Small-business owners need legal counsel as much as larger organizations
by Mark S. Lee
Seeking legal advice for entrepreneurs is a daunting task for some while others don’t believe there’s a need for an attorney. However, having legal counsel is just as critical for a small business owner as is for a larger organization.
For example, do you know the legal ramifications of a failed business relationship? Do you have the right legal entity for your business that reflects your vision for the company? And do you know how you’re protected under the law under various scenarios? These are all questions that can be answered by legal counsel.
Business is complex and an attorney can help you navigate and understand potentially dangerous and unchartered waters that can ultimately sink your business.
I recently interviewed Gibson for her thoughts on legal affairs and its importance for entrepreneurs.
Lee: What were key motivating factors for you becoming an entrepreneur?
Gibson: Entrepreneurship was attractive to me for a couple of reasons. First, I felt as though I could have a greater, direct impact with my clients by managing my own operation. With owning your own business, you have a unique flexibility and great amount of autonomy that allows you to adapt and adjust promptly, in order to respond to different problems and challenges that clients may be confronted with. I can reach quick decisions without having to engage a hierarchy. This is of great benefit to my clients that need solutions and need solutions now.
The ability to truly be innovative in my practice was also attractive to me. As an entrepreneur, I am well-positioned to introduce new ideas and unique and unconventional ways of achieving desired outcomes. Everything about me and my practice is unconventional. To say I did not choose a traditional path after graduating from law school is an understatement. However, I drew from my experiences, clerkships, mentorships and networking connections, and ultimately made a decision to strike out on my own.
What I love most about entrepreneurship is how closely involved I become with my clients. I really become part of their “team,” which causes me to be personally invested in their goals. I take their issues on as my own.
Lee: You moved to Detroit from Virginia. What are your thoughts about Detroit and why is having your business here important to you?
Gibson: My family and I moved from Virginia to Detroit when I was very young. I always put a spin on that infamous Chrysler tagline and say: “Made in Virginia, Imported to Detroit.” So, I consider myself a native Detroiter, like any other native would. While I spent a significant part of my childhood in Virginia, visiting with close family who still lived there, I grew up on the west side of Detroit and my parents kept me very involved in the community and our church, which was also located on the city’s west side. I attended grade school on the city’s east side. As a result, I was fortunate enough to experience so many different parts of the city, so many different cultures and phenomena and learned so many valuable lessons here. Detroit is what I know and it is so much of who I am. The city gave so much to me. Operating my business here is important because I feel personally charged to settle up the favor. After all, home is where the heart is.
Lee: As an entrepreneur, why are you bullish on Detroit and what do you think the city’s future prospects look like for aspiring business owners?
Gibson: I am personally invested in the city of Detroit, and uniquely so. Detroit raised me, literally. Beginning at about age 17 and ending around age 27, I worked for City Council (initially for Sheila Cockrel, then Saunteel Jenkins) in various capacities during the summers, winter breaks, throughout law school and shortly after my completion of law school. I was able to touch and feel policy as it was formed by researching and drafting proposed legislation and risk management initiatives, interacting with various departments on a multitude of issues, participating in various working groups and ultimately facilitating approvals. I was able to see what worked and what did not work. I was out in the community, helping citizens deal with issues in their neighborhoods, attending block club meetings, civic club meetings and the like. At the same time, toward the end of my tenure, I had the opportunity to work intimately with several major development projects involving various rezoning, tax incentive and land sale requests that went before council. Vetting these projects to truly ascertain their impact on the city and its residents had a profound impact on me.
In my short time in these capacities, I was able to see firsthand how the dynamics of our city began to change, leaving to go full time with my practice just when the groundwork was being laid for the emergency manager to come in. I made a commitment to stay active in the efforts for its resurgence. A significant subset of my practice now involves helping individuals/businesses navigate city processes as they invest in the city.
I think the time for business owners in the city of Detroit is now. The revitalization efforts have created an environment in which small businesses can thrive.
Lee: What advice would you give to those wanting to start a business?
Gibson: From a “business advice” standpoint, you must start with a plan —one with clear, measurable goals and objectives and pragmatic projections based on various factors that impact your specific business, including market trends. Next, you need to engage professionals to ensure you are making the right decisions with matters that have certain implications —more specific to my practice areas, legal and tax implications. It may take a small investment, but it is extremely important to have peace of mind to focus on your business operations and have these all-important pieces handled properly by a trusted professional.
From a more personal standpoint, you must be disciplined and you have to be committed —not just interested —to putting in the work, no matter what challenges may arise. Undoubtedly, challenges will arise. This takes strong perseverance.
Lee: Many small business owners don’t have legal advice because they have a business partner might who’s a friend, don’t a need for an attorney or perceived costs are too high. What do you tell those who don’t see a need for an attorney and why should entrepreneurs have legal counsel?
Gibson: From entity set-up to basic contract drafting and employment policies, the biggest mistake I have seen is entrepreneurs “doing it on their own” based on what other people have done and what they have heard from the general public, family members and friends. In every decision you make that impacts your business, whether this is taking on a partner, making employment decisions, rehabilitating your building or leasing space in a new location, you need to understand the laws that govern what you are doing and ensuring that you perform due diligence. For example, if you choose to have a partner, what provisions are in place in your organizing documents that will determine what happens if there is a disagreement in major decision making? Or can you legally ask “those” types of questions in a job interview? Can you really fire someone for that reason? Can you even operate the business you want in the area that you have chosen?
You want to focus on your craft, not guessing what the right answers are and risking everything by choosing the wrong ones. It can cost you everything! Make the small investment to cover your bases. My father always told me that you should not only measure “cost” in dollars. This could not be any truer. The value in having legal counsel far outweighs any monetary sacrifice. My firm works specifically with small businesses in addressing their legal needs but also staying within their budget limitations. Most people will be surprised how affordable it actually is to seek legal counsel, when considering the value.
Lee: And how does one determine the best legal structure for its business?
Gibson: Talk to a professional before you make the decision. Clearly communicate your vision and your needs. There are many different factors that impact decision-making to this effect. You want someone with the requisite expertise and knowledge helping you along the way.