Are your current lawyers actually holding back your business?

Properly-worded contracts and policies protect your business. By laying down what you expect from customers, suppliers, and employees, they help to shield your business from risk. Your business knows its own contractual obligations, and is clear what it requires from others.

Equally clear is the role played by lawyers in all this. In simple terms, their role is to envisage the risks to which your business might be exposed, and to then offset as many of them as possible by placing appropriate contractual obligations on others.

So far, so simple. But consider for a moment how an unthinking lawyer, unused to the practicalities of business, might approach the task.

Their usual logic—as we’ve seen many times—is to add more and more stipulations and clauses, every time that they think of another risk.

Unintended consequences

You might imagine that there’s no downside to this. But you’d be wrong.

The danger of such ‘over-lawyering’ or ‘gold plating’ is that it can actually work against the best interests of your business.

Compliance requirements, for instance, that are so out-of-line with the day-to-day realities of your business that employees just shrug and ignore the whole document. A real-life example: a small UK-based business, with no export activity at all, that nevertheless sought to prohibit employees from bribing the officials of foreign governments.

Supplier contracts that are stuffed with provisions so onerous that suppliers are deterred from dealing with you. Customer contracts that deter customers from buying, and salespeople from selling. Standard terms and conditions that bear no relation to how business is carried out in the modern world.

And policies so based on standard generic documents that they legislate for totally inappropriate risks, while ignoring far more relevant dangers.

Not fit for purpose

Gold-plating disengages and demotivates staff, and impedes relationships with customers and suppliers. Gold-plating frustrates those employees charged with managing relationships with customers and suppliers, and alienates employees by imposing unnecessary restrictions upon them.

Effective contracts and policies do not ‘gold-plate’. They are clear, with ‘necessary actions’ and ‘desired activities’ abundantly spelt out; they are relevant, including only examples that match the business; and they are engaging and inclusive, rather than alienating.

Our advice: working on your contractual and compliance processes, and including only relevant and necessary ‘small print’, and which is easily understood and followed, will serve your business better. And when backed up by regular reminders, reviews, advice and training, protects your business far more effectively than any amount of gold-plating.

Where to start?

If the dangers of gold-plating strike a chord with you, we can help.

We’re lawyers, but we’re also business people, used to dealing with the practicalities of business, and accustomed to working inside businesses, as trusted business advisers, and being ‘one of the team’.

Either on a project basis, or on a fixed-fee retainer, we agree a scope of work and a fixed price with our clients. There are no hidden surprises, and clients know in advance what the cost will be.

And our name provides a strong clue as to the nature of the relationship that we aim to build with you. Quite simply, we strive to become part of the management team—an on-site, on-tap legal director, working with you for as many days a year as you require.

To find out more, pick up the phone, or email info@thelegaldirector.co.uk

Posted Thursday, July 25th, 2019 by Warren Ryland

 

 


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