Do you need a business lawyer ?

  You are starting your own business, or your business is growing, and like any entrepreneur, you are sparing no effort to limit costs. In this context, you may wonder whether hiring a business lawyer is a reasonable expense, especially since they are competing with online platforms or accounting firms that can offer more competitive prices. However, there are situations in which you should not do without a lawyer (in the sense of legal advisor). Here's why. 

Legal costs, an immediate expense with long-term benefits

The particularity of legal expenses is that their benefits are sometimes not immediately perceptible. If you have a hectic operational activity and you have little taste for legal jargon, you may think that your (sometimes substantial) expense only translates into complex sentences written down on paper. It’s different from, for example, buying a computer – or any other hardware supporting your productivity – and finding it on your desk ready to use. If, however, you are a little more sensitive to legal issues, you will feel more reassured if you have legally properly framed your transactions. 

Thus, the services of a legal consultant can have a positive effect in the short term, but especially in the long term. In the short term, they will help you to understand the legal framework of your activities, particularly if you operate in a particular sector, or the governance of your company. In the long term, they protect your rights, and you generally only realize it when a problem occurs..

Let's illustrate this with real situations... 

Example 1

You purchase a land and start building construction work with the objective of selling apartments to individuals. After having contracted with a design office and a project manager, you start the work, you have therefore incurred very significant expenses. A few months later, you learn that you should first have obtained a building permit. The local authorities are very unhappy and are requiring the demolishment of the work or, at best, the payment of a substantial fine. This situation could have been avoided if you had asked to a legal specialist to study the legal framework of real estate in the country where you operate. 

Example 2

You start a contract with a service provider who has to develop software for your company's internal use. This software will process sensitive information relating to the core of your activity. After a few months, you realize that the service provider is not efficient, that the software is not taking shape, and worse, that the service provider has leaked important data. You seek to terminate the contract but you realize that it includes an irreducible two-year commitment. In addition, when you try to obtain compensation from the service provider, you realize that a liability limitation clause excludes any claim for damages. This situation could have been avoided if you had submitted the contract to the review of a legal advisor before signing it. 

Legal costs therefore represent an immediate cost which can correspond to considerable savings in the long term. 

Here's when you should hire a business lawyer 

You should consult a business lawyer when your activity represents significant operational and financial challenges and when different interests are present. We can generally consider that there are as many interests as there are people. In the context of a contract, diverging interests can easily be identified : one party is interested in receiving its service, the other its payment. But even in the case of a company with two or more partners, converging interests can become divergent in the long run. 

You should consult a business lawyer when your activity represents significant operational and financial challenges and that diverging interests are at stake. We can generally consider that there as many interests as they are people. In the context of a contract, diverging interests can easily be identified : one party is interested in receiving its service, the other its payment. But even in the case of a company with one or more partners with converging interests, interests can become divergent in the long run.

For example, you partner with a long-time friend who you trust. In the beginning, you are both focused on the success and growth of the business. After a few years, the company reaps significant profits : your partner would like to invest these funds in new projects, but you prefer to collect them, as a reward for all the efforts you have made. If you cannot find common ground, legal documentation will come as a last resort to solve the situation. 

To sum up this article in one sentence, when you start a business, think about the future and protect yourself!

Mandemory is a business law firm committed to Africa and its Diaspora.