The statistics on litigation are just nightmarish. According to evidence uncovered by Forbes magazine, between 36 and 53 percent of small businesses get embroiled in some form of litigation or another during the course of a typical financial year. 90 percent of companies are involved in some kind of legal procedures at any given time.
For this reason, entrepreneurs need to take some serious time out to consider the legal risks and implications of their activities. At some point, the odds are overwhelming that you’ll have to engage with the legal system, defend against being sued, and try to win the case.
Here are some practical steps you can take to defend yourself when a dispute arises.
Here’s some advice for people going into business: get insurance. Every time you transact with anybody, be that your customers, your employees or your stakeholders, your company are at risk of litigation. The threat of a malpractice lawsuit is ever-present.
It’s also worth getting other forms of insurance too, especially if your business relies on a small group of essential people. What if one of those people were suddenly to get sick? Could your business survive? Key man insurance is designed to pay out if somebody who is essential to your team can no longer work at your firm.
Protect Intellectual Property
Intellectual property lawyers usually charge a flat fee to come and audit your company and identify your key intellectual property. They’ll also provide advice on how to protect it, especially if you plan on selling overseas.
Businesses also need to step up their game when it comes to trademark protection, given the rise in trademark trolls who register trademarks, just to prevent legitimate businesses from using them. Find out how to trademark and use all legal methods available to your to shield your company from copycat behaviour.
Get Formal Agreements With EVERYONE
Disputes between investors, owners and suppliers are a common occurrence. They shouldn’t be.Usually, disputes arise because of the fact that various parties aren’t reading off the same hymn sheet. They each have a different idea of the level of service that they should be offering or their particular commitment to an enterprise.
Signed contracts are proven to reduce the amount of litigation and also reduce the cost of legal proceedings. If you’re not sure your agreements are sound, get a lawyer to look over them to see if there are any issues. Lawyers understand your rights and obligations and may be able to offer additional advice on how to better protect yourself in your particular industry.
Protect Yourself Against Workers
Anybody, whether an official employee or a contractor, who works for your company should have a contract. Don’t just rip a template contract off the internet and hope that this will suffice: instead, create one that actually suits your business and is unique to you.
Also, make sure that all disciplinary procedures are in writing in your employee handbooks. Ensure that behaviour and policies are transparent, including policies on things like BYOD and social media usage as these are common sources of conflict in the modern workplace.