Most business disputes do not begin with a dramatic betrayal or a screaming match in a conference room. They usually start with something smaller. A cost increase. A delayed payment. A vague agreement. A partner making a decision without full buy-in. A vendor relationship that starts drifting off course. A client who expected one thing and believes they got something else. In other words, business conflict often starts the way many business problems start: with ordinary pressure and unclear expectations. Rising prices are one common trigger. So are cash flow issues, shifting responsibilities, changing priorities, poor communication, and disagreements about who has the authority to make decisions. On their own, these issues may seem manageable. But when they are layered onto a weak contract, a strained relationship, or a lack of process, they can turn into real legal and operational problems. Common issues that lead to business conflict Conflict can grow out of all kinds of day-to-day business issues, including: increased costs or pricing disputes unpaid invoices or late payments disagreements between owners or partners vendors failing to perform as expected clients pushing beyond the original scope of work unclear contract terms one side changing expectations midstream unauthorized decisions or commitments misunderstandings about roles, responsibilities, or ownership What these situations have in common is that they tend to raise the same underlying questions. What was actually agreed to? Who had authority to act? What does the contract say? What was communicated? And what is the smartest way to respond now? Why these problems escalate so quickly A lot of business relationships function on momentum and trust. That is not always a bad thing. But when something changes, whether it is money, timing, performance, or priorities, the gaps start to show. That is often when businesses realize: the contract does not clearly address the issue the parties understood the arrangement differently internal decision-making was not as clear as everyone assumed important communications were never properly documented nobody addressed the issue early because they hoped it would work itself out Hope is useful in many parts of life. It is not a particularly strong dispute resolution strategy. The best move is to be proactive The most effective way to deal with business conflict is often to reduce the chances of it happening in the first place. That usually means tightening up a few fundamentals. Clear agreements A good contract should do more than capture the basic deal. It should help address what happens when things go wrong or change. That can include pricing terms, payment obligations, approval procedures, change-of-scope terms, termination rights, ownership rules, and dispute resolution provisions. The less clear the agreement, the more room there is for conflict when pressure hits. Clear internal rules Many disputes are not just external. They are internal too. A partner, manager, or owner acts without full authority, makes a commitment, moves money, or changes direction, and now the business has a relationship problem both inside and outside the company. Clear internal governance and decision-making procedures can help prevent a lot of unnecessary damage. Clear communication Business disputes often get worse because people respond too fast, too casually, or too emotionally. One poorly worded email can make a solvable issue harder to resolve. A more strategic approach is usually to pause, review the documents and facts, and respond with a plan instead of irritation. What to do when conflict has already started Once a dispute is underway, speed matters. That does not mean every disagreement needs to become a legal battle. In fact, many disputes are best resolved through practical negotiation, better documentation, or a carefully structured business solution. But waiting too long can reduce options and increase cost. Getting help early can make it easier to: evaluate the legal and practical issues preserve useful leverage avoid admissions that create bigger problems protect important documents and communications resolve the issue before positions harden Often the goal is not simply to “win.” It is to protect the business, contain the distraction, and reach the best available outcome under the circumstances. The visible problem is not always the real problem What looks like a simple disagreement about money, timing, or performance may point to a larger issue underneath. A vendor dispute may reveal a bad contract. A client payment issue may expose scope creep or poor approval practices. A disagreement between partners may uncover governance problems that have been simmering for years. That is one reason it is important not to look at these issues too narrowly. The immediate conflict matters, but so does the structure around it. A practical legal approach matters Not every business dispute should be handled aggressively from the start. And not every issue should be treated like a minor misunderstanding either. The right response depends on the facts, the documents, the business relationship, the amount at stake, and the client’s goals. Sometimes preserving the relationship is the priority. Sometimes the priority is getting paid, limiting exposure, or stopping things from getting worse. That kind of judgment is hard to apply when you are in the middle of the conflict yourself. Final thought Business conflict often starts with a common problem that was never handled clearly enough on the front end. The best thing to do is be proactive: use strong contracts, clear processes, and thoughtful communication to reduce the chance of trouble. The next best thing is to get help quickly once the trouble starts. Many business disputes can still be resolved effectively, but they usually do not improve by being ignored.
