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Small Business Owners: Minimize Your Legal Problems and Fees

One of every three small businesses has been sued or threatened with a lawsuit. A Small Business Administration study found that 55 percent of small businesses faced substantial legal issues. Amazingly, more than half of these businesses never contacted a lawyer. The legal and financial risks to business owners are real.

Here’s how a business owner can minimize legal problems and fees.

The best protection against legal problems is having a well-managed business. Good management and good law are largely synonymous. The right corporate structure documented and properly filed, clear policies about hiring, firing, suspensions, internal investigations, performance reviews, and salary structure, and written procedures, within which individuals can address their concerns, are absolutely necessary.

Solve any conflicts that arise in your business, with customers, competitors, employees, or government agencies, promptly, and at the lowest possible level. Small problems escalate because many of us are not comfortable with, or not educated about, how to resolve conflicts or disputes. Conflicts in daily life are inevitable and must be addressed in good faith.

Do NOT let your lawyer run your business! Although some lawyers have extensive business experience, many do not. The role of an attorney is to advise, and to explain the ramifications of decisions. It is not the job of the attorney to make ultimate business or policy decisions. Get legal advice when needed, but remember that the business owner is ultimately responsible for the creation, health, and direction of the business.

When you do need a lawyer, hire one experienced in the type of issue presented. Pro-actively manage your attorney-client relationship by asking the right questions, such as who will do the work, what experience the attorney has in particular areas, how long it should take to resolve the problem, and what to expect in terms of the fee structure. With some coaching and experience, you can learn to negotiate a client-friendly fee arrangement which requires, for instance, consultation with the client about any expenditures beyond a certain ceiling.

Trust your own best instincts. The Golden Rule has worked for centuries to demonstrate authenticity and one’s desire to deal with others in good faith. Respecting others and treating them fairly and kindly deters lawsuits.



Betsey Neely, Atlanta Women’s Network member, is a lawyer and personal coach. As counsel to the Board of Regents of the University System of Georgia she promoted and developed a statewide conflict resolution program that became the model for universities around the world. Now the Atlanta GA lawyer is on a mission to help small business owners resolve conflicts and stay out of legal trouble.


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