SME’s advised to have good legal protection in place

Clive Rich, from the legal online consultancy firm LawBite, has explained why small business owners should opt for efficient legal protection. Owners of small businesses put in a lot of effort to make their business successful and this is especially true for small businesses that have modest beginnings as well as for long-standing family establishments.

They all have an enthusiastic staff, burn the mid-night candle, have efficient accounting and as successful business plan. What they do not have is a good lawyer. It rarely crosses the minds of these entrepreneurs to have a sound legal firm acting on their behalf. Most of them do not even consider employing a lawyer because of the costs involved and the extensive paperwork that contracts need. Actually, if one keeps avoiding the issue, the legal aspects build up and gain momentum. When we realize we need legal advice it is often too late.

Services of a legal consultancy firm are as important as having an accountant and a bank account in any business. This is one of the first primary services required. One needs to strike the balance in this essential holy trinity and choose between expensive premier quality outlays and affordability. This is the hard part. According to a survey conducted by the Legal Services Board among 9,000 small business enterprises, SME owners did not feel the need for legal services.

It was only one person in eight who saw the way lawyers provided cost-effective solutions. All the others felt discouraged by what they termed as exorbitant charges. In all, SME owners dread the hourly rate approach of lawyers; they were hesitant to approach them.

This leaves their businesses open to the risk of litigation. Any profit, exit values or margins that are not contractually bound might land the business in legal battles. In all trading relationships, it is best to have legal advice so that one has protection at all times.