Your Business Partner Took Money or Signed a Deal Without You: What Now?
Owning part of a business without having control can be a great opportunity or a slow-motion nightmare. Maybe you bought into an existing company. Maybe you started a business with a partner who has the larger share. On paper, you’re an “owner.” In practice, you might feel more like a passenger… in a car you helped pay for, but don’t get to drive. This article is about what it really means to be a minority owner in a New York LLC or corporation, the risks that come with it, and how you can protect yourself, ideally before things go sideways. What It Means to Be a Minority Owner Being a minority owner (anything less than 50%, and especially under 25–30%) often means: • You don’t control major decisions. • You can be outvoted on day-to-day management. • You may not control when (or whether) money is distributed. • You might not have an automatic right to a job, salary, or role. You own a piece of the pie—but the majority owner often controls how the pie is sliced, when it’s served, and to whom. That doesn’t mean being a minority owner is bad. It just means the documents matter a lot more than the vibes. Common Problems Minority Owners Run Into Here are some of the greatest hits I see in real life: 1. “We’re Making Money… But I’m Not Seeing Any” The company is doing well. Revenues look good. The majority owner is paying themselves a nice salary or charging “management fees.” You? You’re not getting distributions… or you’re getting far less than you expected. Typical issues: • No clear policy on when profits are distributed. • Majority owner taking most of the value through salary/expenses instead of distributions. • You have no practical way to force a distribution. Good documents can set expectations: when profits will be distributed, how much should be retained in the business, and what requires mutual agreement. 2. Locked Out of Information Another common minority-owner complaint: “I have no idea what’s going on.” Red flags: • You’re not getting regular financial statements. • Major decisions are made without your knowledge. • You only find out about problems when they’re already on fire. Under New York law, owners often have certain information rights—but enforcing them can be slow, expensive, and relationship-damaging. It’s far better if your operating agreement (LLC) or shareholders’ agreement (corporation) clearly says: • What financial reports you get. • How often you get them. • What additional information you’re entitled to on request. 3. You Lose Your Job… But Still Own the Business Here’s a fun situation (for the lawyers, not for you): You’re both an owner and an employee. Things sour. The majority owner fires you. Now you’ve lost your salary, benefits, and any day-to-day involvement—but you still own your minority stake. You’re stuck: • No paycheck. • No control. • No easy way to get bought out. This is why minority owners should think carefully about: • What happens if they’re terminated as an employee. • Whether termination triggers a buyout. • How that buyout is priced and paid. 4. Surprise Dilution and “Please Wire More Money” Two classic scenarios: • The company needs cash, and the majority owner says, “We’re putting in more capital. If you don’t, your percentage goes down.” • New investors come in, and suddenly your 20% becomes 8%. Sometimes that’s legitimate. Companies need capital. But as a minority owner, you want rules around: • How new capital contributions are handled. • Whether you have a right to participate in new funding rounds. • When and how your percentage can be diluted. If this isn’t addressed up front, it’s very easy to wake up one day owning a much smaller piece of a much more complicated pie. How Minority Owners Can Protect Themselves (On Paper) The best time to protect yourself is before you sign or buy in. The second-best time is now. Here are key protections to look for (or negotiate): 1. Voting and Veto Rights on Big Decisions Even if you don’t control day-to-day operations, you can negotiate veto rights on truly important issues, such as: • Taking on major debt • Admitting new owners or investors • Selling major assets or the entire business • Changing the nature of the business • Approving large bonuses or management fees • Amending the operating/shareholders’ agreement You may not get a veto on everything—but you should at least talk about what must require your consent. 2. Clear Information Rights Your agreement should spell out: • What financial reports you receive (e.g., quarterly P&L, annual balance sheet). • How quickly they must be provided. • Your right to inspect books and records within reasonable limits. If the majority owner pushes back on basic transparency, that’s not just a legal issue—that’s a relationship issue. 3. Distributions and Cash Flow Expectations You can’t force a business to distribute money it doesn’t have. But you can: • Set a general policy (for example, a percentage of profits distributed annually, subject to reasonable reserves). • Require mutual agreement for unusually large salaries, bonuses, or related-party payments that affect available profits. This doesn’t have to be rigid—but it should provide guidelines so “we’ll figure it out later” doesn’t become “you never get paid.” 4. Exit Rights and Buy-Sell Provisions This is often the most important—and most neglected—piece. Ask: • If I want out, can I force a buyout? • What events trigger a buyout? (death, disability, termination of employment, deadlock, breach of agreement, etc.) • How is the price calculated? (formula, agreed valuation, appraiser, etc.) • How is it paid? (lump sum vs. installments, interest, security) Without a buy-sell or some kind of exit mechanism, you can easily end up stuck: unhappy, underpaid, and unable to force a change. 