When a legal crisis strikes your business – how do you feel? What do you do?
Maybe you have worked hard and until now, successfully managed to avoid expensive legal bills? But now… something has gone very wrong and you cannot avoid making that grudge purchase!
The reality is, legal risk is one of the most prudent risks facing businesses today!
- What is meant by legal prevention?
Formally this is often referred to as legal risk aversion or mitigation.
In essence, this entails always being one step ahead from a legal perspective. Ensuring that you are always aware of legal developments that may impact you and your business.
The problem is many business owners do not appreciate the value of legal prevention. Many put their heads in the sand, like ostriches do… Why?
- So, why do business owners choose to do the ostrich head in the sand move?
We can only deduce that this is as a result of ignorance, alternatively a misconception regarding the actual cost of hiring a professional provider. In addition, underestimating the gravity of the need particularly as the business grows.
So, if businesses are not dealing with this by engaging a professional – does this mean that many businesses attend to their own legal matters? So, startups and SME’s do not only aggressively focus on their businesses, which they should do, but also keep abreast of all the changing regulations that may affect them. This in a time when there is so much to do conceptually. Really?
Or worse, they do nothing, because they simply do not see legal risk as any risk whatsoever…
Why be “penny wise and pound foolish”, as they say?
This way of thought, is in my opinion, only a cost saving on the surface. If we are truly considering savings – what about the cost resulting when something was missed and what about a negative outcome from an oversight? Or the cost saving of avoiding an avoidable risk?
- So, why is legal prevention so important?
In my experience as a legal professional most disputes can be avoided by ensuring legal compliance and further adapting your processes to the ever changing demands of the regulatory landscape. Few people realise the gravity of the destruction of an avoidable dispute until they receive the related legal bill and end up spending more hours attending to the dispute than on building their business.
In truth not all disputes can be avoided by planning and advice, but the majority can.