by Donald Gross
No matter how successful your business is, it’s a serious mistake to neglect getting a regular legal check-up.
Arrangements that made sense in the past are often no longer optimal for your current operations and they may run afoul of federal, state and local laws and regulations that have changed since the days your company was founded.
After a legal check-up and assessment, you’ll have a far better idea whether specific contracts still make sense – or whether they need to be modified, renegotiated, shortened, extended or terminated to better meet your business needs.
The advantages to you as a business person are numerous – improving your company’s bottom line, avoiding expensive lawsuits resulting from contractual obligations that conflict with your business objectives, and ensuring your business has the licenses, permits and approvals it needs to stay in full compliance with federal, state and local requirements.
A comprehensive check-up covers the full legal framework of your business, including the specific areas described below. Of course, you may want the check-up to focus on just some of the areas about which you have special concerns.
Legal structure – Should the legal entities your company originally put in place be streamlined, expanded or simplified to facilitate business operations and reduce the risk of liability in the event of a lawsuit?
General contract provisions – Do your company’s contracts adequately protect confidential information, allow resolution of disputes through mediation or arbitration, clearly identify the rights and responsibilities of the parties, enable your company to extend or shorten the contract term, clarify the legal jurisdiction governing the contract, and enable your company to end the contract, should that become necessary?
Preventing lawsuits and protecting against liabilities – Are there “blind spots” or ambiguous provisions in contracts that need to be eliminated or clarified in order to significantly reduce the chance of lawsuits that could expose executives to personal liability?
Employment agreements – Do your existing agreements reflect the employee’s current role, ensure full compliance with internal company employment policies, and minimize the risk of disputes?
Business consultants and service firms – Do your contracts with consultants and service firms meet your current needs – or should they be modified, upgraded or terminated?
Commercial real estate leases – Are your commercial leases for office, manufacturing, warehousing or retail space fully aligned with your current and projected business needs?
Equipment leases – Does it make sense to renegotiate and improve the terms of your equipment leases to upgrade your operations and achieve cost savings before an automatic renewal kicks in?
Software licenses – Do your software licenses include the latest devices and technologies relevant to your business or do they need to be modified or replaced and their coverage improved?
Long-term agreements – Has the performance of parties under long-term agreements met all contractual obligations or do the agreements need to be revised to establish new performance milestones?
Inferior performance – If you’ve become dissatisfied with the performance of certain parties, do their shortcomings constitute breach of contract that would establish grounds for termination or a lawsuit?
Licenses and permits – Does your company have all the licenses and permits it needs to fully comply with federal, state and local laws and regulations – or are there gaps in licensing and permitting that need to be filled?
It’s tempting to put off a legal check-up until your company is on the receiving end of a lawsuit or you discover that contracts have locked your company into a highly disadvantageous business situation or you realize that once healthy contractual relationships are now preventing you from achieving important business objectives.
The goal of a legal check-up is to identify problems and implement solutions well before your company operations are negatively impacted by costly legal issues, another party’s shortcomings or contractual disputes.
If your company is interested, we’re happy to provide you with the knowledge you need to move forward – just contact us for a consultation!