Most entrepreneurs don't give much thought to how to deal with professional vendors (such as bankers, attorneys, accountants and so on). They just dive right into their business and don't think about how they should treat these people, what their vendors can do for them and what their vendors in turn are looking for in a client. With a little thought and effort, you can ensure that you get the most from your vendor relationships.
Your banker, attorney and accountant each have the ability to drastically influence the success of your business. It's very important that you develop long-term, personal relationships with them--if you do that, when you hit the inevitable bumps in the road, they'll be there to help you.
Your attorney is perhaps the ultimate "outside insider"--the attorney-client privilege protects anything you say to him, so you're able to confide in him without worry. Make sure that he completely understands your company, as well as your goals for it. From the other side of the relationship, you should take the time to understand what your attorney does, how his business works and what he's looking for in a client relationship.
Your attorney's primary goal is to protect your interests. Attorneys take that job seriously, and their training gives them a different perspective than that of many entrepreneurs. If you're like most business owners, you will sometimes receive advice from your attorney that sounds a bit overprotective. Understand that this is his job. What you must do is take the advice and then make your own decision. For example, my company came up with a mutual non-disclosure document, and when our attorney reviewed it he wanted me to modify it so that it was more in my favor and not so even-handed--he was just trying to protect my interests. I felt that it was an important gesture to our potential business partners to be able to show them a document that protected them as much as it did us. In my mind, this was a business decision--not a legal one--and it if turned out to be a wrong one, it was my responsibility. Just remember--listen to your attorney's advice, weigh it carefully and then make your own decision. Also, be smart enough to realize when you're in over your head or unfamiliar with a particular situation, and let your attorney help you.
A common legal mistake is to try to save on the cost of an attorney and handle your own incorporation. You many have seen ads in magazines or on the internet proclaiming that you can "incorporate for $40," for instance. This is a good example of getting what you pay for. The incorporation process shouldn't be automated and put into a box. It should be a custom process--you need to make sure that your corporate documents (by-laws, articles of incorporation, shareholders agreement and so on) fit your company and your goals. You want your documents to reflect the nature of your business and protect you from liability as much as possible. A boilerplate incorporation process just won't do these things.
If you're going to spend the enormous amount of time that's required to build a business--and even stake your future on it--you really want to make sure that your legal foundation is solid. When you're starting out, many legal issues are confusing. The best way to ensure that your foundation is solid is to sit down with your attorney and let him go through the pros and cons of each issue, weighing your situation with each one.
The most important point in this article is that you need to nurture your relationship with your attorney. The more he knows about your business, and the better you know him, the more value you'll receive. Develop that close, long-term relationship, and you'll have someone you can depend on in your corner.
For more information, read the other articles in our three-part series on professional vendors:
Keith Lowe is an experienced entrepreneur who is a founder and investor in companies in several industries. Lowe also mentors new entrepreneurs; serves as past chairman of the board for Biztech, a nonprofit high-tech business incubator; and is a co-founder and officer for the Alabama Information Technology Association.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.