For decades, people have been making doctors’ appointments strictly for preventative care reasons. These check-ups are not prompted by symptoms, but rather in hopes of finding potential problems before they become harder to take care of. We schedule these appointments to ensure that we are in good health and that we remain in good health – because we all know that early detection saves lives. As a lawyer who helps rehabilitate businesses and a person who appreciates the concept of early detection, I often wonder why business owners fail to understand the necessity of periodic legal preventative care appointments with their attorneys. The fact is that legal care check-ups are critical to ensure that your business is operating efficiently, minimizing risk, and maximizing profits. If issues are caught and addressed early the check-up not only could save you tremendous costs in the long term but it also could potentially save your business’s life!
As a business owner, you may resist incurring any legal fees unless you are experiencing what you perceive to be a “symptom,” that is, an obvious legal issue. The most successful companies, however, typically reserve a percentage of their annual operating budget to legal fees for their preventative legal care, in addition to those budgeted for known legal issues. The rationale is to spend a little money now to protect your investment and spot issues before they become major problems requiring significant legal work and expense. Simply because your business pays debts as they come due, makes a profit, and is not involved in a lawsuit doesn’t guarantee those things will not change for the worse or could not be improved.
Attorneys in the turnaround industry not only have experience restructuring debts and designing repayment plans for troubled businesses, but we also have experience counseling management through various operational strategies dealing with leadership, employees, marketing, contracts, forms, leases, vendors, insurance, and investors – just to name a few. Perhaps your business suffers from the “Owner that is Incapable of Delegating” problem; the “Productive But Impossible Employee” problem; the “Bully Landlord” problem; the “Demanding Supplier” problem; and/or the “Unproductive Marketing Plan” problem. Investing in legal advice to solve those problems while they are small and manageable can make an enormous difference. Just ask any of the thousands of businesses every year that find themselves the subject of class action lawsuits over a questionable clause in a form which could have been corrected before hundreds of customers were asked to sign it. You might also talk to business owners that made bad business decisions, lost money as a result of those decisions and have no choice but to file for Chapter 11 reorganization because it is the only option left to save their company.
Just like most health-conscious people realize that a checkup to discover health problems is better than waiting until they are too big to ignore, savvy business owners will regularly schedule legal check-ups with lawyers who understand their industry and can help improve protect and maximize their business’s value. After all, an ounce of prevention is worth a pound of cure.
Jessica Grossarth is a partner in the Bankruptcy and Creditors’ Rights Practice at Pullman & Comley, LLC in Bridgeport, and serves as chair of the LGBT Section of the Connecticut Bar Association. Reprinted with permission from the April 29, 2014 issue of the Fairfield County Business Journal.