But that ain’t necessarily so. But for smart businesses, “the law becomes a very powerful tool, because it’s simply an input into your business.” The trick is to involve lawyers early on. One example is to have the lawyers draft contracts with incentive clauses so payments only are made when goals are met. That tends to cut down on failure to live up to the deal. This is trickier with new business relationships since there is no reservoir of good will to rely on. When you start from scratch you really need the law and lawyers because if you make a mistake it’s harder to resolve and you end up paying through the nose to get it solved.
Here’s how to use the law to your advantage:
I. Lawyers are good at spotting risks and figuring out how to reduce them;
II. If you get the lawyer involved early on to help structure the transaction you can add value by reducing collateral expenses; and
III. Lawyers can help businesses understand their property rights, including intellectual property, to protect themselves from unfair competition.
Finally, it’s worth noting that good project management techniques can help reduce legal costs (or at least make them more predictable).