5. Reasonable Non-Compete / Non-Solicit Terms Minority owners are often asked to sign non-compete and non-solicitation agreements. Questions to consider: • If things go bad, can you continue working in your field at all? • Are you prevented from starting a new business even if they freeze you out? • Are the restrictions tied to a fair buyout of your interest? Sometimes the better approach is a narrower non-solicit (no poaching clients or employees) rather than a broad ban on working in your own industry. What If You’re Already in a Bad Spot? Maybe you’re reading this as a current minority owner thinking, “Great. I should have done all this three years ago.” You still have options: • Review your existing documents.Operating agreement, shareholders’ agreement, employment agreement, side letters—everything. Understand what rights you do have. • Make a list of specific issues.Lack of information? No distributions? Being cut out of decisions? Having your role reduced? That list will guide strategy. • Consider a business conversation first.Sometimes, things can be fixed with an amendment, a clearer distribution policy, or a negotiated exit—before lawyers and litigation get involved. • If necessary, explore your legal remedies.New York law does give minority owners certain protections in extreme cases (for example, oppression, breach of fiduciary duty, corporate waste), but asserting those rights is serious and needs careful analysis. This is where having your own counsel, not the company’s lawyer, really matters. When It’s Worth Calling a Lawyer It’s smart to get legal advice if: • You’re about to buy a minority stake in a business. • You’re joining a company as a minority owner and employee. • You’re being asked to sign an operating agreement/shareholders’ agreement you didn’t draft. • You’re already a minority owner and starting to feel uneasy about money, information, or decisions. • You want to negotiate your way out without blowing up the relationship. These are exactly the kinds of situations we help New York business owners and minority shareholders/members navigate ideally before “minority owner” turns into “major problem.” If you’re in that position and want a straightforward, practical review of your situation and documents, we can talk through your options and a realistic path forward. 
Launching an online course, coaching program, or paid mem bership can feel exciting until you realize how easy it is for someone to copy your content, demand a refund, or share your materials without permission. The good news? With a few smart legal steps, you can protect your hard work and your peace of mind without killing your momentum or creativity. 1. Own Your Content (and Prove It) Your videos, worksheets, guides, and recorded sessions are your intellectual property the moment you create them.But if you ever have to enforce that right, you’ll need proof. Practical steps: • Keep dated drafts, scripts, or file metadata showing you created the material. • Add a simple copyright notice on your website and materials. • Register key materials with the U.S. Copyright Office if they’re valuable or likely to be copied. This small step can make the difference between sending a polite “take it down” email and having the leverage to enforce your rights. 2. Set Clear Terms and Disclaimers Many online programs skip the fine print until a client demands a refund or claims the course “didn’t work.” You don’t need to drown people in legalese, but you do need clear, customized terms that cover: • Refund and cancellation policies (especially for digital products) • Payment plans and chargebacks • Access limits — how long members keep materials • Disclaimers for results (e.g., “no guaranteed income or outcomes”) • Intellectual property rules — what students can and can’t reuse These can appear as a checkbox at checkout (“I agree to the Terms”) or in your onboarding emails as long as they’re clearly accepted before purchase. 3. Protect Your Brand and Name Your program name, logo, or tagline might be your biggest marketing asset.A trademark protects it from copycats and confusion. Ask yourself: • Is anyone else already using a similar name in your field? • Would losing this name hurt your business identity? If the answer is yes, filing a trademark early is one of the smartest investments you can make. 4. Use Client Agreements — Even Online If you’re running a higher-touch program (like group or 1:1 coaching), go beyond simple checkout terms.A written Coaching Agreement or Service Agreement should define: • Scope and limits of your services • Confidentiality and use of materials • What happens if payments stop • Scheduling, rescheduling, and termination rights This protects both sides and sets clear expectations which actually strengthens the client relationship. 5. Mind the Compliance Details A few extra checks can keep your online business out of regulatory trouble: • Privacy Policy: Required if you collect emails or payments online. • Email marketing laws: Always include an unsubscribe link. • Testimonial disclosures: If clients were compensated or received a freebie, say so. • Sales tax: Digital products and memberships may be taxable in some states (including New York). None of these are hard to fix, but ignoring them can get expensive fast. Bottom Line If you’re serious about your online business, treat it like one.A few upfront protections can prevent thousands in losses later and help you look more professional from day one. You don’t have to figure it all out at once. Start with the basics your terms, your agreements, and your brand protection and build from there. (Attorney Advertising. For general informational purposes only and not legal advice. For guidance on your specific situation, consult a qualified attorney.) 
