How Do You Know If You Need a Construction Lawyer?

Construction is one of the most competitive fields with over 3.6 million U.S. construction companies in business today. Although some construction companies are able to become highly profitable, the reality is that many construction businesses close their doors after only a couple of years.

Bad contracts and legal disputes are some of the main reasons why construction companies close their doors. If you make the wrong decisions, you could even be personally liable for losses incurred by your construction company. As a result, it is crucial for entrepreneurs in the construction field to understand when they need a lawyer at their side.

Organizing Your Business

Many construction companies fail only because their owner failed to put in the minimal effort required to get their company organized properly from the beginning. You may want to consider certain types of business entities that can give your company limited liability protection, such as LLCs, S-corporations, or LLPs. If you elect to form a corporation, you will need to take the right actions on a regular basis to keep your business in good standing.

For instance, you may need to hold board meetings or distribute earnings from your business using specific legal processes. Failing to follow the right steps may not result in the voiding of your business registration, but the benefits of a corporation may fail to be upheld in court if you are not following necessary legal processes.

Construction lawyers can help your business to reduce taxes in some cases. For instance, construction lawyers are often able to organize LLCs in a way where owners can legally avoid most of the self-employment tax that they would normally be required to pay. Lawyers can also keep businesses in compliance with laws involving the collection of state and local taxes.

Lawyers can also help your business to determine whether you need to have certain licenses before starting operations. In some states, a portion of your staff members may also need to have certain licenses or certifications.

Additionally, lawyers can help you to structure your employment agreements in a way that will protect you if there is a dispute in the future. Employment agreement structuring can be especially important for minimizing liability when an employee gets injured on the job.

Designing Contracts in the Right Way

When you first start your construction company, you may be eager to dive into your first project as soon as possible. Talking to a lawyer about how to structure your contract may seem unnecessary. After all, the client you are working with may be someone that you know well and believe you can trust.

Although many projects may go well with only a simple contract, the reality is that do-it-yourself contracts are rarely upheld in court. Your clients could eventually sue you in a way that results in astronomical damages. To prevent contractual disputes, it is crucial to work with an attorney to develop a legally binding contract.

Construction companies vary widely, so it is important for construction companies to create custom contracts that are designed for the specific services they offer. It may seem tempting to print off a contract template from the internet, but the reality is that you need a contract that covers the specific job you are doing.

In many cases, construction companies can safely reuse contracts in the future once they have been developed. Nevertheless, you should still have your lawyer look over your contract before submitting a bid. Lawyers can help you to refine your contracts in ways that will provide you with additional protection if something goes wrong. Specific contractual terms can even give you a major advantage in court if a dispute arises.

Finally, lawyers can be helpful for creating contracts that are more likely to win in a bidding process. Many companies soliciting bids are mainly concerned about contractual terms, and construction lawyers have the experience and expertise necessary to understand what terms clients are looking for. As a result, your lawyer can be an important partner for helping your business to win more jobs than your competitors.

Handle Disputes Effectively

Disputes will inevitably arise at some point. The way you handle disputes will determine whether your company realizes growth or goes into bankruptcy. Construction lawyers are specialists at handling disputes because most clients only reach out to their lawyer when they have a problem. In many cases, construction lawyers can advise you on a course of action that will prevent disputes from escalating into serious lawsuits. If a lawsuit is submitted against your company, your lawyer can negotiate to settle the case or even have the case dismissed.

It is important to keep in mind that construction lawsuits can have serious ramifications that exceed the compensatory and punitive damages companies can be required to pay in court. For instance, if there is a major judgment against your company, finding future clients may be difficult. As a result, construction lawyers are important partners for deciding on the best course of action when a dispute is ongoing. In many cases, construction lawyers can prevent cases from going to court or help your company to get records sealed. As a result, you and your company can maintain your good image in a way that enables you to continue finding profitable clients.

Using Your Lawyer’s Network

Construction lawyers have a vested interest in the success of their clients. Consequently, lawyers are often able to provide a wide range of resources that can help their clients to succeed. For instance, if you develop a strong relationship with a lawyer, you will usually be the first to know when new legislation introduces opportunities in your industry.

In the construction industry, many opportunities arise from city contracts or major local businesses that want to expand their footprint. Construction lawyers are usually the first to know about these types of deals, and they may be able to refer you to big jobs. As a result, working closely with your lawyer can help your company to grow in ways that are difficult to achieve on your own.

Deciding Whether You Need a Lawyer

The vast majority of construction businesses can benefit from having a lawyer at their side. Potts Law in Dallas, Texas, offers a team of skilled lawyers who are true experts in the construction field. Give Potts Law a call today to learn how a lawyer can help your business to grow.

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