Protecting Your Company's Legal Health
Avoid Problems with Preventive Law
Smart business owners and managers reduce costs and avoid legal
problems with preventive law practices. Much like “preventive medicine” can help us avoid future problems
in our personal health, preventive law helps businesses avoid disputes, injuries, and damage claims. Businesses can also strengthen
their defenses when lawsuits are unavoidable.
This article will introduce you to the value of legal checkups,
legal handbooks, contract strategies and litigation strategies. Your lawyer will help you to adopt the strategies that apply
to your business. Preventive practices should be much less expensive than legal problems down the road.
Legal Checkups Detect Problems
Legal checkups – or legal audits – are something like an accountant's financial
audit or medical examinations given by a physician.
During a legal checkup, your lawyer examines business records
and practices and recommends steps that you can take to protect the legal health of your business. In a typical legal checkup,
your lawyer will review documents such as your corporate charter, corporate minute book, purchase order forms, sales contracts,
employment agreements, and loan agreements. Afterward you may get a written report summarizing findings and recommendations.
An audit may uncover legal problems that should be corrected. For example, it may reveal that the company should revise sales
contracts to limit warranties and liabilities or revise its employment applications to preserve the right to fire unsatisfactory
Besides a written report, your lawyer can meet with you to explain the audit findings and recommendations
and tell you how to avoid potential legal problems. At the meeting you can also learn which problems need immediate attention
and which ones are less serious.
Legal Handbooks Ensure Compliance
Legal handbooks inform business
owners and managers about the laws governing their day-to-day activities and help companies comply with state and federal
regulations. They usually summarize the law and contain compliance checklists. Compliance failures can result in bad publicity,
distracting lawsuits, and costly fines. Your lawyer can provide recommendations in creating a legal handbook for your business.
A typical handbook is about 100 pages long and provides practical guidance on how to comply with the law. Some
handbooks concentrate on one legal subject–such as legal restrictions on product pricing–while others cover several
subjects. The most popular legal handbooks cover areas that can be hazardous to a company's legal health–compliance
with antitrust, consumer protection, labor, and product liability law.
The handbooks are intended as reference
guides to be kept handy on desktops and credenzas. Some companies distribute legal handbooks to all employees while other
companies limit distribution.