Buying a business can be a smart shortcut to g rowth, but it’s also one of the riskiest things a business owner can do without the right planning. Whether you’re acquiring a small local shop or a growing service company, the legal structure of the deal matters just as much as the purchase price. Here’s what experienced buyers look for and what many first-timers overlook. 1. What Exactly Are You Buying? One of the first (and biggest) decisions is whether you're buying: • Assets (e.g., equipment, customer lists, contracts, goodwill), or • Equity (e.g., shares in a corporation or membership interests in an LLC) Each path has very different consequences for liability, taxes, and post-sale headaches. Asset purchases generally let you cherry-pick what you want while equity deals carry more risk (and often require more due diligence). 2. What Liabilities Could Come With It? Buying a business doesn't just mean getting the good stuff. You might also inherit: • Tax liabilities (including sales tax, payroll taxes, or back filings) • Unwritten promises to customers or vendors • Employee issues (classification errors, unpaid wages, wrongful termination claims) • Leases or contracts with hidden obligations Even in asset deals, certain liabilities, like unpaid NYS sales tax, can follow the buyer. Due diligence is not optional. 3. How Will You Pay—and What Happens If You Don't? Seller financing is common in small and mid-sized business sales. That means: • You pay part of the price upfront • You make payments over time, with interest • The seller may require security, like a lien on business assets or a personal guarantee Make sure you understand what happens if revenue drops. Can the seller accelerate payments? Repossess equipment? Sue you personally? 4. Who’s Sticking Around After the Sale? Don’t assume the current owner will help with the transition unless it’s in writing. Buyers often need: • A consulting agreement to keep the seller on board for a period • A non-compete or non-solicit clause so they don’t open a competing business across the street • Clear handoff plans for relationships with key customers, vendors, and staff 5. What Are You Not Getting? Ask early: What licenses, contracts, or relationships don’t transfer automatically? • Franchise rights, liquor licenses, or certifications might require separate approval • Vendor contracts could be non-transferable or terminate on a sale • Lease assignments need landlord approval and may trigger a rent increase Final Thought Buying a business isn't just a transaction, it’s a strategy shift. It can pay off, but only if you go in with eyes open and the right protections in place. If you’re thinking about buying a business, take time to map out the risks, not just the opportunity. 
