COVID-19, soaring inflation rates and the cost of living crisis have, without a doubt, created an economic environment of uncertainty and pessimism, with many small and midsize businesses feeling the strain. They are being forced to accept smaller profit margins due to the rising costs of their raw materials, supplies, consumables and energy but are unable to raise prices in correlation with their spiralling costs for fear of losing their loyal customer base.

These businesses, faced with escalating costs and eroded margins, may start to consider options for achieving savings elsewhere, but even in these uncertain times, one area in which they should not look to compromise is that of legal support. There are, however, areas into which their legal spend can be best directed, delivering optimum gain for the investment.

1. Employment Contracts

Legally drafted employment contracts protect the employer and the employee, clearly defining the terms and conditions of the relationship and the duties of both parties. This contract will also outline the terms under which the relationship can be dissolved, including in the event that the business ceases to trade. A signed employment contract is an essential safeguard against unfair dismissal claims which could occur should an employee be dismissed through necessity if the business experiences financial difficulties.

2. Intellectual Property

Every business has intellectual property that it must protect in order to guard against fraud and copyright infringement. A small or midsize business could find its reputation or revenue severely impacted by an imposter copying and distributing its products using its logo, brand name or other recognisable assets of the business. Ensuring that a business' intellectual property is legally protected provides a safeguard against malicious or fraudulent behaviour.

3. GDPR Compliance

Handling, managing and processing customer data securely is of the utmost importance, particularly when a business is expanding into online sales for the first time. Failure to comply with GDPR has severe financial penalties and there is the attendant risk that criminal action may be taken against the firm. Ensuring that a company's GDPR policies are written by a legal professional and clearly understood by everyone involved in handling customer information can protect a company from the ramifications of a GDPR breach.

4. Client Agreements

Any business that delivers a service needs to have legally binding agreements with its clients in order that each party understands its responsibilities to the other. A correctly constructed agreement will also define the way in which a client can raise a complaint or take appropriate action should the service not be delivered in accordance with the agreement. 

Equally, a business that sells products must have a legally binding agreement as to the quality and description of the item that it is selling and the recourse available to the buyer should the item prove to be inadequate. Ensuring that these terms are drafted by a legal expert from the outset can pre-empt costly misunderstandings and disputes after purchase. 

5. Debt Collection

A business relies on its cash flow to remain operational, so when elements of its clientele fail to pay their bills in a timely fashion, this can have a disastrous effect on the business. A seasoned business lawyer can support the business in effective debt collection, from initial communication through to action. This applies even in the event that the action is within the threshold set for the Small Claims Court. 

There are many other ways in which legal support can provide essential services to a small or medium sized business, helping it to remain viable, profitable and protected against the behaviour of other parties. This is of still greater value in facing the exigencies of an economic downturn. Any business that has concerns about agreements, cash flow or any one of a range of potential legal requirements should contact an experienced business lawyer for tailored advice covering the specifics of the situation.