In today’s day and age, it seems like there’s nothing easier than suing any business that’s committed even the mildest of gaffes. Business owners everywhere are brushing up on their legalese and rushing to retain lawyers, as few seem to know how to protect their businesses from a legal fallout that could cost them precious dollars and their public reputation.

The truth, however, is that you don’t need an army of lawyers on retainer, nor a law degree yourself, to avoid common business mistakes that frequently result in lawsuits. Taking some basic steps to ensure that your business is on legally sound ground is a must for any small business owner or corporate CEO alike. So how should you go about protecting your business?

Be proactive, not reactive

The biggest mistake countless business owners make it when it comes to protecting themselves from legal vulnerabilities is being reactive instead of proactive. When you and your business are responding to legal threats rather than preempting them, you know you’ve gone wrong somewhere.

That’s why it’s vitally important to brush up on commonly-made mistakes ahead of time, and plan so that you know what to do before tragedy strikes, so that you’re not caught off guard when things inevitably head towards a courtroom.

In the US, it’s not uncommon for even small businesses to regularly face the threat of legal jeopardy. Small and medium sized businesses have a 12% chance to struggle with an employment claim alone, for instance, and your competitors and customers with grievances will also be on the lookout to hit you where it hurts in front of a judge. It’s imperative that you invest in your customer service operations, then, and instill a friendly culture in your workforce to help them deal with angry customers.

Going over common tips will go a long way towards ensuring your business doesn’t make a simple mistake that will cost it for years to come. Taking the extra time to go over all of your employee contracts for glaring errors, for instance, or ensuring that all of your branding and intellectual property concerns are all up to date, are all ways a small business owner can spend their time making sure they’re legally secure.

You should ensure your management practices are up to snuff, too, if you want to avoid trading legal blows with your former employees. Wrongful discrimination and wrongful termination lawsuits are some of the most commonly wielded legal tools used to gain legal retribution from a business, and you should ensure that your hiring and firing practices are airtight ahead of time, so as not to get yourself sued.

Making sure the small, day-to-day responsibilities of management are taken care of, like avoiding wage law mishaps, will also go a long way in avoiding needless legal hazards.

Know what to do when disaster strikes

It’s all but impossible to avoid some form of legal combat in today’s economy; if your business exists for a few years, let alone a few decades, you’ll inevitably run into some type of legal scrap that needs to be dealt with. Arming yourself with the necessary know-how needed to survive in a courtroom and in side-negotiations will thus be critical towards your success as a businessperson.

Small business owners should thus recognize that they’re not alone. A plethora of tools from trusted sources and small business administrations exist to help you know what you’re getting into, so you can understand the impact litigation will have on your business ahead of time.

Don’t be afraid to check around in your personal network to see what common problems your friends and peers in the industry are facing, too, if you want to know what kind of legal missteps people in your local area are dealing with. Many law firms have action plans in place for clients should the worse happen. Putting your trust in a private firm can be a great failsafe method to mitigate risk

Never forget the importance of staying totally up to date on all your paperwork, and consider having a full-time position to deal with issues of regulatory compliance and employee’s legal issues.  A legal fallout is the last thing your business needs in an increasingly crowded marketplace, and you’ll find that small steps taken ahead of time prove infinitely more helpful than big ones taken after-the-fact.

A legal obstacle in your business’ path doesn’t have to be the end of the road; keep your nose clean, bring on the right workers to help you when needed, and avoid simple mistakes, and you’ll steer your business well clear of any legal disasters for years to come.

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Matthew Davies
Matthew Davies is a creative and passionate HR Director with 15 plus years proven experience up to board level in international and world-class corporations. He has had the privilege of working on a wide range of projects that have enabled him to apply his leadership and technical skills and he have proven expertise in managing change, business integration and outsourcing.

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