Running a business or nonprofit means dealing with people—partners, vendors, employees, clients—and sometimes, conflict is inevitable. But not every disagreement has to end in a courtroom. In fact, most shouldn’t. The key is knowing how to respond early, strategically, and with the right mindset. Here’s how to keep disputes from spiraling and protect your business in the process. 1. Don’t Ignore the Tension One of the most common mistakes business owners make is pretending a disagreement will resolve itself. Maybe someone hasn’t paid an invoice. Maybe a partner is acting without consulting you. Maybe a vendor failed to deliver what they promised. When you feel something is “off,” chances are, it is. 📌 Tip: Address the issue while it’s still a disagreement, not a crisis. Early action gives you more control and credibility. 2. Start with a Direct (but Documented) Conversation Whenever possible, pick up the phone or meet in person. A calm, non-accusatory conversation can clarify misunderstandings and preserve relationships. But always follow up in writing. 📌 Example: “Thanks for taking the time to talk earlier. Just to recap, we agreed that…” This creates a paper trail without escalating things and gives you evidence if legal action becomes necessary later. 3. Know When It’s Time to Involve a Lawyer A lawyer isn’t just for litigation. In many cases, bringing in counsel early can prevent a lawsuit. An attorney can help: • Review contracts to see what rights you actually have • Draft a demand letter that gets taken seriously • Propose a resolution that’s legally sound And importantly, a lawyer helps you evaluate the cost of escalation versus resolution. Sometimes, preserving goodwill or avoiding distraction is the smarter move, even if you’re technically “right.” 4. Consider a Demand Letter Before Filing a Claim A well-written demand letter is often the turning point. It shows you’re serious, puts legal arguments in writing, and gives the other side a chance to fix things without court. In my experience, many disputes resolve shortly after this step, especially when the other side sees the risk of inaction. 📌 But beware: A demand letter should be carefully crafted. Overly aggressive language can backfire, and vague or emotional arguments often get ignored. 5. Keep Your Emotions (and Social Media) in Check Frustration is normal, but public posts, angry emails, or venting to mutual contacts can come back to haunt you. Assume everything you say or write could one day be shown to a judge… or your client. 📌 Internal rule: When in doubt, pause. If it’s emotional, don’t send it. If it’s strategic, have it reviewed. 6. Know Your Off-Ramps: Mediation, Arbitration, or a Clean Break Litigation isn’t always avoidable, but it’s rarely the only option. Mediation offers a lower-cost, lower-risk way to reach resolution, often in a single day. Arbitration may already be required under your contract. And sometimes, the best move is simply negotiating a clean exit, even if it feels unfair. Final Thought: Control the Process Before It Controls You Legal disputes don’t have to be catastrophic. In many cases, they’re a sign your business needs better boundaries, stronger agreements, or clearer communication channels. If you’re facing a conflict—big or small—don’t wait until it becomes unmanageable. Getting the right advice early on can save you money, stress, and sometimes even the relationship itself. Want to talk strategy? I help New York businesses and nonprofits navigate disputes with clarity and control before things spiral. 
If you’ve formed a Limited Liability Company (LLC) in New York, you might think t hat filing your Article s of Organization is all you need to do. However, New York legally requires LLCs to adopt an Operating Agreement—even if you’re a single-member LLC. An Operating Agreement outlines how your LLC will be managed and helps prevent disputes between owners. While it doesn’t need to be filed with the state, it must be adopted within 90 days of formation. Failing to create one could leave you vulnerable to legal and financial issues. For LLCs with multiple owners, not having an Operating Agreement can be disastrous, leading to disputes over ownership, management, and profit distribution. Here’s why every New York LLC should have one—and what can go wrong without it. What is an Operating Agreement? An Operating Agreement is a legally binding document that sets the rules for how an LLC will operate, including: - Ownership structure (who owns what percentage of the business)- Management rules (who makes decisions and how)- Profit and loss allocation- Dispute resolution procedures- Exit strategies (what happens if an owner leaves) Even though New York law requires every LLC to have one, many businesses skip this step. That can be a costly mistake, especially for LLCs with multiple members. New York’s Legal Requirement for Operating Agreements Under New York LLC Law (Section 417), all LLCs—whether single-member or multi-member—must adopt a written Operating Agreement within 90 days of filing the Articles of Organization. While New York does not require you to submit the agreement to the state, failing to create one could expose you to legal uncertainty if a dispute arises. If you don’t have an Operating Agreement, the state’s default LLC laws will govern your business—often in ways that aren’t favorable to you. What Can Go Wrong Without an Operating Agreement? 