Many smaller and mid-sized businesses may take the approach that they will call their lawyers when they get sued or threatened with a lawsuit.
They may also call when they realize they may have to take legal action in order to protect their business’s critical interests.
It is understandable why a business may take this approach or even just fall into it unwittingly. It does cost money to seek out legal advice and assistance, and it can be one more time-consuming task on the plate of an already over-extended management team.
However, there are many good reasons why a business should consider regularly communicating with its corporate counsel, even if the business is not large enough to justify a full-time in-house attorney.
Being careful about employment matters may prevent legal claims
One of the most common legal risks to a business are suits and regulatory complaints at the hands of disgruntled former employees or employees
In order to prevent discrimination or retaliation claims, it is important for a business to review any significant employment decision, a termination for example, to be sure the decision will hold up in the eyes of the law.
Likewise, businesses of just about any size should have clear and consistent employment policies and procedures in place. When done correctly and in accord with the law, such procedures are an effective way of avoiding employment litigation, whether that litigation alleges discrimination, failure to pay wages or some other claim.
On a related point, if a company wishes to offer an employee any type of contract, including a severance package or a non-competition agreement, the company should first have that contract reviewed by legal counsel.
Taking care of other legal matters regularly may prevent other costly issues
Employment issues are not the only area in which business can prevent litigation by doing proactive legal work. Any significant business decision may have unthought of legal consequences to it.
Moreover, as businesses grow and mature, they may encounter various ongoing legal risks both from private parties and government authorities.