Why legal counsel is a critical part of a small business growth
Well established companies like Coca Cola, American Airlines, Microsoft, and numerous other Fortune 500 companies consider their legal counsel or legal departments to be a critical part of their company’s growth, operations and long-term viability.
There are generally no qualms about all the legal concerns and issues that companies with 50 or more employees have to address. Yet, small or mid-sized businesses all too often fail to recognize just how many legal concerns, questions or issues arise during the course of any given business day.
Failing to involve legal counsel in decisions that have legal implications can cost a business owner a significant amount of time and money. Would it surprise you to know that Hispanic companies all too often think of legal concerns as an afterthought – even when they are operating with a multi-million dollar budget?
Too often I’ve witnessed the fallout from Hispanic business owners who learned too late that they are not immune from what impacts all businesses whether small or large, majority or minority-owned, big profit margins or thin ones. The notion that they can navigate the “collateral” legal issue and avoid the legal implications to save on legal expenses generally comes back to haunt them.
In September of 2014, Fox News Latino reported that since 2007, Hispanic owned businesses across the United States were growing more than twice the national average. Moreover, “The Hispanics in Business” 2014 study by Geoscape predicted that Hispanic owned businesses would grow to 3.22 million by the end of 2014 and exceed $486 billion in annual revenue.
The number of Hispanic businesses increased 43 percent since 2007 while the rate of all U.S. businesses increased only 18 percent during the same period. Revenue that year was $358 billion.
While Hispanic business owners increase in number daily, the challenge is making sure these businesses have long-term viability and growth. Keys to that certainly include training and understanding financial management, human resources, strategic decision-making, and operations management.
But more importantly, Hispanic business owners need to make sure that the legal underpinnings to your business are in place with routine legal counsel oversight and input on the countless business decisions that are made daily.
Countless business decisions, even those that seem routine, can have significant legal implications.
Some of the key areas for legal concern include:
- Real estate environment in which a company operates (e.g., ownership, leasing, multi-tenant issues)
- Employees (e.g., hiring, terminations, payment of wages, company benefits)
- Contract arrangements (e.g., customary contract forms used by the company, negotiating contracts with outside vendors, breach of contract situations)
- Selling of products or services (e.g., compliance regulations, methods of delivery, purchase agreements)
- Owner and management decision-making that should include legal review and input. Business owners need to concern themselves with protecting their companies from unnecessary exposure to numerous areas of liability.
If that doesn’t make it obvious, maybe the better approach is to consider how a Hispanic business would benefit from recognizing that legal services are a “cost of doing business” and accordingly, should be a line item in your budget.
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