1. Ownership Disputes Can Derail the Business If multiple members disagree on who owns what, who has decision-making power, or how profits are split, things can quickly get messy. 📌 Example: Two business partners assume they are 50/50 owners, but one contributed more startup capital. Without an Operating Agreement specifying ownership percentages, a major dispute arises when the business becomes profitable. Without a written agreement, courts will default to New York’s LLC laws, which might not reflect the members’ actual intentions. 2. Deadlocks Can Paralyze Decision-Making New York law doesn’t provide a clear solution for when LLC members can’t agree on a major business decision. Without an Operating Agreement outlining decision-making rules, a 50/50 deadlock can halt operations or even force dissolution of the LLC. 📌 Example: A two-member LLC disagrees on whether to take on a new investor. With no Operating Agreement specifying a tie-breaking mechanism, they reach an impasse and must take the matter to court—or dissolve the business. 3. New York’s Default Profit-Sharing Rules May Not Match Your Intentions Under New York law, LLC profits and losses are split equally among all members unless stated otherwise in an Operating Agreement. This means that even if one member invested more capital or works significantly harder, they still receive an equal share unless an agreement specifies otherwise. 📌 Example: One partner contributes $100,000 to start the business, while another contributes $10,000. Without an agreement stating otherwise, New York law may require profits to be split 50/50, regardless of investment. 4. An Owner’s Departure or Death Can Create Chaos If a member leaves, dies, or becomes incapacitated, what happens to their share of the business? Without an Operating Agreement, their ownership interest may pass to their heirs, potentially bringing in new, unwanted partners. 📌 Example: A three-member LLC loses one owner unexpectedly. Their spouse inherits their share and wants to sell it to an outside party. The remaining owners have no right to stop the sale because no buyout terms were defined in an Operating Agreement. This can lead to ownership disputes, financial strain, and even dissolution of the LLC. 5. Lack of Liability Protection One of the main benefits of an LLC is limited liability, meaning owners aren’t personally responsible for business debts. However, if you don’t have an Operating Agreement, a court might disregard your LLC status, making you personally liable. 📌 Example: A business is sued, and the court finds that the owners failed to follow formal business procedures because they had no Operating Agreement. The court pierces the corporate veil, making the owners personally responsible for debts. 6. Bringing in New Owners (or Selling Your Interest) Can Be Complicated Without an agreement in place, adding new members or selling your ownership share becomes unpredictable. New York’s default LLC rules may force unwanted ownership changes, or members may have no say in who joins the business. 📌 Example: One member wants to retire and sell their share of the business. The other members can’t agree on a valuation, and with no buy-sell provisions in place, the situation escalates into a legal dispute. Why Even Single-Member LLCs in New York Need an Operating Agreement Even if you are the only owner of your LLC, an Operating Agreement helps by: ✔ Maintaining limited liability protection (proving your LLC is separate from you personally)✔ Establishing business continuity (in case you bring in partners or sell the business later)✔ Preventing legal challenges to your business structure Since New York requires an Operating Agreement, it’s always best to have one in place from the start. What Should Be in Your Operating Agreement? A strong Operating Agreement should include: 🔹 Ownership percentages & capital contributions🔹 Decision-making authority & voting rules🔹 Profit and loss allocation🔹 Buyout & succession planning🔹 Rules for adding/removing members🔹 Dispute resolution procedures Conclusion If you own an LLC in New York, an Operating Agreement isn’t optional—it’s legally required. But beyond compliance, it’s one of the most important legal safeguards for your business. Whether you’re a single-member LLC or have multiple owners, having a clear, customized agreement protects you from future disputes and legal headaches. 💬 Need help drafting an Operating Agreement for your New York LLC? Contact me today to ensure your business is protected and compliant!
Most business owners have probably seen reminders to file their Beneficial Ownership Reports by January 1, 2024 to avoid potential large fines. These filings were a requirement of the Corporate Transparency Act, which was blocked nationwide by a District Court for the Eastern District of Texas on December 3, 2024. At this time, it is not clear whether the Justice Department will appeal the ruling and, if so, how likely it would be to prevail. It is also not immediately clear whether the deadlines would be pushed back if the block is lifted. However, for the time being, businesses are not obligated to complete the Beneficial Ownership Report filings. You can read more about the Corporate Transparency Act and Beneficial Ownership Information filings in an earlier post. 
