Distinct Legal Issues Businesses Face
Successful small business owners face many challenges, particularly in the first five- to- seven years. Investing in legal help from the outset is one way to avoid some of the growing pains associated with growing a business. An attorney can forecast general business issues you may face, address federal, state, and local legal requirements, and may even be able to provide specific guidance for your industry. In this way, an attorney can help address issues before they arise, saving you time, money, and frustration. And, should you require assistance with contracts, employee issues, debt collection, or lawsuits your attorney will prove to be a very valuable asset.
My focus today is on several of the most common facets of business operation that business owners must address: employees, intellectual property rights, customer satisfaction, and payment. Each of these areas can be fraught with complications if not addressed effectively.
One of the most challenging areas of running a small business has to do with employees. Employee issues often revolve around pay, performance, discipline, and termination. A non-performing or poorly performing employee may taint the work environment. How you deal with that employee tends to dictate the legal implications or results that arise. A termination can result in a wrongful termination lawsuit or an administrative hearing (both of these take time and cost money – even if the employer wins). If you are often must discipline or fire employees, you may have a selection problem, an onboarding problem, a culture-fit problem, or a training problem. Review your selection criteria and onboarding processes, and if you don’t have these, implement and follow them. Make sure that the mission of the company is clearly stated and understood, regularly noting what performance is expected from employees, including how you want customers or clients treated, as well as how you expect employees to treat each other. Effective training and culture indoctrination will help prevent major legal issues related to discrimination and or harassment. Finally, evaluate and reward employees early and often. Following these steps creates loyal, dedicated employees who represent the business well, and fosters a productive work environment. Conducting regular meetings with employees to address any issues creates an inclusive environment. That said, however, if someone performs poorly or consistently violates work culture norms, that employee should be counseled swiftly, and if there is no improvement in behavior, that person’s employment may need to be terminated.
Another issue that companies face centers on intellectual property. Infringement issues arise when one business takes an original idea, product, or process without recognizing (and paying for) the rights to use that idea, product or process. Protecting your intellectual property or being aware of when you are infringing on the intellectual property of another will prevent costly intellectual property claims. Trademarking your company name, your tag line, or unique product names (think Coca-Cola®) will save you time, money, and legal headaches in the future. Publishing and legally protecting your uniqueness through protective measures (such as copyright and trademarking) are the appropriate ways to avoid customers being confused by similar products, and to legally thwart those who would attempt to steal your client base or your product ideas. Your business attorney will research the necessity of copyrighting, trademarking, or even patenting your products to help you avoid legal battles or disputes between you and your competitors.
Another issue that has legal implications is the dis-satisfied customer. Customer dissatisfaction is problematic when the dissatisfaction results in a lawsuit or a negative online review. If you do not effectively address customer dissatisfaction, your company may be sued. And, in the age of social media, where everyone can voice his opinion of your business - regardless of the veracity of the statements, you may have to address libelous statements made about your company by a customer or client. Creating a culture that emphasizes the importance of treating the customer properly, and by providing outstanding service, you can protect your business reputation and avoid dis-satisfied customers.
The last issue that commonly affects businesses of all sizes is collecting payment. Late payments (or non-payments) can cripple your business. Depending on how and when payments are collected with your product or service, you may have to address delinquent payors. Having to pursue your clients for payment, whether by formally filing a collection lawsuit, or informally by making repeated collection calls and sending “Past Due” notices, your attorney will be able to provide you with sample terms and conditions for your contracts, as well as advice on the most cost-effective way to pursue payment. Remember: Money is necessary for the business to grow, and not being paid is a sure way to fail.
The surest way to avoid common legal issues for your business is to establish a relationship with an attorney before you need one. Regular business audits with your attorney can address a potential issue before it becomes a problem. And, when an issue arises, your attorney can help you tackle it quickly and effectively. It’s always best to seek counsel so feel free to Ask Atty Mo!