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Consultancy businesses face challenges at every growing stage of their lifespan. They are prone to litigation at every turn as the regulatory environment increasingly becomes complex. No one can entirely predict when a problem necessitating litigation might arise. That is why any serious business must make sure that their compliance plans adhere to nationally recognized standards and practices.
As the business industry grows, understandably they often turn to consultants for expert advice in dealing with legal issues. While that is commendable, those very consultants create potential problems of their in respect to government regulations and practices. There have been plenty of legal mistakes made by consultancy firms, with most being avoidable. There are numerous ways on how a consultancy firm can protect itself from litigation.
The first step is the most obvious; make sure the company complies with the necessary regulations and policy standards available. Businesses should have a compliance department is adequately trained to investigate and handle competently issues pertaining compliance requirements. Unfortunately, compliance requirements have not been fully standardized which leaves businesses to grapple with regulatory vagueness. But regardless of this, ensure that compliance plans are monitored and regularly updated to conform to the changing rules.
Every consultancy company should have a standard contract when dealing with its clients. There is no set standard way of writing a contract. Most companies have contracts that have been customized to suit their needs. The most important step for any consultancy company is to make sure they have a contract that passes the scrutiny from an experienced lawyer. The contract should be detailed, clearly spelling out terms of engagement including prices, when they are due, penalties and interest rates owed if payment is not done as agreed. Include clauses that cover liabilities or those that mitigate you from a breach in the occurrence of such events. Always have a clause that clearly stipulates how disputes will be solved.
Most consultancy firms are in the business of providing services to their clients which pave the way for long-term working relationships. It is, therefore, mandatory for them to have good terms of an agreement that outlines the conditions of engagement between the company and the client.
In an ill-advised effort to save on expenses, businesses often tend to hire inexperienced legal counsel or lawyers who are friends or relatives who will offer them a discounted fee instead of spending the money necessary to hire competent lawyers. In doing so, consultancy companies deny themselves the advice of experienced legal counsel who can help them in avoiding future legal problems.
Finally, consultancy firms should be aware of their jurisdiction and the laws applicable to search companies. These rules differ from one state to another, and they form the basis of an agreement with clients or negotiation with the arbitrators. Businesses should constantly keep updating their database with regards to legal issues to avoid being caught on the wrong side of the law unknowingly. By learning how consultancies can protect themselves from litigation, you can avoid falling victim to sue-happy individuals.