Article by Alex Herd published by New York State Bar Association The following article, written by Alex Herd, was published by the New York State Bar Association in Volume 45 of One On One on August 2, 2024. Available here. Demonstrating value to prospective clients is vital to a business lawyer’s success. Your ability to articulate your skills and efficiency will help you convert not only prospects into clients, but also one-time clients to regular clients. You can accomplish this by effectively pitching the benefits of serving as Outside General Counsel (OGC): higher quality of service at a lower cost. Many clients may be familiar with in-house or general counsel, but they may not have heard of the concept of an OGC. You can build long-standing relationships with clients by highlighting the key benefits of an OGC: • Services tailored to their needs • One-stop legal resource • Cost-effectiveness The Benefits of General Counsel, In-House or Outside Businesses see their general counsel as their trusted first point of contact for any legal matter. General counsel is relied on for a wide-ranging scope of services to meet the diverse legal needs of the client. Some key examples include: • Contract Review and Drafting: OGCs can review, negotiate, and draft a variety of commercial contracts, such as vendor agreements, leases, licensing deals, and sales/ purchase contracts. Their familiarity with the client’s business allows them to ensure contractual terms align with the organization’s long-term objectives. • Compliance and Regulatory Guidance: OGCs can advise clients on complying with relevant laws, regulations, and industry standards applicable to their operations. This may include areas like employment law, data privacy,or financial reporting. • Corporate Governance: OGCs can counsel clients on matters of corporate structure, board oversight, shareholder rights, and other governance best practices. This is especially important for privately held companies andnon-profit organizations. • Litigation Support: While OGCs do not typically handle litigation directly, they can work closely with litigation counsel to provide strategic guidance, oversee the legal process, and ensure the client’s broader interests are represented. • Risk Assessment and Mitigation: By deeply understanding the client’s operations, OGCs can proactively identify legal risks and collaborate with the client to implement policies, contracts, and other measures to mitigatethose risks. A business that hires general counsel is able to develop the attorney-client relationship over time. This allows the attorney to learn the intricacies of the business’s goals and typical legal needs and efficiently and holistically address any issues that arise for the organization. The key is for the OGC to deeply understand the client’s operations, goals, and typical legal needs. This allows the OGC to address any legal issues that arise in a way that benefits the entire organization, not just the specific matter at hand. Pitching Outsider General Counsel as an Alternative to In-House Counsel Clients may be skeptical that an OGC with multiple clients can deliver the same particularized attention as a dedicated in-house counsel; however, this concern can be turned into a positive. Rather than maintaining a full-time in-house counsel, the client can leverage the OGC’s diverse knowledge and flexible model to address their legal requirements in a cost-effective manner. While in-house counsel only deals with matters that arise in representing one client, OGCs have the benefit of experiences spanning multiple business sectors and legal domains, such as contracts, employment, intellectual property, compliance, and litigation. This broad expertise enables the OGC to efficiently represent the client without the high overhead of a dedicated in-house legal team. OGCs also often benefit from a trusted network of attorneys and professionals they can consult with when legal issues cross into specialized areas. This will allow clients to avoid navigating a web of specialized attorneys. This can save them significant time, money, and energy compared to the piecemeal approach of working with multiple law firms and the need to identify a new attorney each time a different legal issue arises. OGCs can save the client time, money, and resources by managing all of their legal needs in one place, within a budget tailored to the client’s business. What Characteristics Should Outside General Counsel Have? Trustworthiness is one of the most crucial qualities for an outside general counsel. Clients need to have complete confidence that they can bring any legal issue to the OGC and receive effective guidance towards a solution. Building this level of trust requires providing strong strategic advice and demonstrating a steadfast commitment to the client’s best interests. Additionally, it is critical for an OGC to recognize the areas of law where their own expertise may be limited. Having a reliable network of trusted professionals, whether within the OGC’s own firm or external specialists, is essential for seeking additional guidance when needed to serve the client effectively. Finally, the ability to address new and complex topics on a regular basis is key to succeeding as an OGC. Unlike specialized counsel who may handle similar matters repeatedly, OGCs must be prepared to tackle unique questions and challenges that their clients bring. While specialized attorneys may repeatedly draft similar contracts or motions, OGCs cannot rely on repetitive assignments. They must continuously expand their knowledge and adapt their approach to meet the diverse legal needs of their clients. Alex Herd is the managing member of Herd Law Office LLC. He is an experienced business and non-profit attorney with a passion for helping small business owners and acting as a trusted advisor to his clients by serving as outside general counsel to many clients. Reprinted with permission from the New York State Bar Association © 2024 
