Learn to Avoid Five Common Mistakes Successful Business Owners Make

When entrepreneurs’ actions are motivated by a desire to save time or legal fees, the effect is often just the opposite. Even more significant can be the loss of relationship equity with other parties and ultimately the jeopardization of a transaction. Here are five common mistakes clients make – and suggestions for how to avoid them – in order to get the highest return on the investment in legal counsel:

  1. Not involving attorneys until the client needs legal documents. All too often we have seen entrepreneurs present their attorneys with already agreed-to legal terms, with instructions to prepare the necessary documents. The ensuing conversation in which the attorney points-out flaws or better structures is not a happy occasion. Now, the client is in the awkward position of going back to the other party with changes. When this occurs, the cost, in terms of both legal fees and potential harm to the deal, will make the legal fee that could have helped avoid the mess seem like a bargain.
  2. Being selective in what you tell an attorney. It is almost always a mistake to withhold information from your attorney. The most common reasons for doing so are a belief that disseminating information on a need-to-know basis will save legal fees, or a desire to maintain the confidentiality of potentially embarrassing or unfavorable facts. Many a client has paid dearly when it later turns out that the information that wasn’t shared was, in fact, critical or when the embarrassing or unfavorable facts are later disclosed by someone else. Also, remember that the “attorney-client privilege” prohibits attorneys from disclosing information received from a client without the client’s permission.
  3. Rejecting information or advice because clients think they are the exception to the rule. Frequently, when legal advice is not what a client hoped for, they acknowledge the principal but maintain they are the exception to it. The watchword here is skepticism without resistance. By all means, feel free to question and test advice. But don’t let your understandable desire to distinguish your situation from the rule cloud your judgment;
  4. Engaging in “ready, fire, aim” practices. You are more likely to hit your target if you get ready and aim before you fire. All too often, entrepreneurs make to snap decisions they later regret. We help clients with the ready and aim parts so that they can squeeze the trigger instead of jerking it;
  5. Assuming rather than asking. Some of the most common assumptions can expose business owners to substantial risk. For example, many a business owner has incorrectly assumed being permitted to incorporate under a particular name guarantees them the right to use that name in commerce. Asking would have been far easier on the pocketbook (and the digestive system) than dealing with a “cease and desist” letter.

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You are more likely to hit your target if you get ready and aim before you fire. All too often entrepreneurs make to snap decisions they later regret. We help clients with the ready and aim parts so that they can squeeze the trigger instead of jerking it.