In practice, we see very few businesses or their owners appointing a trusted attorney as part of their founding team. The reason for this, from our experience, is mostly based on a lack of the required financial means needed to make such an appointment right from the start.

 

The unfortunate reality is however, that many businesses under-perform or perish before they have actually lived mainly because of poor planning.

 

What is puzzling though, if this is true, is that few businesses seem to weigh up the benefit of early engagement against the possible expense. In addition, the possible saving, in the context where attorneys are able to identify legal risk or the risks posed by changing regulations, thereby saving the businesses money. So, is money the real reason?

 

Why is engaging an attorney at an early stage so important?

Another interesting statistic is that businesses who employ the services of an attorney (amongst other core professionals) ideally at founding, or at least soon thereafter, have shown a better business success rate. Which begs the question – why?

 

In my view, it is because they grow safely, avoiding the preventable legal risks, which is statistically, other than financial risk, the most prudent risk to avoid. Particularly at the beginning of a business’ life cycle. Moreover, these businesses realise the importance of focussing on the other core aspects of the business, which cannot be responsibly delegated.

 

Another prudent question is; why do some businesses see the need whilst others do not?

 

I, personally, cannot accept that misconception or ignorance is the sole source why businesses are not appointing a trusted legal advisor at founding or as soon as possible thereafter. Similarly, that cost is a deterrent.

 

If this were true, it would mean that all start-ups and SME’s do not only aggressively focus on their businesses, but also on keeping up with changing regulation and implementing the required mechanisms in their businesses. Or they simply do not see legal risk as any risk whatsoever. This, at a time when there is so much to do conceptually. Why be “penny wise and pound foolish”, as they say? This way of thought is, in my opinion, only a cost saving on the surface, but what about the cost resulting when something was missed and what about a negative outcome from an oversight? Or the cost saving of preventing an avoidable risk?

 

As a legal professional, I firmly hold the opinion that most disputes can be avoided by ensuring legal compliance and further adapting your processes to the ever-changing demands of the regulatory landscape. Few people unfortunately realise the gravity of the destruction of an avoidable dispute, until they end up spending more hours attending to the dispute than on building their business.

 

In truth, not all disputes can be avoided by planning and advice, but the majority can.

 

We therefore recommend that businesses consider hiring a “legal goalkeeper” for their business. This is a legal professional dedicated to the business and the people behind it. We assist in helping you avoid avoidable risks and disputes. For more information, please see: http://www.schoemanlaw.co.za/get-your-very-own-legal-goalkeeper/

About The Author

Nicolene Schoeman-Louw

I founded the firm Schoemanlaw Inc in 2007 aged 24 and am the Managing Director of the firm. I am an admitted attorney of the High Court of South Africa, as well as a Conveyancer , Notary Public and Mediator. I obtained my LLB degree cum laude and successfully completed my LLM degree (dissertation) in commercial law and B-BBEE at the University of the Free State. In addition I obtained my postgraduate diploma in financial planning (CFP) at the University of Stellenbosch. An abstract of my LLM dissertation was published in the Journal for Estate Planning in 2006 and is regularly published in De Rebus (the SA attorneys’ journal) as well as Without Prejudice and Polity.org (legalbriefs). I also write regularly for various online publications such as Spice for Life and other mainstream publications such as The Entrepreneur Magazine, Personal Finance Magazine and have a regular slot on SAfm’s The Law Report with Karen Key. For more information visit http://www.schoemanlaw.co.za/about-us/

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