Your Business Relationships

www.thelegaldirector.co.uk

A how-to guide from The Legal Director

Providers of part-time Legal Directors with the experience and expertise you need

Identify critical business relationships

Secure those critical business relationships

Reduce business relationship risk

Add value to your business through improved resilience

Every business has critical relationships with its key suppliers, customers, and partners, so…

“Are your critical relationships as contractually secure as they could be? If key individuals fell out, or moved on—or if a partner, supplier, or customer was acquired—would your business be exposed to risk, or incur a disruption to normal trading?”

Find out—and protect your business—before it’s too late to do anything about it.

Read this guide now, then contact The Legal Director for a free initial advisory call with one of our part time Legal Directors.

Call 020 3053 8613 or email ed.simpson@thelegaldirector.co.uk

About the TLD Value Promise

We know — and can demonstrate through client data and case studies — that we can save our clients significant amounts of money and directors’ time.

Please contact us for more information and a personalised illustration of how much money we could save you on your business’s legal bills.

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You’re different, and so are we

In this guide, we outline some of the kinds of critical

business relationship risks that your business may

be exposed to. But we should stress that this is just a

general guide.

Every business is different, and that’s where working

with The Legal Director can really add value. With one

of our part-time Legal Directors working as part of

your business, you’ll not only have highly experienced

legal expertise on hand whenever you need it, but also

continuity—a familiar face, operating as part of your

team.

This is very different to the way a traditional firm of

solicitors or law firm is likely to work with you. They

will typically be far less involved in your business,

operating at a distance, rather than as a member of

your management team. They will also typically be far

less business-savvy, offering advice very much from a

purely legal perspective instead of providing you with

a blend of legal insights coupled with commercial

acumen. Moreover, our part-time Legal Directors are

seasoned—and senior—corporate lawyers.

So the advice we offer on how to protect your critical

business relationships will be drawn from their

extensive experience of the realities of the business

world, combining legal expertise with first-hand

knowledge of how commercial trading relationships

work in practice.

“Protecting your business makes good sense. The advice we offer draws on extensive experience of the realities of the business world, and first-hand knowledge of how commercial trading relationships really work.”

INTRODUCTION

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Businesses trade on their trading

relationships, often built up over years.

But in the absence of a proper contractual

relationship, those trading relationships

are highly dependent on goodwill,

continuity of ownership, and the underlying

personal relationships that exist between

individuals. And in the event of a change

of circumstances, your business could be

exposed to risk.

Suppose a key supplier was acquired by a competitor,

and subsequently stopped supplying your business.

Suppose that a senior sales executive left, taking

major customers with them. Suppose that your

business was highly reliant on specific commodities

or products that were in short supply, leading to

rationing and excessive price rises. Or suppose that

there was a breakdown in the personal relationship

with the owner or senior director of a supplier,

partner, or customer.

In each case, your business could be at risk. Could

it withstand such shocks—and at what cost to sales

revenues, and profits?

Protecting your business makes good sense. That’s

where one of our part time Legal Directors can help

you—and help you now, before a lack of contractual

certainty hurts your business where it can ill afford it,

jeopardising its financial performance and value.

Good business relationships depend on

more than good personal relationships

between business principals. Good

business relationships understand that key

individuals can—and do—move on, and that

personal relationships can—and will—come

under strain at times.

So in the case of critical business relationships—those where a failure of the relationship would expose the business to material risk—it’s important to have firm contractual underpinnings in place.

We work with your commercial teams to identify critical relationships with partners, suppliers, and customers. We help you to recognise which of your business relationships really are critical—because they’re not necessarily the ones with the largest sales value, or largest procurement spend.

We review any existing contracts, making sure that they are properly set up and documented, and that they don’t contain loopholes or potential ‘bear traps’. We’ll examine if they could be terminated by the other party in the event of a change of control, and highlight protective measures—fixed term periods, for instance, or a rolling renewal.

And where such contracts don’t exist, we’ll draft them, building sensitively on the strength of the existing relationship, but moving assuredly to secure its future, irrespective of unforeseen events.

