Legal Basics Every Business Should Know — Before They Actually Need Them

One difference between small and medium enterprises and their big-business counterparts is that the former do not usually have an in-house legal team. That’s perfectly normal - there’s often not room in the budget for a department that has a largely as-needed role - but it can leave businesses exposed when legal issues arise. And whether it’s a dispute with a client, a problem with IP, or just a simple contractual question, knowing the legal basics ahead of time can make a huge difference.

Legal issues, after all, don’t always announce themselves ahead of time. Sometimes, they show up quietly in a brief email, and then escalate fast. So it pays to be prepared.

Understand your contracts

Contracts are the keystone of any business relationship, but it is all too easy to sign them and file them away without a second thought. Every business should be clear on the terms they are agreeing to - including payment deadlines, break clauses and the consequences should either party breach the terms of the agreement.

Even if you’re using template contracts or informal agreements, having a second pair of eyes - ones in the head of a legal expert, ideally - run over any key contract can spare you recriminations further down the line.

Knowing when to preserve information

If your business does find itself in a dispute, investigation, or audit, you may be called upon to preserve all relevant information, from emails and documents to chat records and more. This may be requested in the form of a legal hold notice, which must not be breached. This is a formal instruction not to delete or modify specific data which may be needed for legal proceedings.

These are particularly important for organizations that use cloud platforms and digital comms tools, where data can be lost or overwritten. Automated tools can make the process smoother, allowing you to meet compliance requirements without having to manually track everything.

Protect your IP. You do have IP.

Even if you’re not a high-flying tech company or creative agency, it’s almost certain that you own intellectual property whether or not you realize it. It could be your brand name, a product design, the content on your website or even a specific method you use to deliver services.

Registering trademarks, setting up NDAs when appropriate, and avoiding even accidental infringement of the IP of other businesses are all important steps that often get overlooked until it is too late.

Have a go-to legal contact

You genuinely don’t need a legal department - but it is ideal to have a legal contact. They may be a lawyer you have worked with before on tax issues or property negotiations, a specialist you’ve researched online, or a local legal advice center with a positive reputation. They will have an understanding of loopholes and suspect clauses that goes beyond what someone unqualified will know. And being able to call on them when something goes wrong can enable you to avoid unnecessary escalations. 

If there are services you can offer them in return, so much the better - but having at least an informal relationship with a legal expert is advisable.

Legal readiness doesn’t need to be complex or expensive - it’s about having a framework in place that you can turn to when necessary, and knowing when to seek help. Being prepared before you need to be is always infinitely preferable to reacting in a hurry.

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