Most Common Legal Mistakes

Most Common Legal Mistakes A Business Owner Makes

Starting your own business can be very exciting, but it can also be very frightening as this business attorney Tulsa knows first hand. You have to deal with the Secretary of State’s office to establish your business. If your business is a professional organization with a license subject to supervision by a state agency (i.e., lawyers, CPAs, doctors, and the like), then you will need to mail the application for a PLLC or drive to Oklahoma City to get it set up in person. Then you have to set up a Google page, social media sites, and “get the word out” that you are in business. Then you need to make money, which may be the hardest part.

During all of this process, it is very easy to make mistakes. Let’s face it, we are all human and sometimes even though we may have the best intentions, we screw up. That’s perfectly fine. But what if you had the knowledge you needed to prevent some of these common mistakes. Here are the 5 most common mistakes business owners make in my business attorney Tulsa experience, and some tips for how to prevent them.

1. Not Having an Employee Handbook with a Signed Acknowledgment Form by Every Employee

This is hands down the most common mistake I as a business attorney Tulsa hear. And the excuses are all over the map. “Does anybody read those anymore?” “Is it really necessary?” Or, my personal favorite, “We are a small, family owned business. Do we really need one of those?” The answer is an overwhelming yes to all of the above. (As an aside, I have an entire piece written on these on my website.)

An employee should never be surprised if he/she is terminated. There should be clear criteria written in your employee handbook that specifies behaviors/actions that will not be tolerated. There should also be written notation of reprimands along with a specific number of offenses that will automatically result in termination.

Firing an employee is much easier if you can point to as much objective material as possible. When you confront the employee about termination, you can show the employee the written evidence justifying termination.

Finally, it makes a defense lawyer’s job much easier when defending your company in the event a wrongful termination lawsuit is filed. The defense business attorney Tulsa can use your employee handbook and written reprimands in the defense of your company. Trust me when I tell you that this information is very persuasive.

2. Not Maintaining a “Hard” Employee File

Most businesses market themselves as “paperless.” Given the environmental trend of our time, I understand their approach. But paper will always have a place in our world. In the hit television show, “The Office,” Steve Carrell aka Michael Scott is invited to speak at one of his employee’s business classes in night school. Michael gets offended when the MBA students challenge that his paper company is outdated as paper is essentially going out of style. Michael responds, “Real business is done on paper. Write that down.” Then the camera shoots to the crowd and everyone types what he just said. It’s a pretty funny scene that this business attorney Tulsa actively enjoys .

I cannot say enough that you need to maintain a paper file on every employee who works for you. I would also preserve employee files for those who are terminated for at least five years after termination.

Why is it so important you maintain a paper file? A number of reasons. First, you are creating evidence that can be used to defend your organization. As a business attorney Tulsa who used to defend businesses in a variety of contexts, I can assure you that more evidence is better than less. Second, computers crash. No matter where you are backing up your data, evidence can be lost or destroyed even though your IT person swore to you that you were protected. I have another article on the concept of spoliation, which is worth a read. But trust me when I say that lost or destroyed evidence is a very big no-no in litigation. Third, there is certain information you have to collect from an employee, such as their W9, drivers’ license, forms of identification, etc. You might as well preserve all of that in a file with other information. I have an article on what to keep in an employee file in another article.

3. Not Owning the Internet

Nobody truly owns the internet. That’s the beauty of it. But there are some folks on the net who have a substantial amount of control over the internet’s content. One of those entities is Google. Use Google to work for you as it is a service you do not have to pay for, but will help get you paid. If you have a satisfied customer, invite the customer to leave a review on your business, even this business attorney Tulsa does that. A friend of mine is a business owner and he gave me a great piece of advice. He told me if he did work for someone and they still owe him money, he will offer to reduce the balance of the final bill in exchange for a Google review. I thought this was a beautiful tactic. And it is something to consider.

Second, do not engage with disgruntled customers. At some point, I suspect someone will leave a negative review of your business. I as a business attorney Tulsa recommend not engaging this customer on the internet. There is a threat the situation could escalate and it is very hard (if not impossible) to get those reviews removed.

If you feel compelled to engage the customer, I recommend writing an apology coupled with a benign remark that everyone agrees is acceptable in response to the review. I would then engage the customer privately and in writing. Perhaps text or e-mail. I have a whole other article on handling customer complaints and offer some suggestions on how to proceed.

Third, make sure you are “pushing” your business. Post in your Facebook page often and create a hashtag so others can follow what you’re doing.

4. Overpaying for Services You Do Not Need

I know what some business attorney Tulsa charge for their services. Many are very reasonable and provide quality work at a reasonable price. Some charge rates that are borderline comical. I discuss in another article an experience I had in court that I will share here. I once went to a simple hearing and another firm sent a senior partner, an associate, a paralegal, and a secretary. Collectively, this combo was probably billing the client at around $850.00 per hour. By means of contrast, I presented to the hearing by myself and charged around $120.00 per hour. You do not need four people to attend a hearing like that. Make sure you are using an attorney who is a steward of your funds and treats your resources as if they were the attorney’s own resources.
Many documents you can fill out on your own. For example, filing the paperwork for a LLC is relatively straight forward. I have also found the Oklahoma Secretary of State’s Office to be very helpful and knowledgeable when it comes to filing the documentation you need.

5. Not Complying with Rules and Regulations

I see this considerably. A friend of mine once owned a local gym and I assisted him with some business attorney Tulsa legal matters. When I started looking at his business, I learned he had not filed his Annual Certificate of renewal for his LLC in a few years. We got him current and paid the fee associated with not filing the document timely. While this fee was relatively minimal, it was money lost for my friend had he complied with the rules.

Many businesses do everything they can to comply with every rule and regulation that exists. Others try to cut corners to increase profits. I assure you that if you engage in this behavior regularly that karma will get you. You will get caught and you will be punished. Maybe it’s a monetary fine? Maybe it’s something much worse? For me, I have a bar license that is regulated by a professional association. If I break an ethics rule, the Bar has broad discretion in their punishment powers up to and including losing my bar license. That would be a very bad thing as I have worked my entire life to become an attorney.

If you do not have an attorney who is knowledgeable with the rules and regulations governing your business, then you are asking for trouble. A knowledgeable attorney can save you thousands of dollars, even potential bankruptcy, by keeping you and your employees advised of the various rules and regulations governing your business. I once heard a lawyer describe having a lawyer is like having insurance. You may never use it. But it is better to have it and not need it than need it and not have it.

If you do not have such a business attorney, consider RC Law Group. I as a business attorney Tulsa am knowledgeable with a wide variety of regulatory agencies and can assist you. If I am not knowledgeable with your particular industry, I have been told by teachers my whole life that I am a “quick study” and will happily get up to speed to protect the best interests of your business.