The Banking Bailout and BP Oil Spill – Lessons for SMEs and why a New Legal Service Model is Needed

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When something bad happens to a well known business, we’re all surprised. Recent examples are the bail out of the Royal Bank of Scotland and the oil spill disaster that seriously damaged BP’s brand and finances. You hear comments like: “How could they have got that so wrong? ”

So, what can a small business learn from this, and what steps can they take to avoid a similar fate?

Getting the right legal advice helps. Currently the legal model used by law firms puts access to legal advice out of the reach of many small businesses on a tight budget. This results in a focus on documents at the expense of ongoing support. Azrights Solicitors are introducing a new service to address this and provide SMEs with more relevant assistance.

Risks ignored in pursuit of profits

The common error these headline disasters highlight is that of not taking enough time to focus on understanding and managing risks. This is especially so for SMEs given the pressure to make enough money to justify their very existence.

However, a commitment to address risks and dealing with them properly would greatly improve the prospects for any business.

The right and wrong way to manage risks

Though start ups may be aware of the need to manage risks, they may not realize the best way to do this.

Many business people want to avoid unpleasant consequences, and fear entering into unfavorable contracts or being sued. So on starting up in business they will often consult a lawyer and spend money on legal documentation prior to starting up. Some may simply purchase documents or write their own agreements, by copying those of their competitors.

Those that do put aside a budget tend to spend their money on various legal services, generally encompassing an array of legal documents being drawn up. What they may not realize is that these documents may well become rapidly outdated as the business evolves. Therefore, it would be more appropriate for them to reduce and manage their legal risks by having a fee plan with their lawyers providing ongoing help and access to resources for document production and learning about risks. An emphasis on the documents a start up needs is inappropriate because what the business starts out to do may not be what it ends up doing.

Businesses often take time to discover their core products and services, or the best market for these. They commonly start off offering a broad range of products or services, but as they understand the market better they become clearer about the demand for their goods or services.

Given that start ups change radically in the early years, and look nothing like their initial manifestation just a few years later early phase legal work should provide a solution which includes ongoing help to keep the business current in its legal compliance.

The need for solid foundations

Once businesses are up and running, the calls on time and finances soon mount and they may be unwilling or unable to devote a lump sum for legal fees. They may not even realize they need to spend further on legal risk management, especially if they have spent a lot already on legal documents.

But legal and other needs change with the business. Neglecting fundamental legal, insurance, financial or tax issues means the owners are going to be stressed, wondering when something bad is going to happen or whether the business will make it for the long haul.

How lawyers can help in building the right business structure

To help in this, lawyers need to be trusted business advisers rather than providers of documents. By offering the SME the necessary guidance to manage their legal requirements and documentation lawyers add real value. Even if the business owner is on a budget and cannot afford lawyers to do everything for them, it is possible to access their lawyer’s strategic help.

Azrights will unveil a new system to assist online businesses to access legal help at prices all SMEs can afford. Azrights solution will even provide a way for SMEs to retain legal assistance on an ongoing basis using the lawyer as a consultant rather than as document drafter.

Details of this innovative solution will be given in a free teleconference on 28 September which Azrights Intellectual Property and Internet Lawyers are hosting. Shireen Smith will explain how to affordably use Intellectual Property and Internet legal guidance to create an online business on solid foundations while avoiding unqualified advisers and the purchase of off the shelf templates. This is the system all online businesses will want to access in order to avoid building their businesses on shaky foundations.

Any online business that is looking for a cost effective way to enable a specialist lawyer to play a bigger role in their business from the outset, shaping and advising on direction– not just when the business has grown successful enough to warrant an in house legal service – needs to sign up for this teleconference.

The teleconference is presented by Shireen Smith, who having created a business herself, understands the emotional, financial, and creative investment clients make in their own future. With her insight into legal risk and regulatory risk management, the conference offers businesses a way to access something quite different – that is, real help to manage and prioritise legal budgets while controlling risks.

The seminar is presented by Shireen Smith, who has created a business herself, and understands the emotional, financial, and creative investment clients make in their own future. With her insight into legal risk and regulatory risk management, the seminar offers businesses something quite different – that is, real help to manage and prioritise legal budgets while controlling risks.

Sign up for our free teleseminar on 9th September, and learn how to implement a solid business foundation affordably.

Azrights are an Intellectual Property and Internet law firm and trademark attorneys. For further information on Azrights, visit our Internet law and online branding page.