Rhonda Abrams The Passionate Entrepreneur

Nobody likes lawyers. Even lawyers make lawyer jokes. Yet lawyers are a necessary, even valuable part of business life.

Taking care of your company's legal health is like taking care of your personal health: An ounce of prevention is a lot more pleasant than a pound of cure. I often see entrepreneurs end up in legal battles costing thousands of dollars that could have been avoided with a $200 trip to an attorney.

Your first visit to a lawyer should happen at the beginning of your business life. When I started my consulting practice, I spent two hours with a lawyer. We not only wrote a basic letter of agreement for me to use with clients, we also discussed how to price my services, collect overdue fees, and tax issues.

A number of other legal issues arise when starting a company. First is determining what corporate structure you'll take. Most of us begin as sole proprietors. There's no formal structure for a sole proprietorship, just make certain that you're the only one who has any ownership interest in your company.

But if you're going to form a partnership, a corporation, or a limited liability company, consult a lawyer. Be aware that if you're working with another person, you may be in a legal partnership even if you don't draw up any contracts, so it's definitely advisable to consult a lawyer. No matter how friendly and close you are now, draw up a contract spelling out who owns what, who does what, and what happens if you eventually divide or sell the company. Believe me, doing this is worth every penny it costs.

If you're new to business, you'll also want to discuss such issues as protecting the name of your company, necessary business licenses, taxes, and dealing with vendors and landlords. If your business has employees, consult a lawyer about issues of hiring and firing employees and what kinds of records to keep. If anyone is investing or lending you money, get a lawyer to draw up a clear contract with all the details of the financial arrangement.

Consultants and companies that hire outsourced workers need at least a basic understanding of how the law treats independent contractors. If you're not incorporated, and if you aren't careful, you can easily get into hot water with the Internal Revenue Service.

The best way to find a lawyer is by asking for referrals, especially from others in your industry. It's always better, and cheaper in the long run, to get an attorney who has experience with your type of business. Make sure you use a business lawyer; don't just turn to the "great" lawyer who handled your brother-in-law's friend's divorce.

Most lawyers charge by the hour, but some have set fees for specific tasks, such as incorporation. Don't hesitate to interview your prospective lawyer and ask about costs before engaging their services. You have the right to choose someone you're comfortable with and can afford.