As a business owner, you are usually run off your feet with the challenges of operating your business. The last thing you need to worry about is a legal problem. Many business people put off dealing with a legal problem because they don’t know where to turn, don’t have the time, or most often, are afraid of how much it will cost and how much time it will take.
Legal issues come in many forms:
· A customer failed to pay an account despite many promises. · You just received a letter from a government agency. · You just found out that your former manager has set up a competing business and has stolen your best customer and one of your key employees. · You have just been sued for $100,000. · Someone told you that one of your standard form contracts won’t stand up in court and you are worried about it. · You have a dispute with your landlord. · You have a problem with a US or European customer. · Your business has been defamed on the internet. · You just found that your warehouse manager has been sexually harassing a female employee. · An employee is damaging your business but threatens to sue if you fire him. You are not sure how to handle it. · You are involved with a Workplace Safety Insurance claim.
These examples are just the tip of the iceberg of the kinds of legal issues business people run into frequently.
Tip #1 – Seek out legal help at the first sign of a problem
Suppose a competitor has been passing off its business under your name and it’s costing you customers and sales but it’s hard to estimate the amount. Unless you act promptly, it may be too late to seek an injunction from the Court. If you think you have a claim against another party under a contract, a limitation period begins to run from the time the contract is breached and usually expires two years later. It’s not a good idea to leave the claim to the last minute.
If you have an issue with an employee who is working unacceptably, it’s important to develop a legal strategy as early as possible. The longer you wait, the more it may cost your business.
The short point here is that it is important to seek advice as soon you detect a problem and before anything has been done to make it worse. Crisis management is always more expensive and time-consuming than early response.
Tip #2 – Have a team of lawyers to call on when you need them.
Every business should have a team of on-call lawyers. This is less expensive or complicated than it sounds. All you need are the telephone numbers and email addresses of trusted corporate, employment law and litigation lawyers. Depending on the nature of your business, you may also need an intellectual property lawyer, who deals with trademarks, patents and copyright. You may even need a tax lawyer because not all tax issues can be solved by an accountant.
If the amount of your legal dispute is very small, such as a claim or complaint by a customer for $1,000 or less, it will be uneconomic to hire a lawyer. Fortunately, there are other helpful resources. The BBB has a dispute resolution process which permits BBB businesses and their customers to resolve disputes by arbitration or mediation. You don’t need a lawyer and the only cost is a small administration fee. More information about this process is available on the BBB website.
If your case is in the Small Claims Court ($10,000 or less), you might need a paralegal who specializes in these kinds of cases. Paralegals are now regulated by the Law Society but they are not lawyers and they are not a substitute for an experienced lawyer.
Tip #3 – Learn what to expect when a dispute arises.
As a business person, you have learned that success is often the result of building relationships. The relationships you build with your lawyers can be just as important to your business success as the ones you have with your customers, suppliers, banker and insurance broker. A relationship with your lawyer built on mutual trust and respect will save you many sleepless nights over the years and probably make or save you a lot of money.
There are several ways to find good lawyers for your business:
- Ask business associates or relatives if they have someone to recommend. If you get a recommendation, find out more about the firm and the lawyer by using some of the research methods below. · The internet is a very useful resource for finding a lawyer but you have to be careful. Any lawyer can list with various online legal directories. Anyone can have a flashy website. You have to move past the flash to find the substance.
- When looking for a lawyer on the internet, look for someone who has experience in the field you require. The first name on a Google search may not be the best choice. Some lawyers have written extensively about the law. This is a useful indicator of expertise and standing in the legal community.
- Some lawyers list cases they have been involved in on their websites. Broad litigation experience in complex business matters over many years is a good indicator of competence.
- The Law Society of Upper Canada (Ontario, Canada) has a lawyers’ referral service. The service provides a name but you have to check the details out yourself. · The Law Society certifies specialists in several areas of practice. Certification as a specialist signals that the lawyer has achieved a higher standard of experience in his/her area but certification isn’t mandatory. Many competent lawyers have long experience in a field without applying for certification. You have to decide if this is important to you.
- · If your problem is outside Ontario, find a local lawyer first. Many firms have networks with lawyers globally and are able to refer to lawyers in the USA or other countries. Refers between colleagues are often more effective.
When you call, don’t expect the lawyer to solve your business problem over the telephone. The first discussion is for the lawyer to identify whether s/he can represent you and for you to assess whether the lawyer appears to have the skills to deal with your problem. If you have a legal problem the lawyer believes his/her firm can resolve, an office meeting will be arranged.
In business matters, lawyers customarily charge a consultation fee for the first office meeting. At the meeting, the lawyer will give preliminary or urgent advice and develop a go-forward strategy. The lawyer may be able to give a partial fee estimate and will ask for a retainer to cover some of the work. No lawyer can guarantee the outcome. At this early stage, there are usually a lot of unknown matters. While the lawyer may be able to give you a partial fee estimate in a litigation matter, it’s impossible to say with accuracy how much it will cost. It depends on too many unknown factors. Steuerberater