It can be hard to know when you should call an attorney and when to come up with a solution on your own.
If you and your friend are discussing partnering on a new business and have hashed out the terms, do you really need to pay a lawyer? Do you need an attorney to draft a new client contract? Or when your neighbor's tree falls on your garage, do you have an attorney contact them about the clean-up, or simply go knock on their door?
You always have the option of trying to negotiate such situations yourself. The question is, should you?
Are you creating more problems for yourself down the road or opening yourself up to liability by failing to hire an attorney upfront? In many cases, the answer is yes.
Situations when attorneys may help
Unless you are trained in handling similar matters, it's generally wise to retain the services of someone who knows more than you do about the situation you're in. You wouldn't try to build a house without a general contractor or negotiate a multimillion-dollar buyout of a competitor on your own, would you?
But sometimes you may wonder whether the expense is worth it.
Some common situations when you may want to hire an attorney include:
- Starting a business
- Protecting an invention or trademark
- Considering divorce
- Evicting a tenant
- Getting arrested or being served with a court notice
- Being involved in an accident that caused harm
- Experiencing personal property damage
- Buying or selling a business
- Writing a will or estate planning
- Facing citizenship or immigration issues
In general, you'll want to hire an attorney when you have a lot to lose if things don't turn out as you hope.
"I knew it was time to hire a lawyer when we started doing contracts with larger businesses, and the language of the contracts went way over my head," says Jeff McLean, co-owner of McLean Company, commercial painters. "I didn't want to get caught up in legal jargon that I had no experience reviewing, and hiring a lawyer to read over the contract and advise me was well worth the retainer fee."
Protect yourself from future issues
When Bryan Clayton, CEO of GreenPal, a lawn-care service platform, started the company four years ago with two co-founders, the trio invested in drafting a buy-sell agreement at the outset. Clayton admits that "it felt like creating divorce papers on your wedding day," but he followed his attorney's advice, and they all signed the agreement.
Fast-forward three years and one of the co-founders wanted out of the business because he was getting married and starting a family. Fortunately, because they had invested in a buy-sell agreement at startup, the three founders had stacks of documents to refer back to, which laid out exactly what the exiting co-founder was owed for his portion of the business. "As you can imagine, it was a lot less than what he thought, and that agreement quite possibly saved our company," Clayton says.
Prevent damage to the business
Jonathan Fritz, who runs, NoExam, a life insurance brokerage that is 100% digital, with all employees working remotely, discovered about a year ago that one of his sales agents was soliciting the firm's customers on behalf of another company. She had apparently taken a position with another company while still working for NoExam, and "was siphoning inbound customers."
Fritz knew it was time to hire an attorney.
He spent $2,500 to retain counsel, who sent a cease and desist notice to the employee.
In general, when you have a lot to gain or lose with the resolution of an issue, whether that's negotiating a fair divorce settlement, avoiding going to jail, or protecting your invention or creation from being stolen, exploring how an attorney can help you is a smart step to take. That doesn't mean you have to hire them, but at least you'll better understand the potential downsides of your situation.