Legal disputes are an unfortunate side effect of doing business. Eventually, all businesses will have to face them so it’s important they’re properly equipped to cope when the time comes. While reaching out to a third-party legal team is always an option, having a legal department and definitive procedures in place within your business is key to avoiding and mitigating lawsuits
With an internal legal team installed, you will have an immediate team working to defend your business in case any legal action arises, they can also take legal action against other entities on your behalf. As they are actually employed by you, they also have a vested interest in your concerns that a third-party firm wouldn’t have. But how do you go about putting this team in place?
To create your legal team, you should employ skilled legal individuals who have experience on working in the legal side of a business, starting with a solicitor.
Choosing a solicitor
Large corporate entities will generally have their own solicitors on staff but if you are an SME business you will likely be outsourcing an individual solicitor to work alongside your business or hiring one outright. Make sure you choose and equip a high-quality solicitor with experience dealing in business specifically. There are dozens of different types of solicitors, so you want to ensure you employ one that knows the business world inside and out.
If you hire a less able or more general practitioner, then you could end up having to file a professional negligence case against the solicitor due to them not doing their job properly and leaving your business in a worsened position. To avoid this potential outcome, put the work in on the ground floor, so to speak.
Keeping documentation
You should keep hold of all important documentation such as contracts and invoices. These could be necessary if you have to take or defend legal action. Whether this is digital or physical documentation, everything must be up-to-date and filed away in a secure location.
If you’re struggling, consider hiring an accountant to keep on top of your documents. They might more commonly be associated with financial tasks but they will also be trained in auditing and will know what they need to keep hold of in case a legal problem should occur.
Selecting a structure
Most business structures are either sole proprietorships, corporations, limited liability companies, cooperatives or partnerships. Each has their own legal pros and cons with a sole proprietorship being the easiest to setup.
For smaller businesses, this might be the best course of action, however, there is little hope for expansion with a sole proprietorship. Partnerships and LLCs provide greater chance for expansion but there are significant legal complications that you’ll want to consider.
Above all else, do your research. You’ll want to understand the basics of intellectual property law and financial law at the very least if you want to make an informed decision on your legal team.
