Our previous Business Health Series posts have discussed the needs and benefits of incorporating legal infrastructure across your business as both a preventative and proactive strategic advantage for growth. Now, let’s look at how to implement it.
General Counsel gives mega corps a competitive edge
Large companies have the resources to employ a General Counsel who knows the business inside and out and assists the company’s leadership in strategic planning and risk mitigation. The General Counsel or “Chief Legal Officer” is paid a salary to support strategic decisions and handle governance, ownership, contracts, employment, facilities, real estate, IP, data privacy, and anything else that comes up. They are the skilled resource to review and negotiate documents, research laws, and inform the leadership team of opportunities and potential pitfalls of actions in light of their risk tolerance and corporate goals.
How can smaller companies and entrepreneurs level the playing field?
Smaller companies, however, don’t have the luxury of employing a full-time General Counsel to address these needs. As a result, legal is an expensive and complicated part of the business. Often, the company doesn’t have a relationship with their counsel and has to re-educate them each time they engage. The response times are too slow and it’s crazy expensive. The business always asks itself, “Is it worth it to call the lawyer for this – or can we figure it out ourselves?”
Legal has become an expense that should be minimized and used for only the most significant of situations – and the “significant situation” is determined by the entrepreneur. How does one determine what constitutes a “significant situation”? Typically, it’s one that is unusual or outside of the ordinary course of business – often what is obviously a “big deal” such as a lawsuit, merger or acquisition, or expanding into a new line of business.
But if we go back to the 80/20 rule, the 80% of business is the day-to-day, not the unusual. Ensuring everyday activities are legally sound is just as important (perhaps more important) as those extraordinary scenarios. Every day is often where both the biggest risks and greatest opportunities exist.
Legal infrastructure serves to protect the assets of the business and the business owners by proactively understanding and addressing risk with the business’ needs and risk tolerance in mind. It asks, “What is the risk? Are there tools that can mitigate the risk? Am I willing to accept the remaining amount risk?”
If you address the day-to-day risk where 80% of the business occurs, you can avoid the significant situations that arise from unknown risks.
Going blindly into the unknown can be costly
Let’s look at an example: You hired a lawyer to draft your employee handbook three years ago. It’s done. Each employee signs an acknowledgment that they have read and understands it. There’s no reason for you to know that 5 new laws have passed requiring you to update your handbook. You now have a significant situation that you don’t even know about. If you have a General Counsel, they’ll proactively lead the implementation of these changes in the business. They’ll ensure the legal infrastructure of contracts, policies, insurance, and entity will be in place to protect the business. If you don’t have a General Counsel, who’s notifying you of these changes and ensuring the legal infrastructure is in place to protect you and your business?
That’s just one example – think about other key areas where you’ve taken a “fix it and forget it” approach in your business or those areas where you know you probably should have had a legal review but it didn’t feel worth the expense and complication.
The business’ perspective is that involving legal makes the process slower, more complicated, and more expensive. In many cases, they kill the deal entirely.
Our perspective and approach are different. Your small company has similar needs to the mega corps and has a similar need for a General Counsel or Chief Legal Officer to connect the dots across the different parts of your business while providing continuity in your strategy and operations. You just don’t need one full-time.
How to affordably add Strategic Legal Counsel to your team
Just as you may tap into a managed services provider (MSP) for HR, accounting or IT to expand your capabilities without adding to your headcount, you can also tap into the power of law with Equinox.
Our fixed monthly cost, managed services (MSP) approach removes the barriers of costs, response time, and complexity so that every business can have the same strategic law advantages as the mega corps.
Unlike the mega attorneys, we bring a balance of strategic business and legal guidance. You set the priorities and the budget. Our team builds a personalized plan at a fixed monthly cost to best serve your legal priorities and needs.
Do you have confidence that your business is current with the ever-changing government regulations and laws?
Learn what you need to reach and maintain a healthy business fit for today’s uncertain and always-changing environment.
Part of our Business Health Assessment, this ten-part series will help you leverage the full power of law for a competitive advantage across your business in areas like corporate strategy and governance, human resources, contracts, data privacy, and physical and intellectual property.
We start with the key elements of Legal Infrastructure: Contracts, Insurance, and Entity:
1 – What is Legal Infrastructure?
Create a Strong Foundation For Your Business Planning
2 – Contracts: The First Line of Defense
How Your Contracts Are Losing You Money
3 – Insurance: The Second Line of Defense
Do you have the right legal infrastructure and insurance in place to protect your business from ‘Mayhem’?
4 – Entity Structure: The Last Line of Defense
Is your business’ “corporate veil” vulnerable?
We then lean into how to apply these Legal Infrastructure tools across different parts of your business:
5 – Owner Relationships
Must-have tools for mitigating risk for any business with multiple owners
And finally, we share how to implement Legal Infrastructure for a competitive advantage.
10 – How To Implement Legal Structure
Now after we have discussed the needs and benefits of incorporating legal infrastructure across your business as both a preventative and proactive strategic advantage for growth, it’s time to implement it.
Not sure where to start?
Schedule a complimentary, no-obligation evaluation to identify needs and uncover gaps in your business processes and compliance. It’s a quick way to determine where your business stands, and if Equinox is the right fit for you.