During operations, many small businesses often focus on sales, cash flow management, recruitment, and customer expansion. Consequently, legal factors are sometimes only paid attention to after disputes arise, when partners breach contracts, when employees file complaints, or when risks occur during business operations. From that reality, a common question arises: Does a small business need an ongoing lawyer?
In principle, not every small business is required to have an ongoing lawyer. However, if a business has numerous transactions, frequently signs contracts, has personnel, partners, or customers, or is expanding its business activities, using regular legal services can help the business prevent legal risks early on.
The article below analyzes when a small business needs an ongoing lawyer, when it only needs to hire a lawyer on a case-by-case basis, and the benefits that regular legal services can bring to a business.
Legal Basis
- The Law on Lawyers 2006 (amended and supplemented in 2012): regulates the principles, conditions, scope of practice, rights, and obligations of lawyers and law practicing organizations.
- The Civil Code 2015: regulates service contracts, in which the service provider performs work for the service user, and the service user is obliged to pay service fees as agreed.
- The Law on Enterprises 2020: regulates the establishment, management organization, reorganization, dissolution, and activities related to enterprises.
I. WHAT IS AN ONGOING LAWYER FOR A SMALL BUSINESS?
1.1. Concept of an ongoing lawyer
An ongoing lawyer for a small business is a form where the business utilizes the legal services of a lawyer or law firm on a monthly, quarterly, or annual basis. Instead of only contacting a lawyer when disputes arise, the business can receive legal advice throughout its entire business operation.
The scope of work for an ongoing lawyer can include contract reviews, labor consultation, internal corporate counseling, debt collection support, legal risk assessment, document drafting, negotiation advice, and assistance with daily arising matters.
For small businesses, an ongoing lawyer does not necessarily have to be an internal legal department. Businesses can outsource this service through service packages tailored to their needs and budget.
1.2. How Does an ongoing lawyer Differ from an Ad-Hoc (Case-by-Case) Lawyer?
Hiring a lawyer on a case-by-case basis is usually appropriate when a business has only one specific issue to handle—such as reviewing a single contract, advising on a dispute, or drafting a legal document. Once the work is completed, the service relationship may end.
Meanwhile, an ongoing lawyer will accompany the business over a longer period. The lawyer has the opportunity to understand the business model, how the business operates, customer groups, common types of contracts used, and recurring risks in the business’s operations.
Therefore, if a small business only occasionally encounters legal issues, hiring a lawyer on a case-by-case basis may be more suitable. But if the business frequently signs contracts, recruits, expands, or works with multiple partners, having an ongoing lawyer will help manage risks better.
II. WHEN DOES A SMALL BUSINESS NEED AN ONGOING LAWYER?
2.1. When the Business Frequently Signs Contracts
Contracts are an important foundation of business operations. Small businesses may sign sales contracts, service contracts, premises lease agreements, distribution contracts, agency contracts, cooperation contracts, or contracts with suppliers.
If a business frequently uses contracts without rigorous reviews, risks can arise from terms regarding payment, breach penalties, damages compensation, contract termination, confidentiality, or dispute resolution. In many cases, just one unfavorable clause can cause significant losses for a small business.
Therefore, a small business needs an ongoing lawyer when its business operations heavily depend on contracts. A lawyer can help standardize contract templates, review critical terms, and warn of risks before the business signs.
2.2. When the Business Has Personnel and Labor Issues Arise
As a business begins to hire personnel, labor-related legal issues will appear more frequently. Businesses need to pay attention to labor contracts, probation, salaries, insurance, internal labor regulations, disciplinary actions, contract termination, and obligations to employees.
If procedures are handled incorrectly, the business may face complaints, compensation claims, or labor disputes. For a small business, a single labor dispute can impact its finances, reputation, and operations.
In this case, an ongoing lawyer can assist the business in building an appropriate labor documentation system, advising before decisions on contract termination, disciplinary actions, or changes in personnel policies are made. This is how small businesses prevent risks rather than just dealing with them after they occur.
2.3. When the Business is Expanding or Raising Capital
Small businesses in growth stages often undergo many changes, such as opening new branches, cooperating with new partners, raising capital, transferring shares, changing contributing members, or restructuring the business model.
These decisions typically involve ownership rights, management rights, financial obligations, profit distribution, and the responsibilities of the parties. If agreements are unclear, the business may encounter disputes among members, shareholders, investors, or partners.
