Small companies are not immune from legal problems. Sometimes it is due to an entrepreneur’s limited business experience. Other times it’s because of the passing of new laws that the company doesn’t know about. Whatever the reason, when a small business owner is confronted by legal issues, here are some steps to take in response.
Obtain Related Reports and Documents
If criminal activity is alleged, get a copy of the police report. If security was breached, contact the security company to request a copy of the telephone call reporting an alarm or video footage of a break-in or theft. You may be advised later to obtain additional documentation, but start with the basics. Any contractors working with the company whose activities may have a bearing on the case might provide records required for the legal proceedings. Speak with an attorney before collecting specific records other than those available to the public.
Organize Company Records
While the routine documents are probably in good order, any records pertaining to the legal issues should be reviewed and organized for further consideration. Legal analysis will likely be needed to determine the scope of the problem and the company’s culpability, if any. Complete records can clear up inconsistencies and answer questions raised about the company’s operations and policies. You may need to obtain copies of accounting reports and tax filings if these are handled by independent contractors, such as an accountant.
Contact an Attorney
Consult a lawyer who specializes in business law matters. The attorney can answer questions and explain the process that will apply to your legal problems. You will be advised about the statutes and timelines to be followed as well as the court proceedings that may be necessary. If the case is expected to be fully litigated, your lawyer may hire a trial consultant to help prepare for that event. The attorney will also explain the documentation that is required or witnesses that may be needed. Usually, the attorney will help to obtain the necessary records for the client.
Outsourcing your legal matters can be a smart move, but some business owners may prefer to keep legal matters in-house. In such cases, forming a dedicated legal team can be a wise long-term investment for your company. This approach ensures that you have a team of legal experts who understand the nuances of your business and can provide tailored advice and support, especially in industries where legal compliance is crucial, such as healthcare or finance. However, building an effective legal team requires careful planning and hiring the right talent. In these cases, it can be worth outsourcing the recruiting process to save time and energy. A recruiting firm can filter, choose, and interview the best candidates and make wise decisions. You can explore startup legal recruiters here and learn more about how they can help you with employing new talents.
Meet with Relevant Employees
While maintaining confidentiality, be transparent with the employees who are impacted by the legal situation. Provide periodic updates, and explain their role in the litigation process. Support their involvement by staying positive and allowing access to company documents that may be required on their behalf. There is no need to make everyone uneasy with too much information, especially in the early stages. But neither do you want to create an environment of uncertainty and speculation.
Maintain the Status Quo
Keep the business operations running smoothly and efficiently during the legal process. The company’s morale may be affected by a tense atmosphere if the situation becomes widely known and causes tension. The daily routine and schedule should be maintained if possible. Avoid hiring or firing anyone until more is known about the legal case. Avoid making dramatic changes in the company’s operations. Don’t raise an alarm or share private information with employees. But be honest and ethical in your interactions with employees to reassure them that everything is being done in the best way possible.
Prepare Questions and Concerns
When planning to meet with the attorney, your accountant, and other professionals with knowledge about the legal investigation, have questions ready to ask. That is often easier than emailing questions randomly as they come to mind or making phone calls from time to time, although you should do so if needed. You can also share concerns about anything that is being done questionably within the company’s operations to ensure protocols are followed. You may want to privately develop a fallback plan if the litigation impacts any aspect of production.
Dealing with a legal matter can be difficult for a small business owner. The key is to be prepared and cooperative with your legal team. Keep employees in the loop appropriately while maintaining a stable, upbeat workplace.
