They say “No business is too small to have legal problems but many businesses are too small to afford to have legal problems”.
It’s natural for small enterprises to try to save money by eliminating unnecessary set-up expenses as they try to build their business. However, one expense that is often lumped into the unnecessary basket is having your business operations professionally reviewed by a legal professional.
Many businesses mistakenly believe that preparative legal services are only for large operations with complex structures and relationships, but those small businesses can fly under the radar and avoid being found by legal trouble simply because they fit into a lower tax bracket or because they are a one man operation. However is this really the case?
No. Lets be real. Whether your enterprise is large or small you are at equal risk of facing a lawsuit at the hands of an employee, client, vendor or another third party. Once an issue progresses to this point it becomes simply a matter of how much you need to pay to make it go away.
The unfortunate truth is that when such costly legal troubles arise, small businesses are often the least equipped to bear the commercial, financial and emotional expense and often end up in dire straights.
Why do small businesses need a lawyer?
Increased business efficiency
Regardless of the size of your business, the legal issues you will face are the same. You will likely still need premises out of which to trade, a business structure, client agreements, branding and workplace policies, all of which have the potential to create opportunities for legal dramas if not handled appropriately.
Wrong decisions or failing to follow the right procedures can also lead to serious business inefficiencies. For example, choosing to use a business structure that is not appropriate for your purposes could cost you in terms of tax, liability or may result in you having to pay fees or prepare reams of documentation each month for minimal benefit.
Lower Legal Fees
Many small businesses put off obtaining legal representation until its too late and they are being sued. The problem with this approach is that, once you are already embroiled in a legal dispute, the only option you have is to seek legal representation to resolve the issue. Legal disputes can be long, stressful and costly.
Furthermore, the amount a solicitor will charge to extricate you from a legal drama will usually be many times more than the amount they would charge to keep you out of trouble in the first place. Preventative legal services result in lower legal fees in the long run.
Protect your brand
Protecting your intellectual property such as trademarks and logos is the first step toward being able to defend what you have worked hard to build. Are you certain that you have the legal right to use your business name and logo? Are you sure something deceptively similar is not already being used by another business? A ‘no’ to either answer could result in you being sued and having to rebrand your entire business from square one.
A good lawyer can provide you with vital support and advice with regard to your brand both in Australia and abroad. They can also ensure that all of your trademarks and logos are properly registered and legally protected.
Branding can also be severely damaged by protracted and lengthy legal proceedings, as negative media can impact your commercial reputation. While some litigation cannot be avoided, most of it can be, or at least resolved much more quickly, by getting all your legal ducks in a row before problems arise so that your rights are clear and enforceable.
How can small businesses source affordable legal advice?
One thing is for certain if you think you can’t afford legal advice you certainly can’t afford the repercussions. The good news is affordable legal services for small business are out there and won’t cost you a fortune.
Many firms will provide commercial legal services or advice on an as needs basis without you having to keep them on a retainer. Some will do specific tasks at a fixed fee while others may charge a competitive hourly rate. In any event, do your research, find a good business law firm you are comfortable with and build a rapport with them. Once they know your business they will be in a much better position to protect it.