As business lawyers and litigators we see how business legal problems arise and play out in many varied contexts. We see how business operational issues result in legal disputes, which can then become serious financial problems. In many cases, the risk, expense and valuable management time spent resolving business disputes could have been avoided or significantly reduced by the parties themselves.
Below are some common-sense tips that you can apply to your business and all of your business relationships right now that will help you avoid (or reduce) some of the risks inherit in any business, and that will also help improve your legal position if litigation should arise, and while some of this guidance entails getting good legal advice, most of these strategies do not require legal expense.
Many of these practices will also improve your relationship with your employees, customers and vendors, and the overall quality of your business life. While many of these tips are oriented to business/customer relationships, most apply equally to relationships with vendors, employees and others who are integral to your business.
These tips are not a substitute for and are not intended as legal advice for any specific problem or situation. You need well drafted agreements and forms, and you need to understand and comply with the laws that affect your business. If you need help to draft or interpret a contract, to understand your legal obligations or just to talk out a potential legal problem, you should call us. If a potential claim arises, if you get a “lawyer letter” or are served with a lawsuit, or if a circumstance arises and the magnitude of your potential exposure is in any way material to your business, you should call us.
- > Establishing A Business Culture; Be Nice (until it’s time not to be).
- > Job One = Quality, Quality, Quality.
- > Be Careful What You Promise.
- > Make Dealing With You a Good Experience.
- > Be Responsive, But Set Boundaries.
- > Identify and Solve Problems Early.
- > You Can’t Please Everybody, So Don’t Try..
- > You Can’t Make a Good Deal With a Bad Person.
- > Manage Expectations.
Establishing A Business Culture; Be Nice (until it’s time not to be).
Once in a while you are privileged (and, sadly, surprised) to deal with a business where everyone is pleasant, helpful, polite and responsive. You notice it, right?That culture comes right from the top, is ingrained in the employees at every level, and is usually also applied to dealings within the company as well as with customers and vendors. Being nice, helpful and respectful is not especially difficult, and it’s amazing how much more easily business issues can be avoided or quickly and amicably resolved if you are. Human nature being what it is, people are more reluctant to sue or take a dispute to “the next level” when they actually like the person they are dealing with and feel they have been treated fairly and well.
But…sometimes situations will arise when it is time not to be nice any more. Chances are, most of your employees are not qualified to know when that is, or to know how to handle it when the time comes. They should be trained to let only senior people make that call, because that can be the point of no return in the progression of a problem from minor to major.
Job One = Quality, Quality, Quality.
Nothing is more obvious than that. Your first and most important risk management strategy should be to produce a high quality product or service, and deliver what you promise on time.
Be Careful What You Promise.
Depending on your product, service and customer base, carefully defining what you are promising and delivering in writing is critical. Don’t rely on boilerplate or “standard” specifications or terms. Read them and make sure your product or service will comply, or conform those specs to meet what you are doing. Especially in consumer transactions, failure to meet contractual specifications can be the basis of a consumer fraud complaint.
Make Dealing With You a Good Experience.
In our highly competitive business world, the two most important things you can offer are value and a good experience. Value is a combination of quality, expertise and price. The “experience” is the intangible combination of great communication, courtesy, consideration, competence and efficiency that the customer experiences in the delivery of your product or service. Implement a business culture the priorities of which are to make the customer feel valued and make the experience pleasant and satisfying. Remember: you don’t just want their money for this project; you also want their repeat business and their referrals. Most of us survive on repeat business and referrals.
Speed Kills…in business, just as on the highway. Many stupid business mistakes are unforced errors caused by impatience and maybe a misguided sense of urgency…that feeling that you need to close the deal quickly. Maybe the other side is pressuring you, threatening to take the deal off the table. Maybe you think someone else is snooping around and might get the deal. Slow down a little. Evaluate thoroughly and do your due diligence. Only pull the trigger when you are comfortable.
Be Responsive, But Set Boundaries.
Responsiveness and communication (or lack of it) is always a major factor in making a business transaction successful, and very often is a major factor in either solving or exacerbating disputes. Being responsive doesn’t mean you cannot set boundaries and reasonable customer expectations – and you should. Establish early on how best to communicate with one another throughout the relationship, and when. Let others know how best to communicate with your organization, with whom they should communicate about particular matters, and when. Introduce them to the people with whom they will be working most and describe their roles in the process. Return phone calls and respond to emails promptly (but with caution in both tone and content).
Identify and Solve Problems Early.
Whatever the area of your business, be alert to signs of misunderstandings or discontent. Don’t ignore them. Act swiftly and decisively to address them. They probably won’t go away on their own.
You Can’t Please Everybody, So Don’t Try..
Identify problem customers early. All of us occasionally face the customer whose expectations are impossible to meet or whose approach to conducting business conflicts with our own business culture. They want more than they are willing to pay for. They always demand immediate satisfaction and attention even when the matter is not truly urgent. They consume inordinate amounts of your time and that of your staff. The negotiation never ends. Or, they are just downright unpleasant. These are not just people who rightfully expect quality and good service for their money; they are your worst nightmare. You cannot and will not change who they are. You are not a contortionist, and you can’t allow nuts to hijack your organization. Run — don’t walk — before it’s too late.
You Can’t Make a Good Deal With a Bad Person.
I don’t care what the contract says, don’t do business with someone you distrust. Ever. That doesn’t mean you don’t need contracts with people you feel are trustworthy; you do. But all the fancy words a lawyer can conjure to write in your contract will do little more than buy you a solid (but expensive) legal claim or defense when a disreputable or unethical person shows you his stripes.
This requires communication and may take time, especially if you are delivering a complex product or service. But, it is essential not only that you understand (and can meet) the customer’s expectations, but that those expectations are realistic in light of time constraints, budget and other relevant factors.
Unrealistic expectations and misunderstandings about cost, quality or other aspects of the desired outcome are a huge source of disputes. Use caution in “overselling”; it may get you the contract, but you may pay for it five-fold in other ways. Educate the customer and manage their expectations. A successful outcome depends on mutual satisfaction with the deal and the outcome.