The Importance of Effective Legal Counsel
Whether you like lawyers or not, if you are a business owner, it is inevitable that you will have to work with one sooner or later. In fact, it is wise to have an effective legal counsel in your business team from the get-go ie. Someone who understands how you work and most importantly how your business works.
Most business owners put off getting sound legal advice or having a lawyer advise them until they are sued or need to sue. More often than not most of these legal issues can be mitigated by having some practical legal processes in place.
Unfortunately, most people see “legal” as a risk management arm of any business or corporation which is, in fact, incorrect. Legal is far more than just risk management. With sound legal advice from a lawyer who understands your business goals, you will be able to reduce losses and run a profitable business.
For example, every business owner should send periodical reminders on outstanding invoices. If this is done consistently, then you will be able to track all unpaid invoices and eventually decide whether you wish to proceed with legal action or whether you wish to continue doing business with this person or company.
Always have an agreement drawn up, albeit a simple one. This is to confirm the terms of your engagement and parties obligations under the agreement. One of the most important clauses in any contract or agreement is the termination clause. Are there penalties for early termination? What is the notice period for termination? What type of breaches (if any) should trigger a termination of the said contract?
If mid-way through the agreement parties decide they want to vary or alter the terms of the agreement, it is prudent to ensure that these variations are made in writing and confirmed by both parties as either a supplementary agreement or an agreement that supersedes the previous one.
With the right legal advice, you will be able to decide on the most suitable business structure. Do you wish to set up a private limited company or a limited liability partnership? Your decision would depend on the type of business you run and what your expansion plans are for your business. You would need to consider the advantages or disadvantages for different corporate structures and what would best fit your own unique business model.
In summary, having effective legal counsel:
- Saves you money – You may have to pay your lawyers legal fees, but on the long run you will spend less money on dispute resolution and other incidental costs.
- Saves you time – Leave legal matters to legal counsel and focus on building your business.
- Means finding a trusted business partner – Find a legal counsel who is genuinely interested in seeing your business do well. As a lawyer myself, I can say that nothing is more satisfying than seeing my client’s business prosper as it is a reflection of sound legal advice and my efforts in helping to build the business.
- Means having a lawyer who knows your industry well – and is able to connect you to the right parties in order for you to expand your business or create new opportunities. As lawyers, we have a whole database of clientele and connections that may be beneficial in helping you grow your business.
Speak to your lawyer on the various ways in which lawyers bill for their time and what would best suit you and your business. You may want to consider a monthly retainer if you do not have in-house legal counsel but still, need a lawyer to look into your legal needs. Alternatively, you may want to ask for advice on a case to case basis, which means your lawyer may charge you a flat fee or an hourly rate.
Just because you don’t see a problem now, it doesn’t mean there isn’t one or that there isn’t a better way to grow your business.
FOUNDER OF MESSRS RAVINDRAN