We’ll also make sure that your key employees in terms of your critical business relationships are engaged on appropriate terms that discourage them from walking away, joining your competitors, or setting up in competition themselves.

HOW THE LEGAL DIRECTOR CAN SECURE YOUR CRITICAL RELATIONSHIPS

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“We review existing contracts, making sure that they are properly set up and documented, and where such contracts don’t exist, we’ll draft them—building sensitively on the strength of the existing relationship, but moving assuredly to secure its future.”

Critical business relationships matter

Protecting your critical business relationships makes good sense. And it makes good sense to do it now—before unforeseen events fracture those relationships.

You want to grow and nurture your business, rather than dealing with the consequences of a serious relationship failure. You want to see your business succeed, and not suffer setbacks that could have been avoided.

And you want to secure the value that has built up in your business—so that should it be sold, a due diligence process does not highlight material weakness in its critical relationships with partners, customers, and suppliers.

Working with The Legal Director can help you to fulfil these goals. And to do so in a timely and cost-effective manner.

The Legal Director works with your commercial teams to identify critical relationships with partners, suppliers, and customers. We help you to recognise which of your business relationships really are critical.

At The Legal Director our business lawyers

have many years’ experience of advising

clients from inside their businesses, as

a trusted member of the client’s senior

management team.

To enable us to do this effectively, we make it our business to understand your business and what makes it tick.

When we first engage with you, our first step is to get to know you, your business and its goals. That will include building an understanding of your customers and suppliers and how critical each of these trading partners is to your current and future business success.

We will review all documentation relating to business relationships, how you interact with customers and suppliers, and who you rely upon—internally and externally—to build and maintain positive, healthy and mutually profitable relationships.

Where necessary, we will propose improvements to relevant contracts and methods of doing business, but always with the greatest sensitivity to the importance of each relationship.

Thereafter, we can work alongside your new business development, sales and customer account teams as required, helping them to deal with business relationships and contractual issues confidently and consistently.

We can also work at board level to advise on all strategic issues relating to business relationships.

Whatever the nature or stage of the relationship, we will be on hand to help.

HOW WILL THE LEGAL DIRECTOR WORK WITH YOU

IN REGARD TO YOUR BUSINESS RELATIONSHIPS

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What if difficulties in business relationships have already arisen?

What if adverse action by a partner, customer, or supplier is already giving cause for concern? Although much of the guidance in these pages is in respect of preventing such difficulties from arising, our part-time Legal Directors—as you’d expect—can help with such situations. From re-negotiation to litigation, we can provide expert legal guidance, every step of the way.

Saving you significant amounts of time and money

Importantly, you’ll have ongoing access to a highly experienced and flexible in-house Legal Director — for much less than it would cost to employ that level of resource full-time, or to employ a traditional law firm on an ad-hoc basis.

That will not only give senior executives such as your CEO and CFO consistent support and reassurance, it will give them more time to focus on their core roles.

HOW DOES THE LEGAL DIRECTOR’S ADVICE AND APPROACH DIFFER FROM THAT OF A TRADITIONAL FIRM OF SOLICITORS/LAW FIRM?

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The advice you receive from us, certainly

in legal terms, we would expect to be much

the same as that from a traditional law firm.

However, two things in particular make The

Legal Director stand apart.

Firstly, we give legal advice from a business perspective. All of our lawyers are highly experienced in business, and in the area of business relationships, and all of us have worked in industry. None of our part-time Legal Directors is the equivalent of the junior lawyer that a legal firm might assign to your case—and yet despite this, our fees are in most cases lower. In all instances, our approach is to provide you with a Legal Director—a familiar face around the table, offering legal advice from a solidly business-friendly perspective.

Secondly, The Legal Director is proactive rather than reactive. Our approach to business relationships is to proactively put in place appropriate contractual terms that protect your business before problems arise. Rather than helping you to deal with problems after they have occurred—which is too late—we strive to anticipate potential problems and put in place protective mechanisms ahead of time. And to do so, what’s more, without adversely affecting the nature and calibre of the relationships that have already been built up over time.

A sharper focus on value for your business

Another key difference between The Legal Director and a traditional law firm is that our lawyers only work for a handful of clients at any one time. This allows us to provide a proactive service to our clients and to take the time to understand and focus properly on the client’s business.

A traditional law firm partner will have scores of clients he or she is juggling at any one time. Their business model simply does not support partners getting to know their clients’ businesses, or understanding what is really important to the client’s business.

When a piece of work comes in they allocate it based upon which job they can command the most fees and best margin for, not on the basis of value to the client. Under this system the main bulk of work is routinely pushed down to the most junior (and cheapest) resources, wherever this is possible. These are rarely, if ever, the resources that have the business experience required to deliver true value to the client.

At The Legal Director, our experienced

business lawyers understand successful

business relationships, and understand how

important they are to your business. We

will work with you to secure your critical

business relationships, building on their

existing success, and making sure that an

appropriate contractual platform is in place

for that success to continue into the future.

Having one of our part-time Legal Directors on board, helping you to properly structure your critical business relationships, not only secures the immediate future of those relationships, but also serves to make your business more resilient—and adding value to it as a direct consequence of that very demonstrable added resilience.

In our experience, there are three areas where this added resilience is most evident:

1. Relationship assessment

First, we help your business to establish exactly which of its business relationships are truly critical. These aren’t always those that are most obvious, in terms of revenue or spend.

2. Risk assessment

Second, we help your business to understand the full range of the risks that it faces in terms of critical business relationships. Again, these aren’t necessarily risks that will have been envisaged before.

3. Contractual protection

Third, we help your business to build critical business relationships that are more secure, and more sustainable, by putting in place appropriately-framed contractual provisions. Sensitively constructed, and mindful of the long-standing nature of many existing business relationships, these give your business added resilience and security.

Conclusion

However sound you believe your existing

business relationships to be, it’s a fact that

key individuals can—and do—move on,

and that personal relationships can—and

will—come under strain. Moreover, trading

partners can change ownership, resulting

in an additional source of strain or risk

exposure.

Against such a background, a programme of securing your business’s critical business relationships is obvious good practice. Moreover, the demonstrable added resilience that it imparts to your business adds undoubted value to it—value that far outstrips the investment made in securing your critical business relationships.

The sooner you start securing those critical business relationships, the sooner your business can benefit from that added resilience, and achieve that added value.

Book your free initial advisory call with The Legal Director now.

Call 020 3053 8613 or email ed.simpson@thelegaldirector.co.uk

THE THREE KEY AREAS WHERE WE CAN ADD VALUE

TO YOUR CRITICAL BUSINESS RELATIONSHIPS

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THE LEGAL DIRECTOR 9-POINT FRAMEWORK

A selection of our clientsTribal Group | Burgess Pet Care | Green Rewards | Jack Wills | Jacques Vert GroupMarco Pierre White | eDreams International | Abbey Industrial | The University of HertfordshireReiss | Redux Laboratories | Nordic Dry | Skechers | Split The Bills | Modus Furniture

The Legal Director 107 Cheapside, London EC2V 6DN Tel 020 3053 8613 www.thelegaldirector.co.uk

The Legal Director is a legal consultancy that provides businesses with high-calibre experienced lawyers on a part-time or flexible basis. By working smarter as part of the client’s business, and by delivering legal advice from a business perspective, we can demonstrably save our clients significant amounts of money and directors’ time.*

The Legal Director is the most transparent, cost-effective way of embedding a senior lawyer within your business — at a fraction of the cost of employing a full-time Legal Director or engaging with a traditional law firm on an ad hoc basis.

We match one of our lawyers to your business needs and he/she then performs as a member of your senior management team, just like an in-house lawyer. Moreover, clients can use our unique 9-point legal framework to systematically address key business areas that require legal expertise and appropriate action.

*Please contact us for a personalised illustration of how much we can save you.

ABOUT THE LEGAL DIRECTOR