BUSINESS LEGAL AUDIT
The Robinson Law Group, PLLC Legal Audit was developed to help small businesses evaluate their legal health, risk, and litigation vulnerability. This comprehensive audit/check list covers the most relevant areas of a business and alerts the business owner of areas that need to be addressed, improved and, most importantly, steps that should be taken to ensure legal protection. This is an invaluable process that keeps businesses strong, focused, and protected – to ensure they are poised for growth.
Goal and Benefit of the Legal Audit
In addition to helping you mitigate your risk, our goal in a legal audit is to find areas of value where strategic thinking can make your company more valuable.
That said, the legal audit is designed to help your company focus on its bottom line and important business goals. Not only can future legal problems and costs be eliminated, but audits can also reveal unknown business opportunities such as capital allocation, areas for expansion, and even tax-friendly business structures.
The goal of an audit is to change things for the better and we can help you.
Business Legal Audit Scope
While the scope of a legal review depends upon the type and size of the business, a basic legal audit would include the following:
Review your form customer and vendor documents and customized documents. Evaluate the adequacy of the documents to protect your legal interests. Assess the validity and usefulness of limitation of liability, no consequential damages, IP ownership, arbitration/mediation clauses, no-suit, and other clauses; advise on new clauses in light of evolving company needs and the law. Analyze how the company handles contract non-compliance. Check loan and debt compliance covenants. Review bidding systems and contract compliance systems.
Review your intellectual property (“IP”) assets- copyrights, trademarks, trade secrets (e.g., customer lists), and proprietary information to determine if your IP is optimally supporting your goals. Ensure that you have adequate legal title to your IP. Review the company’s processes to create, capture, use, and protect IP. Address offensive and defensive considerations. Create guidelines and systems to create, capture, use, and protect IP. Review infringement monitoring and reporting practices. Determine if key employees sign enforceable non-competition agreements. