Legal & Regulatory Risks

Lawyers get paid the big bucks to keep you out of trouble. So do other specialists, if you happen to be in a heavily regulated industry like pharmaceuticals or air travel.

The list of possible problems with legal or regulatory roots is almost endless: tax complications stemming from your choice of legal entity or state of incorporation; disputes arising from poorly structured agreements; lawsuits filed by a competitor alleging misappropriation of trade secrets by one of the hotshot programmers you recently recruited from them.

The first step towards mitigating legal and regulatory risk is to learn enough about the subject so that you can fully appreciate what you don't know.  

The second step is to retain the right attorneys – usually, one for corporate matters and another for intellectual property matters. You must manage them effectively and follow their counsel when it makes sense (many legal decisions come with degrees of risk and reward that you need to balance). Finally, you must keep your attorneys informed of what's happening in the business so that they can address potential problems before they get out of control.