Hundreds of decisions, some major and some minor, must be made when operating a firm. However, even minor mistakes can turn into serious (and costly) issues when it comes to legal difficulties. All too frequently, entrepreneurs decide to forego legal advice in an attempt to cut costs or expedite the process. Ironically, the long-term costs of that decision may be much higher.
A few examples of how ignoring legal advice can become an expensive mistake are as follows:
1. Making use of online templates or generic contracts
Though it may seem like a quick fix, that free contract you saw online is rarely customized to your business model, state regulations, or sector. A badly written contract may expose you to disagreements, late payments, or unintended liabilities.
2. Misclassifying Employees
It may be less expensive to hire independent contractors—until the IRS or your state labor board determines that those workers ought to have been considered employees. Back wages, fines, and tax repercussions may result from misclassification.
3. Neglecting Protections for Intellectual Property
Whether it’s a proprietary technique, brand name, or logo, not protecting your intellectual property can lead to infringement and reduce your competitive advantage. Even worse, if you haven’t done your legal research, you can unintentionally violate someone else’s intellectual property.
4. Forming Alliances Without Contracts
A handshake agreement might seem ideal at the time, but when conflicts occur—which they frequently do—the lack of explicit, written rules can result in conflict that could endanger the company.
5. Neglecting Regulatory Warning Signs
Compliance is a must for everything from data privacy to industry-specific licensing. Even inadvertent disregard for regulations can result in audits, penalties, and harm to one’s reputation.
Investing in early legal advice frequently results in future time, money, and stress savings. Before issues emerge, we at Ryu Law Firm assist business owners in making wise legal decisions. We’re here to help you get off to a strong start, whether that means hiring a team, signing a contract, or starting a new business.