“Prevention is better than cure,” they said.
No one fancies going to the doctor – that’s why we take vitamins. That’s why we go for health check-ups. For the same reason we purchase insurance coverage: For a peace of mind that things will be right even if they go wrong.
Yet when it comes to legal, many businesses are slow to adopt the preventative approach.
Think: Why do companies hire attorneys? Nine times out of ten it’s to do everything required to make a problem go away: Your customer is not paying; you call a lawyer. Your business partners want to take the business in a different direction; you need a lawyer.
But this mindset of engaging a lawyer only when a problem surfaces is wrong.
What if you could prevent these problems by installing certain procedures and having in place agreements that would make sure everyone is aware of their rights and obligations from the outset – wouldn’t this avoid disputes and help to manage your business more effectively?
Here’s the thing:
|It takes legal expertise to meet your legal needs.
However, not ALL legal needs require hiring a lawyer. Tweet this
Before seeking out a law firm, there are definitely some precautions you can take to minimise the occurrence and impact of legal disputes:
1) Always own any work that is produced for you.
As your business continues to grow, you will inevitably employ more manpower for your team, or outsource some work to a freelancer. This is often where business overlook the additional step of transferring Intellectual Property (IP) ownership.
In the case of Singapore, fortunately, any IP created in the course of employment or under the terms of employment belongs to you (the employer) unless there was an agreement which states otherwise (Source: IPOS).
However, if you are hiring a freelancer:
|The creator of any piece of work is made its owner under copyright law. The same applies for work done by freelancers that you engage, unless you take the additional step of transferring IP ownership to you or your company.|
In other words, if you use or publish work without first receiving copyright and IP ownership, you are stealing! If the freelancer decides to claim wilful infringement and sue for damages, you may be liable to fork out more in legal fees on top of what you’ve paid for the work.
2) Put everything in writing.
This is an obvious one that many businesses continue to overlook. Many entrepreneurs put documentation on the back burner so they can “focus on the business”. But you may find yourself in a sticky situation should problems arise in the meantime.
“But that’s my good mate!” you say.
Things often don’t go according to plan in business, and you can never count on a handshake deal. No matter how much you trust your business partners, you need a written agreement to fall back on in times of dispute. Disputes also often arise from allegations of what was discussed verbally, but not established in writing.
Think about it this way: Sit down with your friend/family/business partner, get your legal documentation in place, and you will never have to put your relationship the test!
|Lawyers are not pessimists; they just plan ahead to give you a way out in the worst-possible scenario.|
3) Don’t use templates.
As a provider of self-service legal solutions online, we can’t stress this enough. Templates will not address specific legal needs in your specific legal situation. Templates are not localised for your specific jurisdiction. Templates may address all or none of the legal issues your business really faces – and both are not ideal.
When you go to a law firm and ask for a document to be drafted – whether a Service Agreement, Consultancy Agreement, or Confidentiality Agreement (NDA) – the lawyer will first clarify if you are the provider or recipient. The provider is the party who supplies any good(s), service(s), information or makes the promise; while the recipient, as the name suggests, is on the receiving end. This is important because it affects the form in which the contract will take, and who it favours. Templates fail to distinguish this.
Yes, put blindly, legal agreements are merely pieces of paper. But it is what aligns ownership and responsibility from the outset, and helps to prevent disputes in the long run. They should be finalised before there is any chance of a damaging disagreement.
It is not common practice for small businesses to set aside budgets for litigation. If you eventually have no choice but to turn to a lawyer, you will very likely be put off by the traditional model of hourly or retainer fees. How many times have you made the choice to forgo a lawsuit and absorb the loss as a “cost of doing business” or “bad debt”?
So how about get your legal documents in order to prevent that from happening in the first place? By the time you have to look for a lawyer, it’s probably already too late.
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