In the world of business, contracts are the pillars upon which successful relationships are bu ilt. Whether you're a seasoned entrepreneur or just starting out, having well-drafted contract templates is essential for safeguarding your interests and minimizing legal risks. There are numerous benefits that business owners can derive from having contract templates created by a skilled business lawyer. Below are some of the ways custom contract templates can benefit your business, along with some examples where these templates would have been helpful to the business. • Tailored Contracts to Meet Specific Business Needs One of the main advantages of working with a business lawyer to create contract templates is the ability to customize them to suit your unique business requirements. A skilled lawyer will take the time to understand your industry, goals, and potential risks, and craft contracts that address these specific considerations. Whether it's a client agreement, vendor contract, or a partnership agreement, having templates that reflect your business's intricacies can help you establish a solid foundation for your operations. Example: A software development company enters into a contract with a client without a clear scope of work or payment terms. As the project progresses, misunderstandings arise, leading to disputes and delays. With a well-drafted contract template in place, the company could have clearly defined the project scope, deliverables, timelines, and payment terms, minimizing the risk of misunderstandings and facilitating smoother project execution. 2. Enhanced Legal Protection Contract templates created by a business lawyer offer comprehensive legal protection. These templates are designed with meticulous attention to detail, including critical clauses and provisions that safeguard your rights and minimize potential liabilities. By addressing potential risks and contingencies upfront, businesses can mitigate the likelihood of costly disputes, litigation, and reputational damage. Example: A catering business signs a venue rental agreement for an event without thoroughly reviewing the terms and conditions. Later, they discover that they are responsible for any damages to the property during the event, leading to unexpected financial liabilities. A contract template created by a lawyer would have included clauses that clearly outlined the responsibilities of both parties, ensuring that the catering business would not be held liable for damages caused by factors beyond their control. 3. Time and Cost Efficiency Investing in professionally drafted contract templates can save you significant time and money in the long run. By working with a business lawyer to create templates tailored to your needs, you can streamline your contract negotiation process. With standardized templates readily available, you can focus on negotiating specific terms rather than starting from scratch with each new agreement. This efficiency allows you to close deals faster and allocate resources to other critical aspects of your business. Example: A startup company engages in multiple client engagements without standardized contract templates. As a result, negotiations become time-consuming and lead to delays in finalizing agreements. With lawyer-created contract templates, the startup could have expedited the negotiation process, saving valuable time and enabling them to take on additional clients. 4. Establishing Clear Employment Terms and Policies In addition to client contracts, business owners can greatly benefit from having contract templates for employment agreements and employee handbooks. These templates help establish clear expectations, rights, and responsibilities for both employers and employees, fostering a positive and legally compliant work environment. Example: A small retail business hires a new employee without providing a detailed employment agreement or comprehensive employee handbook. Over time, issues arise regarding work hours, overtime pay, and vacation policies, leading to misunderstandings and discontent among the staff. With a well-crafted employment agreement and employee handbook, the business could have clearly outlined the terms of employment, including work schedules, compensation policies, and vacation accrual guidelines. This would have provided clarity from the outset, minimizing disputes and promoting a harmonious work environment. 5. Compliance with Employment Laws and Regulations Employment laws and regulations can be complex and ever-changing. Business owners face potential legal pitfalls if they fail to comply with these requirements. Contract templates created by a business lawyer ensure that employers have the necessary provisions in place to comply with relevant laws, protecting both the business and its employees. Example: A startup company unintentionally misclassifies its workers as independent contractors, only to face legal consequences and significant financial penalties for violating labor laws. A lawyer-created employment agreement template would have included specific clauses that properly classify workers as employees, clearly outlining their rights, benefits, and tax obligations. This could have prevented the company from inadvertently violating employment laws and facing severe repercussions. In the fast-paced world of business, having contract templates created by a skilled business lawyer is vital for protecting your interests, minimizing risks, and ensuring smoother operations. By tailoring these templates to your specific needs, you can save time, reduce costs, and enhance legal protection. Don't wait for disputes or mishaps to occur; take proactive steps today to fortify your business with expertly crafted contract templates that empower you to navigate complex business relationships with confidence.
