My neighbor is a very successful restauranteur who owns 14+ restaurants throughout the state of South Carolina. His restaurants run 12 to 16 hours a day, seven days a week. Recently he shared a little secret with me that seemed to emerge from his mouth as more of a humorous fact rather than as a serious warning. His message? “You haven’t made it in business until someone has sued you. And likely it’s more than once”.
The last thing any business owner wants is to be sued. So we do everything we can to run moral, ethical, and customer-centered businesses in the soulful belief that we are too nice, or too accommodating, or too willing to problem solve to become the target of someone else’s misfortune or harmful motivation.
Unfortunately, we live in a time when perception is a reality. When loopholes and lawyers exist, they will stand more than ready to take a swing at our businesses to line their egos and pockets with cash.
You may be a one-person, self-employed, entrepreneur or an owner of a company with many employees. It doesn’t matter which category you fall into; your protective instincts need to be the same. After all, your business is your baby, and you need to protect it at all costs.
So the question becomes:
- Where do I start?
- What do I need?
- And how much does it cost?
Most startup companies are very lean, and as they continue to grow, they will rely on the good, better, best scenario when it comes to legal protection. The first and foremost items to look at will be incorporation, contracts, agreements, website privacy policies, and refund policies.
Free Policy + Disclosure Options.
For example, with the “good” scenario, based on a startup budget, (i.e. none), and risk exposure, (i.e. less than a handful of customers), you may first opt to use a free website policy generator, disclosure, or disclaimer template. By no means is this a long-term, viable solution, but hey, it’s a start. At the very least it will let your visitors know that you have some sense of legal ease in place. You are open for business (although still at risk since the documents are homegrown).
Affordable Legal Services.
A few months down the road, your baby begins to grow, and you are now acquiring sales and repeat customers. Wonderful. It’s now time to look at updating your startup legal documents to a “better” solution. Something affordable but with a bit more legal teeth to keep you in the game and with some sense of protection.
At this point, you may want to ask friends or business acquaintances for referrals to local corporate attorneys. Ideally, one you can meet in person. Most attorneys will give you one hour of free time to listen to your needs and may even offer a bit of advice in that meeting. Legal fees can range anywhere from $150 to $500 per hour, so make sure you understand their policy before you make an appointment.
Your primary objective of this meeting is to obtain a written business legal plan – one that provides a list of titles of all of the documents, agreements, contracts, and policies that the attorney deems necessary to protect your particular business. Although this attorney may be too expensive to use to draft these documents at this time, the analysis will become a valuable tool to help guide you to the next step.
Once you have your legal plan, you may then want to consider becoming a subscriber to a membership service such as Legal Zoom, Rocket Lawyer, or another online subscription service. These types of services offer affordable legal documents, are “better” than the “good” scenario, and are often considered the next step to legal protection.
Be aware that these types of services have thousands of pre-written contracts and even opportunities to chat with attorneys over the phone, but watch the fine print. They are not likely to stand behind their products; only give you general legal advice and documents that leave you on your own. Here is an example of a disclaimer copied from the footer of such a website:
“We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies” – LegalZoom.com.
Top-Notch Legal Advice.
Rock and roll! Your business is starting to gain momentum, you have repeat sales, you may even be cracking the $5,000 to $10,000 per month revenue hurdles. Great! It’s time to spend a month’s worth of revenue and get yourself a real, face-to-face attorney who can review and revise all of your current agreements and get you to the “best” scenario.
When looking for the right lawyer, make sure that they are an expert in your field. For example, if you have a licensing model, make sure your attorney specializes in licensing. If you have a sales model, make sure your attorney is an expert in sales contracts, including non-compete agreements. If you have a service model, make sure your attorney is an expert in the laws pertaining to the service industry. Don’t be afraid to ask for “startup company discounts” or quotes in writing. Make sure you understand the fees and what the fees will entail, including attorney-client agreements (usually called engagement letters).
In summary, YOU are the first line of defense when it comes to protecting your company by making sure that you offer fair, ethical, and honest business practices. When the time comes, (and after your best legal solutions are in place), be prepared for lawsuits.
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Disclaimer: Unless otherwise specified, authors of The Work at Home Woman are not licensed legal, financial or medical professionals. The information on this website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. If you need specific legal advice, consult with an attorney who specializes in your subject matter and jurisdiction.
Jan Pinnington is a Nutritional Consultant, wife, mother, and “consummate foodie.” She specializes in teaching nutrition and healthy recipe preparation to kids. In an effort to fight childhood obesity, Jan’s company, Healthy Hands Cooking, teaches other women across the U.S. to do the same. Her philosophy? Love what you do, do what you love, and share your experience with others.