Equity Club
Issue No. 62 - December/January 2011
How to save on legal fees
by Gerry Cawson
If you are a cash strapped entrepreneur you quite rightly count every cent you have. Juggling limited cash resources between competing priorities when you launch a new business - or expand a business into a new market - is a fact of life.
Spending money on legal advice can therefore seem like an unnecessary expense.
However, a dollar on legal advice today may save you a fortune in the future. By getting the correct advice early you can set up processes that give investors confidence to put the highest value on your company and help you avoid typical legal issues that drain your time and money.
Early advice in the areas of intellectual property, employment terms, contractual arrangements and shareholder agreements should give you a path to follow that maximises the likelihood of boosting an investor’s confidence in your business.
The best news is that there may be grants available to you to fund that advice.
Intellectual Property – most businesses have some elements of protectable IP. To maximise the value an investor will put on your company you need to demonstrate that your company owns the IP you see as critical in the business. The best way to do this is to have all those involved in the development of the IP to formally assign to the company any rights they have in that IP. While the law would ordinarily suggest that IP developed by an employee belongs to the company that employs them, this isn’t the case for contractors who, in the absence of an agreement otherwise, are taken to own the IP they generate.
Employment agreements - Employment agreements provide a great place to include provisions that address the IP ownership issue referred to above, and protect against risks arising from IP disputes with employees.
In addition, having your template employment agreements reviewed by a lawyer can also help you avoid breaches of the Fair Work Act in your dealings with employees, which can give rise to penaltie...
