Why small businesses need lawyers more than big businesses

Isn’t life just full of ironies …. it’s a fact that a very significant proportion of small businesses don’t regularly use solicitors, generally due to the cost and an approach based on perceiving other priorities as more important. But it’s also correct that the smallest businesses probably benefit more from having the right contracts and

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Isn’t life just full of ironies …. it’s a fact that a very significant proportion of small businesses don’t regularly use solicitors, generally due to the cost and an approach based on perceiving other priorities as more important.

But it’s also correct that the smallest businesses probably benefit more from having the right contracts and advice than the biggest. Why is this ?

Fundamentally, it’s because, having a  contract is ultimately just a piece of paper – it’s the underlying position and leverage behind any legal document that matters most.

Business risks – confidentiality and IP

By way of case study to support my point, consider this quite incredible scenario. One of the biggest and most powerful companies in the world today is google. It relies significantly, for it’s success, on its search algorithm. Like coca cola, the mystique and secrecy about the precise formula it uses is a major part of what keeps that company ahead of the game. Competitors, let alone millions of online businesses, would love to know how that algorithm works.

We know it’s incredibly complex and ever changing, but the fact is, to my knowledge, there has, to date, not been any known leak about the algorithm from a  former employee of google.  Given the size of the business, the number of people that must be at least partly privy to the information, the fact that every business of size, however good an employer, will have a proportion of disgruntled former employees, this is a stark fact.

I am sure that google has very comprehensive employment contracts and policies and that, in all probability, all staff must agree to very tightly drafted confidentiality clauses. Nothing unusual there.

The point is that a disgruntled or aggrieved employee would certainly think twice before disclosing information, simply because anyone in their right mind would be very worried about being pursued by the company. It has the resources and the attitude to go after anyone that breaches it’s legal rights. In short, notwithstanding it almost certainly has the right legal paperwork, the real protection comes from it’s size and resources, something which a small business doesn’t have.

Small businesses – what to do ?

Turning the above scenario around, as a small business, if you don’t have the right legal contracts, documents or advice, you are amplifying the signal you give to someone who may take advantage of your business, whether an employee, supplier or customer. You are almost saying, we neither have the right attitude towards protecting ourselves, nor do we have the right resources.

If, as a small business, a 3rd party or employee can see that you have a robust approach to protecting your interests and prioritise this, visibly and demonstrably having well drafted contracts or documents and being prepared to use lawyers where necessary, you stand a better chance that anyone who might otherwise try to take advantage of you may think twice, even if they are not intimidated by your apparent size or resources.

Without the right legal advice in place for your small business, you neither have the inherent protection that comes with size or the legal and perception protection that comes from getting good legal advice. In that scenario, don’t be surprised if you face problems.

commercial law

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