Written by: Kristin K. Bailey, Esq.
A new business idea. A new project. Plans to take your business to a new level of financial growth and popularity. If you're a small business owner, all of these aforementioned items probably fuel and excite you as you plot to take over your particular field of expertise and develop your presence within your industry. As you plot away, you definitely want to take into consideration possible legal implications of the decisions that you're making. Oftentimes, it is easy to get caught up in various business growth plans without considering necessary risk-averse legal processes that would prevent negative legal and financial pitfalls along the way.
In essence, you want to take a proactive approach to legal with your business. A proactive legal approach, in my opinion, all comes down to issue-spotting. Having an attorney in your back pocket for consulting purposes is always a good idea when it comes to issue-spotting (remember: that's what they are trained to do). Before you launch a new business idea, you will likely need certain contracts to protect your idea. For example, if you intend to work with an industry expert/consultant on a particular idea, you may want the consultant to sign a well-executed confidentiality agreement in order to prevent the consultant from sharing details of your initiatives with others who are in a position to profit off of them.
Or let's say you intend to associate a particular trademark with your business. I sat in a business conference where a presenter advised successful business owners that if they come up with a great trademark, they should just start using it and put a little "TM" next to it in order to legally protect it (or look like they are legally protecting it). I cringed when I heard this advice. I further cringed when she laughed at the fact that well, she wasn't a lawyer and didn't check with a lawyer first so it wasn't legal advice, but her advice worked for her and hasn't gotten her in trouble yet, so why not share it with everyone in the audience?
Her comments were cringe-worthy for a couple of reasons. Well, sharing legal advice without having it first vetted by a licensed attorney is probably a bad idea (and it's not a laughing matter, especially if you wind up in court after taking such advice). Also, relating to her commentary, it wouldn't make much sense for me to use the tagline "Just Do It", for example, just because I happened to "come up" with it one day and it happens to flow with my business name. Adding a "TM" next to it would just add insult to injury! Why? If Nike found out, the company would be within its legal right to pursue legal action against me for attempting to use the tagline. Nike owns it! A proactive approach by either you or your attorney would involve doing a thorough search to find out if someone already owns or is using the name/tagline /etc. that you're considering in order to avoid possible issues down the line.
A more subtle business idea killer that business owners don't always think about are internal policies that should be in place in order to prevent internal bleeding of ideas via disclosure online through
employees. Let's say you are a business owner and you have a staff meeting where you share with your employees that you're about to launch a new beauty product line that is about to revolutionize the cosmetics industry. You want your staff to be on board, so you share the news and get them ramped up for this new adventure, right? Sure, I understand. But let's think about one of your employees (let's call her "Susie"), who is so hyped about the product launch that she immediately goes on Facebook upon returning to her desk to share some essential details on her wall about the new product with her friends. From Susie's perspective, she is excited about her work and wants her friends to know about it. Did she read, understand and sign a confidentiality agreement or a social media policy that would prevent her from sharing these details on Facebook? I hope so. Because guess what: one of her Facebook friends is connected to one of your biggest competitors. The friend subsequently shares this information to said competitor. Time is now of the essence to launch this product, and you have a competitor on your hands without you even knowing about it - yet. A proactive approach to preventing this type of disclosure would be to enforce a social media policy and/or confidentiality agreement that would prohibit employees from disclosing confidential information about your business.
employees. Let's say you are a business owner and you have a staff meeting where you share with your employees that you're about to launch a new beauty product line that is about to revolutionize the cosmetics industry. You want your staff to be on board, so you share the news and get them ramped up for this new adventure, right? Sure, I understand. But let's think about one of your employees (let's call her "Susie"), who is so hyped about the product launch that she immediately goes on Facebook upon returning to her desk to share some essential details on her wall about the new product with her friends. From Susie's perspective, she is excited about her work and wants her friends to know about it. Did she read, understand and sign a confidentiality agreement or a social media policy that would prevent her from sharing these details on Facebook? I hope so. Because guess what: one of her Facebook friends is connected to one of your biggest competitors. The friend subsequently shares this information to said competitor. Time is now of the essence to launch this product, and you have a competitor on your hands without you even knowing about it - yet. A proactive approach to preventing this type of disclosure would be to enforce a social media policy and/or confidentiality agreement that would prohibit employees from disclosing confidential information about your business.
These are just a couple of examples of how small business decisions could have a massive impact on a company. It's essential to have an attorney help you develop a 360-degree legal approach to your business strategies and "issue-spot" possible weak spots in your strategic direction from all angles that may require some type of legal action in place to avoid problems down the road. In my opinion, you're much better off taking as much precaution as possible ahead of time to avoid winding up in court or financial penalties in the future.
