It is very easy for start-ups and SMEs to overlook certain key legalities in the rush to get their business up and running or to meet the growing demand from customers.
With tight budgets and small teams, few small businesses will have in-house legal expertise, so it is easy to delay seeking out proper legal advice, which can often appear very costly when charged by the hour.
But this is a mistake.
The law is a vital component of all aspects of business management and development, from employment and HR to client contracts and intellectual property (IP) – to name just a few.
Ticking the right legal boxes lays solid foundations from which you can build a thriving company. If you fail to do the groundwork, this can come back to bite you when you least expect it. So our message is loud and clear – “don’t wing it!”
One of the stumbling blocks is employing staff. Growing a company usually means fairly rapid recruitment, which in turn not only means administration for SME owners, but also comes with a raft of documentation vital to achieving good employment practice.
Company handbooks, contracts of employment, job descriptions and a whole host of policies can take a long time to draft from scratch and, the danger is, if you’re not an expert in this area you could be setting yourself up for a fall.
With ever changing employment law legislation and the UK Supreme Court having declared the UK Government’s fees for employment tribunals illegal, claims are on the increase, resulting in lost time and money for business owners who’ve failed to stick to the rule of law.
Contracts designed to be used to formalise deals with clients/customers and suppliers is another pitfall that business owners should beware. A commercial contract should be robust and protect the business in the event that a deal goes sour or a dispute arises over the delivery of products or services. These issues are commonplace in everyday business and to think that running a business will always be plain sailing is unfortunately rarely true in reality.
Another area often overlooked when building a business is corporate governance. Making sure a shareholders’ agreement is in place when you are starting out with a business partner is vital. Like a personal relationship, business partnerships can be great but over time sometimes feelings and ambitions about the direction of a business can change. In those cases having an agreement in place which covers a range of scenarios effectively acts as a ‘corporate will’ and protects owners as well as the sustainability of the business to adapt to changing circumstances over time.
But far from a picture of doom and gloom, getting this right from the outset will save time, money and stress in the long run.
Entrepreneurs are usually incredibly driven, passionate and effective in their area of expertise, upon all of which their business is built. However, this expertise rarely extends to law.
Lawyers study and then train in house at law firms for many years to develop proper legal expertise in the variety of areas that impact growing businesses, so it is generally best to defer to the experts.
This is where Gregg Latchams in-house lawyer service can be a big help. This subscription service gives smaller companies on tighter budgets access to an experienced lawyer at the end of a phone whenever they need advice, acting in the guise of an in-house lawyer, but without the associated fees.
Paying for an in-house lawyer service should be considered as an investment, which will pay dividends years down the line when you have built a successful, stable and valuable business.