When Does Your Business Need to Bring in a Corporate Law Firm?

The law has something to say about pretty much all aspects of the way a modern business is run.

From employee relations and intellectual property to due diligence and regulatory compliance, the legal system has expectations, limits and rules.

As such, it’s often advisable to bring in outside help in the shape of a corporate law firm to help with the aspects of the law that touch on your business.

Indeed, it’s wise to think of a corporate lawyer not as an outsider, but rather as a strategic partner, someone you can call on to guide you when you inevitably run into thorny legal issues.

Below, we examine some of the times you will want to use a corporate law firm.

Capital Raising

One of the main reasons you will want to seek outside legal counsel as a business is when you’re trying to raise capital.

Issuing simple debt instruments or taking out a bank loan can often be done by an in-house team, but if you want to raise fresh funds by issuing equity or some complicated debt instrument, you will likely need to call on a corporate law firm.

In general, you will need to bring in a corporate lawyer if your capital raising involves:

• Equity financing, i.e. share issues.
• Venture capital investment
• Debt in the form of convertible loan notes
• A joint venture
• Issuing shares and equity to family and friends

Due Diligence

Partnering with another business or buying another lock, stock and barrel can be a lengthy and arduous process.

Due diligence is integral to any such deal, and you need a team of lawyers to help to perform a forensic analysis of any company or entity you want to buy or partner with, so there aren’t nasty surprises once the deal has gone through.

A good corporate lawyer will perform the following during the due diligence process:

• Check all company records at Companies House
• Vet existing contracts and liabilities
• Understand any ongoing disputes or claims
• Check all employment contracts and TUPE risks
• Check all intellectual property ownership
• Ensure regulatory compliance

Contracts

You can leave some everyday contracts, such as those you draw up with your employees and some small-scale suppliers, to in-house legal teams, but for high-value, long-term, and strategic contracts, you will need outside help.

That means that when negotiating major commercial contracts – with suppliers, distributors, licensing, and joint ventures, for example – you need to think about using a corporate lawyer to draft the contracts to get the wording right.  

A corporate lawyer will:

• Draft agreements and contracts tailored to your business needs
• Ensure that all necessary clauses – payment terms, obligations, deadlines, IP rights, warranties – are included
• Make sure that contracts are balanced so that risk allocation is equitable between the two contracting parties

Regulation

A corporate lawyer plays a vital role in ensuring your business doesn’t breach any of the laws, regulations and rules set by manifold regulatory bodies.

 In the UK, this means a lawyer must be able to negotiate the rules and regulations set down by the following bodies:

• Financial services
• Competition
• Data protection
• Environment Agency
• Health & Safety Executive (HSE)
• Ofcom 
• HMRC
• Local authorities

A good corporate lawyer will ensure you adhere to the law by:

• Drafting policies, procedures, and agreements to comply with the law.
• Providing guidance when it comes to licensing, permits, and approvals.
• Ensuring you comply with all employment, health and safety, environmental, and financial regulations.

Conclusion

A corporate lawyer is priceless for a business.  

In fact, it’s a backstop most businesses can’t do without, especially as it grows and its operations become more complicated.

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