, the longer and longer it was taking him to get anything done. Before I knew it, his secretary was screening my calls, taking messages, and not giving me any news I wanted to hear about when my legal work would get done. One pressing contract I was waiting for was an overseas distributor’s contract to be read and revised in time for a meeting of the minds at our showroom the following month. Upon visiting our office, I informed the distributor that, due to a backlog of my attorney’s workload, I wasn’t prepared to sign the contract in his presence. He was so upset that he demanded I pay for his fare back to Germany and related expenses. I refused, and we never spoke again. The contract would have guaranteed over one million dollars a year in orders to our company.
That was the first strike.
After giving up on my friend after a year of aggravation, I went in search of a new attorney. I was fortunate to have another friend who was an attorney who was willing to take over my legal work. This time it was different. My demands were always met with punctuality and I never had a problem getting through to him when I needed. At the time, I was in desperate need of a very complicated contract. The contract consisted of a responsibility contract within an order fulfillment contract within an overall financing contract. Complicated indeed. The problem was, however, he did not specialize in this sort of thing so he would constantly look up information, call other associates and, to his credit, did everything he could to put the contract together. In the end, as it turned out, he had missed a few crucial points that would later prevent me from collecting nearly two hundred thousand dollars from the party that I was under contract with.
Whose legal work do you think is always worked on last?
In the first example, I was a non-paying client. Friend or no friend, the non-paying client. Always. Who are the most important two people in your company? You and your partner? Try again…your lawyer and your accountant. It’s your job of course to create the money, but if you don’t have the guidance to both protect it and direct it into the right places, all your work could put you in a worse position than from where you started. In my first business, not only did I lose my life savings, but I also lost much more than that from what I made in the years building it. Your accountant’s responsibility is to show you how to save the money, how to redirect it from a tax advantage standpoint, as well as how to make that money work for you and grow. Your lawyer’s responsibility is to protect that money so all the work your accountant has been doing isn’t for nothing. If you don’t do this, you might be better off going to Vegas with the money and playing roulette. Would you run off on a horse with saddlebags full of gold without a compass to show you where you are going? Odds are you’ll end up in the hands of the enemy.
Effort Without Knowledge
In the second example, I used a lawyer who didn’t specialize in my trade, and forced him into doing something he was ill informed to handle. He did it on time, but it was missing certain key points that were necessary that an attorney who had specialized in that area would have thought of right away.
Simply put… if your business can’t afford a lawyer and an accountant, DO NOT START YOUR BUSINESS! Find both a lawyer and an accountant that specializes in your field. In these situations, be careful about “haggling”, as you don’t want to be penny-smart and pound-foolish. The rule rather than the exception is, you normally get what you pay for!
Have a great day!
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