I know that January can be grey and, honestly, depressing after the joy and fun that Christmas brings but it’s important to utilise the optimism of a new year and look ahead and make plans.
In December, the Thrings Swindon office was beautifully be-decked with tinsel, baubles and lights, we had a very festive time, but with the decorations now back in their boxes for another year, I’ve turned my attention to my plans for 2026, both in business and at home, as I am sure you will have done so too.
One of my intentions for this year is to engage with LinkedIn more consistently, I’ve found it hard to post regularly but I do value the connections that I’ve made and sustained through it. If you feel the same, please do join me on there and share your New Year’s business resolutions with me.
I’ve noticed that some of my clients are also taking the opportunity to make plans for the coming year too. Twice in the past month I’ve been asked to carry out a full legal ‘health check’ of a client’s business. This one of my favourite things to do as it gives me a great opportunity to spend time understanding my client’s business from lot of different angles.
During this process we review all the important legal aspects of a business (such as employing people, contracts with customers and suppliers, intellectual property (such as trade marks and copyright), real estate, data protection and debt recovery) and identify key areas of risk and ways to reduce them.
I know this sounds fairly dull without a bit more context, so just imagine you’re a £10m turnover software business. You founded the business yourself and, rather than take funding or investment from others, you funded it yourself. You didn’t have the cash to pay for lawyers, so you found some legal documents on the internet and used them when you needed to take on some contractors, when you employed your first employee and when you started to sell your software product to customers.
There’s absolutely no shame in that, whilst I’d never recommend ‘borrowing’ a document you’ve found on the internet, it’s what needed to be done to get up and running in the first place.
It’s now 2028, you now want to sell your business and have buyers lined up. During the sale process, their lawyers discover that:
– You don’t own the intellectual property in the software that was developed by your contractors, because the contract they signed was the two-pager you found on the internet.
– Your customer licence agreements have a major flaw in them in that they have not capped your liability for any defects in the software which your buyer views as a significant risk.
– Your employment contracts don’t contain enforceable restrictive covenants in relation to your now key members of the team, without whom you would be really stuck.
Because of the risk that these three issues represent to the business, your buyer pulls out of the deal.
Pretty depressing, right? And entirely possible. These kinds of issues can cause deals to fall over or, at the very least, gives the buyer a reason to renegotiate the deal and reduce the purchase price.
But, for a brighter outlook, imagine that in January 2026 you contacted your lawyer (feel free to drop me a line if you think I can help) and asked them to carry out a legal health check of your business.
They spotted some issues with your contractor agreement and organised an IPR assignment document that you were able to get your contractors to sign. They also noticed that your customer licence agreements needed some considerable amendment, which they did, and finally they spotted that key employees needed some robust restrictive covenants in their employment contracts and these were introduced alongside an employee share option incentive plan, so everyone was happy with the changes.
Your sale then goes ahead in 2028 with no issues!
So, my question to you is, should one of your New Year’s business resolutions be to take a look at some of those legacy legal documents and processes and identify areas which could be improved? Even if you have no intention of selling your business, all of the issues I’ve mentioned in the example should be dealt with in order to protect its future.
After all, January is a great time to make plans…
