Top 5 Tips to Avoid Legal Mistakes During an Economic Downturn
Vanderpool, Frostick & Nishanian Outline Common Business Missteps in a Poor Economy
Many companies suffer financially when in an economic downturn, and don’t realize the legal missteps that can befall them, affecting their bottom-line even more. Vanderpool, Frostick & Nishanian suggests five tips that can help businesses avoid the top five common legal mistakes that businesses make during an economic downturn.
Many times companies are so caught up in the financial woes of their company, with employee-downsizing, restructuring and number-crunching, that they overlook the legal ramifications that can negatively impact the companies’ financial situation.
The top five tips to avoid the five common legal mistakes during an economic downturn include:
- Protect company business information prior to an employee’s termination – Many companies fail to proactively have employees sign agreements that protect their business information before a termination situation arises. It’s much more difficult to have employee’s agree to these terms upon termination.
- Have employees sign non-compete agreements – Again, companies fail to have adequate non-compete agreements signed by their employees. They compromise their own company’s livelihood by not securing proper documentation.
- Monitor company mortgage and account agreements – Companies can overlook the “fine print” in many account agreements, and therefore don’t foresee changes in account activity, putting themselves in a vulnerable situation when interest rates fluctuate or account terms change.
- Collect payment from vendors regularly and timely – Companies can wait too long before filing suit to collect money from vendors, making it difficult to recoup monies owed to them. This can be a costly mistake, and easily remedied by managing past due account.
- Keep track of loan agreements – Businesses should take time to review and manage loan agreements with their lending facility.
Lastly, businesses and corporations should not overlook the need to secure proper legal counsel before a financial crisis hits. Many times, companies will seek legal help, after the damage has been done, rather than taking the proper steps prior to bad economic times.
This entry was posted on Wednesday, July 21st, 2010 at 11:10 am and is filed under Law. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.