Every business should expect to incur some legal expense each year. Proper planning is necessary so that legal expense can be budgeted for and properly managed to avoid unpleasant surprises. In fact, it is the unexpected legal expense that usually most costly and potentially places an enterprise at risk. Rather than burying their heads in the sand, managers/owners of small and growing businesses must proactively work to mitigate legal expense by:
- Identifying the areas of legal risk that affect your company;
- Creating a strategy to proactively mitigate that risk; and
- Implement practices and procedures to stay ahead of legal risk.
Identify areas of legal risk
Different businesses face different legal risks depending on the nature of the business. For example, a business with employees faces different legal risks than one that does not. Similarly, a product manufacturer faces starkly different legal risks than an accounting firm. The following is a non-exhaustive list of legal “buckets” typically faced by small and growing companies:
- HR/Employment issues
- Tax issues
- ADA compliance
- Contracts
- Industry specific regulatory compliance
- Cybersecurity
- Tort liability
- Business entity related
- Investor related
- Risk transfer (insurance and other)
Creating a strategy
Each of the above categories requires a different strategy for appropriately managing legal risks faced by small/growing companies. A legal strategy should include regular re-assessment and tweaks for course correction.
Implementing practices and procedures
Once a business has identified the legal issues/risk it is likely to face given the nature of the company’s business, yearly revenue and size of workforce and develops a strategy for managing the same to avoid unexpected legal expense.
Frame Law, PLLC works with small and growing companies to identify areas of risk and create and implement risk management strategies, policies and procedures to avoid unexpected legal expense.