Thus, when a business is expanding, an ongoing lawyer can act as a legal risk gatekeeper before the business makes critical decisions. This is especially necessary for small businesses that do not yet have an internal legal department.
2.4. When the Business Operates in High Legal Risk Sectors
Some business fields have higher legal requirements than others, such as e-commerce, education, healthcare, finance, insurance, real estate, technology, personal data, franchising, or conditional business lines.
If a small business operates in these areas, handling legal matters only when an incident occurs may be too late. Businesses should have an ongoing lawyer to be advised on business conditions, contracts, customer policies, information security, advertising, complaint handling, and legal compliance.
III. WHEN DOES A SMALL BUSINESS NOT YET NEED AN ONGOING LAWYER?
3.1. When the Business Has Few Legal Transactions
Not every small business needs an ongoing lawyer right from the start. If a business is newly established, small in scale, has few employees, few contracts, and its business operations are not yet complex, hiring a lawyer on a case-by-case basis may be more appropriate.
For example, the business may only need a lawyer’s assistance with enterprise registration, reviewing a premises lease, or advising on a specific service contract. In this case, the business can save costs by using legal services on an as-needed basis.
3.2. When the Legal Budget is Limited
Small businesses often have to prioritize cash flow for business activities, marketing, personnel, and operations. If the legal budget is limited, the business may not need to sign up for an ongoing lawyer package immediately.
However, the business should still maintain the habit of consulting a lawyer before major decisions, such as signing a large contract, recruiting key positions, terminating cooperation with a partner, or handling debts. This approach helps the business strike a balance between cost and legal safety.
IV. BENEFITS OF AN ONGOING LAWYER FOR SMALL BUSINESSES
4.1. Risk Prevention Instead of Consequence Management
The greatest benefit of an ongoing lawyer is helping the business prevent risks early on. Instead of waiting for a dispute to happen, a lawyer can review contracts, check processes, advise on solutions, and warn of disadvantageous points.
For small businesses, preventing risks is usually much more cost-effective than handling disputes. A thoroughly reviewed contract can help a business avoid bad debts, obligations disputes, or unnecessary losses.
4.2. Saving Time for the Business Owner
Small business owners often have to handle multiple tasks simultaneously. If they have to research legal regulations, draft contracts, or resolve disputes by themselves, it can take up a lot of time without any guarantee that their solutions are correct.
With an ongoing lawyer, the business can quickly discuss arising issues, receive direction for handling them, and focus more on business. This is an important value for small businesses, as the time of the founder or manager directly impacts revenue.
4.3. Creating Professionalism When Working with Partners
A small business with a clear contract system, proper legal processes, and professional working documents usually builds better trust with partners, customers, and investors.
An ongoing lawyer can help the business standardize contracts, correspondence, terms of service, privacy policies, debt collection processes, and other necessary legal documents. This helps small businesses operate more professionally, even without their own legal department.
V. FREQUENTLY ASKED QUESTIONS
5.1. Is it mandatory for a small business to hire an ongoing lawyer?
No. The law does not mandate that every small business must hire an ongoing lawyer. However, businesses should consider it if they frequently sign contracts, have a large workforce, deal with multiple partners, or operate in high legal risk fields.
5.2. Is hiring an ongoing lawyer expensive?
The cost depends on the scope of work, consultation hours, complexity, and type of service the business chooses. Small businesses can start with a basic consultation package to manage expenses.
5.3. Should a small business hire an ongoing lawyer or a case-by-case lawyer?
If legal needs are minimal and infrequent, hiring a lawyer on a case-by-case basis may be suitable. If the business has numerous contracts, many employees, frequent transactions, or is growing rapidly, an ongoing lawyer will be more appropriate.
CONCLUSION
Small businesses are not required to have an ongoing lawyer, but in many cases, this is a necessary investment to protect business operations. When a business frequently signs contracts, has personnel, expands its scale, raises capital, or operates in a field with many legal requirements, an ongoing lawyer can help prevent risks and make safer decisions.
In contrast, if a business is newly established, small in scale, and rarely faces legal issues, hiring a lawyer on a case-by-case basis may be a more reasonable choice. The important thing is that the business needs to correctly identify its needs, not viewing legal matters as an ultimate final expense, but rather as a part of its risk management and sustainable development strategy.
