Don't Let Ignorance of the Law Get Your Business into Trouble

The way and methods that owners of small to mid-sized businesses (SMB) are conducting daily operations is constantly changing. This is caused by many factors including having different vendors, outsourcing various components in what the company manufactures, changes in equipment, or even having remote workers managing aspects of the business. Businesses must be constantly evolving to continue to be competitive and profitable.

How does a business owner know what changes have occurred in the legal end of their operations?

Here are some common ways they learn about issues that may affect them:

• The business owner went to a business conference for their industry, and they heard a presentation on legal issues.
• The business owner played a round of golf or attended a similar outing with people in their industry, and some of the business owners shared what trouble their company was in because of something of which they were unaware.
• Of course, the worst way to learn is to find out about it the hard way: The business owner's company does something in the ordinary course of business that causes a legal problem because the owner and team were unaware of the law itself or changes in the law and how it would impact the business.

What is a better way?

We see many articles talking about preventative medicine in the context of our physical health, but little is written about taking a proactive approach to making sure a business stays healthy by being compliant with both existing and new laws that may impact them. Why isn't this talked about more? Perhaps business owners don't think to ask for help with these issues from a proactive approach as lawyers may only be seen as needed for a crisis, or they don't want to pay attorneys for preventative medicine for their business because they don't think they need it, or it might be that law firms (especially the large ones) don't talk about it a lot because they make more money from putting out “fires” rather than preventing them.

When the SMB (or SME) is large enough to have an in-house general counsel (attorney), or a whole legal platform, preventative measures should be part of their job. What if your business is not able to support a full-time in-house attorney? There is an often-overlooked option that is cost effective and growth focused. Once utilized, business owners wonder why they didn't turn to this method sooner.

The better option is to hire an outsourced general counsel. This attorney provides legal services for an agreed upon monthly fee, so they learn your business and become an extension of your team without the overhead cost of being an employee. Using a lawyer with practical business experience to know how the laws impact your type of business because they have represented business like yours, or they have worked on the business side or your type of business, is a smart move. They know what your needs are and can do a risk assessment of things that need to be changed, training that needs to be had to avoid legal issues, and how the new laws will impact the conduct of your SMB. This outsourced general counsel will be an integral part of your management team, to know your company's history, the systems, and processes of how the business is conducted, know your team, and deal with issues on the business side before they become major legal issues. This will allow the business to concentrate on growth, rather than the “speedbumps” of legal problems that take the business owner's focus away from growth. It really does make a significant difference for the company's bottom line and overall success.

There are many benefits to this scenario including the business owner having a great fit for the company and a resource to help plan business strategies, and since the outsourced general counsel is not a full-time position, the investment that the company makes in this position will be affordable to the growth of the business. As your company grows, and your company needs more of the talents and skills of the outsourced general counsel, you can add on what your needs are at that time. Their services grow with you. In the meantime, your business will be legally compliant and have less in the way of legal surprises. Who doesn't like being prepared, saving money, and avoided headaches? No one who wants to be as successful as possible!

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Denice Gierach

Gierach Law Firm

Denice Gierach is an attorney, CPA, Northwestern University business master's graduate, and has owned several businesses from real estate to manufacturing. She is the lead attorney at Gierach Law Firm in the Chicago area. With more than 30 years of experience, she has been a respected and sought-after resource for businesses looking to grow, sell, solve problems, and succeed long term. Her insights across business areas gives a fuller lens to business issues and solutions, and helps businesses grow and succeed with less time spent on legal issues and other time-consuming problems.

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