The Risk of Managing Risk
We all want to manage risk in our international business and often the best way to do this is to put legal agreements in place – but for many the ‘lottery’ of engaging a legal professional is a risk in itself...
For many businesses operators that I meet the concept of using the services of a lawyer is uncomfortable – there is a paradox to this relationship, on the one hand they can put your mind at rest and protect the business, on the other hand the very idea of “getting the lawyers involved” makes many feel that they are stepping into a high maintenance environment that they do not understand and over which they do not have total control.
If applied correctly legal services can add significant value to your business however, if the relationship is not controlled effectively they can become a considerable and unnecessary drain on time and financial resources. Even if you do not apply every legal solution as a minimum it is wise to understand requirements and risk whilst the business is still relatively small - you really do want to avoid situations where you have to “unravel” or fight something in the future when the stakes are higher – I have seen this happen a number of times, it is messy and can often cripple a business that may have been up to that point on a healthy growth trajectory.
Quite clearly the businesses that are most relaxed about engaging the legal profession and who get the most value from it are those who seek to understand their position and take control of the relationship. I have spoken to many lawyers about dealing with small businesses, and they say that their services often “cost too much” because the business came to them totally unprepared and with the wrong expectations – these are things that you can control.
With this in mind, here are a few tips:
- Find an advisor / lawyer that you can relate to – you want to develop a relationship with an advisor/lawyer who understands what you do (your responsibility is to articulate that clearly) and is pro active in providing options for you to think about. An advisor who relates to you will probably not be doing things parrot fashion “by the book” but will be able to help you to make informed decisions around your requirements based on true value. You are a business and it can be good to find an advisor who can give commercial reasoning strong commercial reasoning for their suggestions.
- Understand the advisor’s role – it is to advise, not to make decisions – their job is to deliver solutions based on your requirements – they may suggest options to do this, but they will not tell you that you have to do anything unless it is a statutory legal requirement for you to do so.
- Find an advisor who can “lay a stall out for you” – ideally you want to tell them what you are doing, and ask them what you should be considering – they should then be able to provide you with two lists – Must do (Statutory Requirements) and Nice To Do (Risk Mitigation) .
- Time is money when you are dealing with your advisors so Prepare for your self for each meeting to minimise time impact.
- Remember that more often than not Legal agreements are commercial arrangements that can be enforced – therefore much of the content of a legal agreement will be the commercial terms that you require – ensure that you prepare these accordingly and then ask your advisor / lawyer to build legal protection around them. This will save a lot of time and money as it is the commercial terms (and the toing and froing fine tuning them) that often take them the time.
- No Surprises - ask for a quote for each piece of work that the advisor / lawyer does and really understand what you are going to get for that.
If you are unsure as to how to approach some of these things, or want some further ideas about how to work effectively with your legal advisor then ExportSavvy can help stimulate your thinking.
In addition to a suite of mini learning modules called “Legal Considerations” There are a number of checklists that you may find useful,
Has anyone else got any tips about how to get the most from your relationship with your lawyer?