There are all kinds of different business models. Some are rather simple, while others are complex. If you own a company, though, or you operate one, you might want to at least consider having a lawyer on retainer.

We’ll take a moment right now to talk about why your business might want an attorney on retainer. We’ll also talk about possible drawbacks.

What Does Having a Lawyer on Retainer Mean?

Maybe you’ve been in a situation where someone says they’re going to call their lawyer. This indicates that they have one ready, at their beck and call. This is essentially what having an attorney on retainer means: you’re the lawyer’s client, and you pay them a small fee regularly.

The lawyer will then give you preferential treatment over their other clients. This isn’t the same thing as calling personal injury lawyers if you suddenly need to sue someone. It’s more what a business does if the owner knows they often need a lawyer for legal advice or some other purpose.

What Are Some Possible Advantages of this Arrangement?

One nice thing about having a lawyer on retainer if you’re running a business is that they already know all about your company. If you ever get into a complicated legal entanglement, you don’t need to go through the whole process of explaining what your business is and what it does.

The lawyer already knows the broad strokes. If you’re the sole client of the lawyer you have on retainer, though, they know more than that. They know virtually every detail about your business, so they can immediately leap into action if you need them for anything.

You’ll probably only have a lawyer on retainer when you are their sole client if you have a large, highly lucrative business. However, even small or medium-sized companies might use this model. The attorney can simply take on other clients when you don’t need them.

Now, let’s look at some specific things your lawyer on retainer can do for you.

They Can Incorporate Your Business

If you decide you have the financial resources to put a lawyer on retainer and have them work for you, your relationship with them might begin when they draw up the papers to create your business. If you are putting together an LLC, which is useful for tax purposes, your lawyer can do that for you.

You also might decide to go with a C-Corp or an S-Corp. Each of these has positives and negatives, and your lawyer can explain them to you. Which one you choose will have significant implications when tax time rolls around.

Disgruntled Employee Situations

You might have a situation sometimes where you have a disgruntled or hostile employee. You might terminate them for cause, but then they may decide to sue you. They might level all sorts of accusations against you if they’re mad enough.

If that ever happens, you’ll be happy to have that lawyer on retainer who can defend you in court. They can speak for you, so you don’t say anything out of line.

Even if your lawyer is not a litigation attorney, they can point you in the right direction. They will at least be there so you can discuss your strategy. You won’t have to spend a lot of time worrying about the ex-employee, and the situation will not slow down your day-to-day operations.

Contract Breaches

You can turn to your attorney if you ever have to deal with a contract breach. That does occasionally happen in the business world, and when it does, you might have to appear in court to sort out the situation.

If a contractor or vendor relationship goes bad, your lawyer can start with a politely worded letter telling them that they’re in breach. That may be enough to convince them to honor the contract. If it takes more than that, and the vendor or contractor is in an intractable position, your lawyer can tell you what to do then as well.

Are There Any Drawbacks?

As for potential drawbacks, if you have an attorney on retainer, the biggest one is probably if you’re paying them a nominal fee, but you don’t have anything for them to do. That’s why you should only use this model if you’re sure you’ll have plenty of regular work for them.

Consider your business model, and then determine whether having a lawyer ready at all times is the best option.