NOTE: This blog post includes a discussion and exploration of legal issues. The content is intended for educational purposes only, and is not intended to be legal advice. You should always consult with a licensed attorney about actions that could impair your legal rights.
Want to save money on your legal fees? One way to do that is to be prepared when you sit down with your attorney. Especially in the beginning, it can be extremely helpful for your attorney to know all of the “touch points” that you and your enterprise have. Why? Because each of those points of contacts is a relationship, and relationships can always have legal consequences — good and bad.
Who is a touch point for you? Some people are more obvious; some people are less obvious; and some may be somewhere in between. One of the more obvious examples is your customers, but you also want to be thinking about your business partners. And these groups can be broken down into smaller groups.
One way you might sub-classify your customers is by where they fit on the relationship timeline: have you made a sale or signed a deal, or are you still developing that relationship? Are these repeat customers, or first-time customers? Another way to sub-classify your customer base is to understand if you are selling to natural persons or other businesses. Are you extending credit in order to consummate the deal? If you are extending credit to a business, does the business (not the individual signing for the business) actually have sufficient assets to make you whole in case it defaults on the agreement?
When it comes to your business partners: how frequently are you interacting with them? Are they natural persons or companies? Do they have shareholders or are they closely‑held companies? Do you have written agreements with them? Does your landlord have to consult with its tenants before selling the property? How much notice does your landlord have to provide? Who are the employees of your logistics company? What sort of due diligence do your business partners undertake when hiring a new employee? Who are your employees?
And you still want to anticipate other relationships that may develop without you even thinking about them. Do you have a brick‑and‑mortar store? If you do, it would be prudent to at least be aware of what sort of responsibility you owe to the people that visit your store (whether they purchase anything or not), and what sort of liability you have if something happens to one of those people because you did not fulfill that responsibility. What is the exterior of your store or office like? Are there sidewalks that you are obligated to keep clear of ice in the winter — you may owe a duty to passersby of your store. If you distribute a newsletter with coupons and discounts, what sort of privacy obligations do you have to protect the contact information of those subscribers?
While many of these questions raise concerns, “concern” is meant more in the vein of “to be aware of” rather than “to be afraid of.” Each is intended to create a reason to think about the expectations you have of others, and that others will have of you and your business. Such reflection is important because a failure to be aware of your circumstances does not negate consequences, it only weakens your ability to respond and control the outcome that results. A lawyer can help identify relationships and responsibilities for a new business. We enable you to make a more informed decision about how to proceed with your business — based on your own balancing of positives and negatives.