Deciding to start a new business can often be an exciting prospect, but navigating the rocky world of business can also be intimidating. While many business people are often able to successfully navigate the many diverse areas of business, which they previously knew little to nothing about, such as marketing, IT, HR, accounting and more, the one area which they are likely to fail miserably at, is when it concerns business law or legal matters related to their business. This is because the law is or can be such a complex subject matter that only thorough understanding of all it’s tenet will suffice for a successful application.
Additionally, the consequences of running foul of a (business) law can often be more problematic than say not following some basic accounting or marketing principles.
Which is exactly why chances are high that a small business or startup founder will eventually need the help or advice of a business lawyer in the operation of your business at some point. Or at least the legal aspects of it.
It should however be noted that care must be taken to hire the right type of lawyer for your specific needs because not all business lawyers are the same. More specifically, this refers to the distinction between a corporate lawyer and a business lawyer.
While a business and corporate lawyer are often used interchangeably in conversations, their jobs and functions are often quite different, even though there are times when they overlap.
Corporate Lawyers at a Glance
Whenever the word “corporation” is used in everyday conversation, it is often thought of as, or synonymous with a very large national or multinational company. Referring of the likes of Apple, Microsoft, Google, Chevron et al. However, as many lay people have come to find out when they are speaking to a business attorney about creating an LLC for their business, the everyday Jane Doe can also form a corporation even though that company is a small one-woman owned business.
Therefore, while a corporation can technically be a (small or micro) business, conversely, a (small or micro) business can also be a corporation. Therefore, the one important distinction between a corporate lawyer and a business lawyer is the fact that the one who flies under the ‘corporate umbrella’ will more often than not be one that works for, or with a large national or multinational company. Sometimes, this might be a company that has their own in-house counsel, general counsel, staff attorney or legal department, or they may otherwise retain an external law firm on a regular or contracted monthly retainer.
Additionally, the corporate lawyer’s main objective will be to serve the interests of the corporation, and not the owners of the business or those who run it.
The reason behind the need for this dedicated legal team is perhaps because of the complex and/or constant need for legal advice or input that these businesses have need for, chiefly because of their large size and/or complex business transactions. For example, a large organization with a lot of employees means personnel conflicts or issues might be common, so there might be a need to ensure that whatever is done to resolve these conflicts by the HR department are within legal confines.
A corporate lawyer will also be found in a well-organized, well-run company with lots of formalized and mature processes, which again is usually a feature of large companies, as opposed to smaller ones.
That notwithstanding, a corporate lawyer will usually perform more or less the same functions as a business lawyer who works on an ad-hoc basis. Referring to things like giving general business advice, representing their client in civil litigation, contractual matters, employment matters and much more.
Business Lawyers at a glance
As has been intimated in the above brief on corporate lawyers, business lawyers are much more likely to work in smaller law firms comprising of one, two or even five lawyers. They are also less likely to work with large national or multinational companies, though this is not an absolute rule. Moreso, the nature of their relationship with their client is often less likely to be one that involves very complex transactions, as often happens with large and multinational companies.
There is usually, but not always, that loose relationship that can exist between a business lawyer and a company, unlike a lawyer or legal team that is hired as an in-house and exclusive counsel to a large company.
The Small Business Administration (SBA) defines a small business either in terms of its annual revenue or in terms of the number of employees the business has, depending on the industry. These numbers range from a maximum of $750,000 – $38 million, to having less than 100 -1,500 employees. And with the vast majority of businesses in the US being small businesses, according to the above SBA definitions, it is safe to say that there will be far more business lawyers than corporate ones.
So perhaps the more appropriate question should be how to find the “best” lawyer for your business, and not necessarily about being able to differentiate between a corporate or business lawyer, especially given the fact that both of them are usually able to do the same things for you. This is of course in stark contrast to needing to choose between a small business attorney and a personal injury attorney, both of whom are miles apart in what they do.
In conclusion, the main thing to keep in mind when looking to retain a lawyer, is to ensure that you do the proper research in finding the right lawyer for your specific needs.