In one sense, a small company really is just like a larger company – only scaled down. Most of the fundamentals of running a large company apply to a small one – you still need to organise stock, engage with marketing, advertise, and build a customer base. But then, nobody would ever say that the day-to-day running of a small company like, a single shop or an online business, is anything like the work undertaken by the CEOs and various departments of multi-nationals. The key difference then might not lie in the things you have to do, but in who is doing them. The biggest difference between a small company and a larger one is therefore that, if you are the head of a small business enterprise, chances are you’re doing multiple things at once. Or in other words, you do not have the staff numbers to delegate every individual responsibility to a particular person, let alone a department.

This poses quite a large problem, and is probably one of the reasons why many small companies fail or never achieve the growth necessary to move forward or expand in any meaningful sense. The reason this is such a problem is that one single person – you – is very rarely going to be even competent (let alone qualified) to fill all the roles that a company needs. But what can you do? The only real answer to this is that you do the best you can – and seek professional help wherever it is necessary.

The Legal Side

One area of business that takes a particular sort of expertise to execute properly is the legal department. Every business bigger than the very smallest requires a legal department, but if you are still at that “very smallest” stage, it might be something you have to handle yourself. Luckily, there is advice out there and there have been many who have gone before you in the precise same position and succeeded. No, you do not need a law degree; however, it is very wise to enlist the help of people with law degrees to keep everything above board where the law of the land is concerned.

There are several legal bases that need to be covered even in the case of small businesses. For example, you need to make sure that tax is in order (with many small companies, the financial and legal duties heavily overlap) and if you process customer and staff data in any way, then GDPR compliance consultants may need to be brought in as well.

And this is only for the very smallest businesses of the kind described above. Many businesses that are a little bigger yet are still considered “small” companies will require a more bespoke and fleshed out legal department. In such cases you may require the advice of a lawyer to oversee the whole thing. It is probably still a little outside of a small company’s capabilities to employ a team of lawyers full time as a professional legal department, but their advice at this crucial stage will also prove invaluable.

Setting Up You First Legal Department

So how do you go about it? Well, as mentioned, this is well-trodden ground. In the US, for example, it is estimated that only 20% of business fail within the first year, with that number only creeping into the majority for failure after five years. That means the first steps towards setting up a legal department are steps that have been taken many times before. After all, there are a lot more small businesses out there than large ones, right?

So the best course of action is to follow their example. Things will become more complicated later on with the requirements becoming less general and more specific to each company’s individual needs. But at this stage things are general, and that means you have a healthy precedent to follow. And when things get more complicated, that means thigs are going well! Here are the steps that will get you started.

Due Diligence First 

That double-D term that you have probably heard a million times represents the cornerstone of good business advice. It is always advisable to begin by looking at your situation and taking an accurate measure of your company. What is its specific corporate culture? What legal issues could you potentially face, and which ones do not really apply? For example, it is pretty unlikely that anyone will ever sue you for defamation if you run a cake shop, but that might well become an issue if you are publishing a magazine. Bring in an accountant to make sure you are paying the right taxes, and if you are dealing with data, get in the GDPR consultant as well. The first stage is always a matter of covering the most obvious bases.

Define Your Expectations and Limitations

Following this stage properly is a matter of clear and frank communication with everybody who will be affected by any legal decision. This might, depending on how small your business is, be a frank and honest discussion with yourself. There will always be expenditures involved in setting up your legal department and this many have an impact on wages, salaries and, unfortunately, profits. You need to have a clear idea of what you hope to achieve and how much this is going to cost. You may also have to accept some limitations if a certain type of legal service – e.g., litigation – is just not going to be an option for you at this stage of your company’s growth. Everyone involved needs to know.

Consider Useful Technologies

As with admin, so with the legal department: the myriad new organisational technologies that make running a company easier are your friend where setting up the legal department is concerned. Be sure to research what technologies are out there and how they can make your job a whole lot easier. Remember, at this stage staff will be pretty thin on the ground, so where a computer can potentially pick up the slack, make sure that it does.

For small companies with one-man legal teams, these are undoubtedly the most important general steps for getting started. Other steps you may need to take will be specific to your company and the legal jurisdiction within which it operates, but by making sure these bases are covered, you are already off to a great start.

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