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Proactive v. Reactive — How Legal Counsel Can Protect Small Businesses

You don’t know what you don’t know, until it is too late and you are hip deep in legal troubles. Having an attorney on staff is a luxury that most small businesses feel they cannot afford. Yet, what most small businesses actually cannot afford is to go without legal counsel, which they usually do not realize until the issues pile up and begin to feel insurmountable. From my experience, what most small businesses do not consider, or do not take seriously as they are afraid it will be too expensive, is the hiring of an attorney to work with them as Outside General Counsel. Outsourcing their legal needs, so to speak.

The benefit of hiring outside counsel proactively, meaning not only when there is actual legal trouble, is that the small business gets the benefit of legal counseling, risk avoidance, contract negotiation and enforcement, and many other things, but at the pace and cost with which they are comfortable. Not only does the business avoid the expense and headache of hiring another employee, but they also have the benefit of that attorney’s entire law firm and legal team, including all of the law firm’s areas of expertise. For example, at ALG, we are trial attorneys and, as such, very comfortable in the courtroom. This means that threats of lawsuits, used offensively or defensively, are that much more valid. It also means that defending the small business in court is simply part of the services offered, something that most General Counsel outsource themselves.

A list of benefits of outside counsel include, but are obviously not limited to:

  • Identifying future risks and determining a plan to navigate those risks;
    • Examples: premises liability concerns, employee/labor law concerns, general liability concerns, insurance concerns, trademark issues, licensing issues, expansion risks, etc.
  • Protecting trade secrets, customers, and employees via non-compete, non-solicitation, and confidentiality agreements;
  • Negotiating, drafting, enforcing, and defending contracts;
  • Drafting, revising, and improving internal policies and procedures;
  • Providing counseling when decision making could benefit from the input of a third-party;
  • Acting as the middleman regarding disputes with vendors, manufacturers, attorneys and other professionals;
  • Managing investigations into accidents and/or other adverse events;
  • Providing legal services, a la carte and at the client’s pace.

Outside counsel are nearly limitless resources. In my experience, a good outside counsel almost becomes like that favorite uncle who comes over and fixes things when there is a problem. A good outside counsel will get to know the company inside and out, will develop relationships with those that run the company, and will be able to protect, improve, and help grow the company, all while providing a bit of peace of mind.

If you have any questions or simply wish to pick my brain, feel free to contact me at any time.

Daniel J. Arnett
223 W. Jackson Blvd., Suite 750
Chicago, Illinois 60606
312-561-5660; Fax: 312-561-5699


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Arnett Law Group, LLC, was founded by Daniel J. Arnett, a trial lawyer with more than 25 years of experience.

The partners and associates at our firm are recognized leaders in their fields and are committed to delivering the best possible result for every client.