They tend to surface when you’re at your busiest: a supplier stops delivering halfway through a contract, or a former employee lodges a claim over something you thought was settled.
Growth makes both more likely, simply because you’re signing more agreements and hiring more people than before. As opportunity increases, so does risk.
The good news is that much of this exposure is predictable and preventable. These are five tips to future-proof your business against legal risk.
1. Treat your contracts as working documents
Plenty of small firms run for years on a template downloaded in their first week. That works until the business changes shape and your terms stop describing what you do.
Payment clauses deserve a close look. A GoCardless survey run with the Federation of Small Businesses found that 52% of small firms write off late payments up to ten times a year rather than chase them.
Spelling out late-payment interest in your terms from the get-go makes chasing easier to justify.
2. Don’t wait until you need a solicitor to source one
Many owners only pick up the phone once something has gone wrong, by which point the options have narrowed.
But having a trusted solicitor to hand who already knows your business makes seeking advice early quicker and usually cheaper.
Dickinson Parker Hill, a long-established firm in Ormskirk, handle commercial property and employment law, alongside contract dispute resolution, which suits a growing company whose problems rarely fall neatly into one department.
3. Sort out employment basics before you hire at pace
Your first ten hires can often be managed informally. Your next twenty can’t.
Every employee is entitled to a written statement of their main terms on or before their first day.
You should also make sure you have disciplinary and grievance procedures written down before anyone needs them. Most workplace disputes start small. A clear, fair process gives your managers something to follow when friction appears, and it’s easier to defend if a dispute reaches a tribunal.
4. Know what your premises commit you to
A commercial lease is often the biggest long-term liability a new company signs, and it’s frequently agreed in a hurry when new space is needed urgently.
Before you commit, make sure you understand your repairing obligations and whether there’s a break clause you can realistically use. Dilapidations claims at the end of a long lease regularly catch tenants off guard, so photograph the property’s condition on the day you move in.
5. Plan for a data breach before it happens
Holding customer data brings obligations under UK GDPR, and a breach can quickly become a regulatory matter.
If a breach poses a risk to rights and freedoms, you generally have 72 hours to report it to the Information Commissioner’s Office. Hiscox’s Cyber Readiness Report found that a third of firms hit by an attack faced regulatory fines. Decide now who leads your response, and keep a log of what data you hold and where.
None of these measures need to eat into your week. An annual check of your contracts and policies, ideally alongside your year-end planning, keeps your paperwork in step with the business as it grows. Get the basics right early and you’ll have more time for the work that actually moves you forward.
