Tips to Limit Your Business Risk

Based on the facts presented in Overcoming Crisis: Picking Up the Pieces, Angela Key had the proper legal documents—the non-compete and the confidentiality agreements—in place to protect her and her business. Here are a few things that could help weather this type of situation and limit the owner’s business risk in addition to those already mentioned:

• Have employees sign a non-solicitation agreement that forbids them from going after the employee’s clients within a certain timeframe post-employment.
• Hire an in-house counsel or paralegal to help to take the burden off during litigation and give more time to focus on business and clients.
• Create an employee handbook that defines company trade secrets (like customer lists or pricing sheets), explains what it means to take them without company permission, and informs them of the legal consequences of such acts. And, of course, make sure employees read it.
• Create a risk management plan that details how the company will operate if the owner is not available or if an act of God damages the office. This could also be a useful tool to implement if the business owner is focused on a litigation case.
• Have a good council of professionals that you can call on a moment’s notice and trust to advise you on a range of situations. These include a lawyer, an insurance professional, a CPA, a tax advisor, and a banker or other financial advisor.
• With your attorney and then each employee, conduct a twelve- or eighteen-month review of all employment agreements in place. This will help ensure that your contracts are still valid and that no language in the contract has recently been invalidated by the courts or legislature. It also ensures that the employee is fully aware of what they signed and the potential consequences if they leave the company.
• Stay in constant communication with clients. You do not have to tell them all of the details of what is going on, but make sure you are in constant contact to understand their current and future needs and to continuously remind them of why they should remain your customer.

Related articles

Overcoming Crisis: Picking Up the Pieces
Tips to Protect Your Business from Sudden Death
Tips to Prepare Your Business for a Sudden Interruption

Lawrence D. Wooden, Esq.
Wooden Bowers PLLC, wobolaw.com

(Disclaimer: any legal perspective shared in this article does not create or constitute an attorney-client relationship nor convey or constitute legal advice.)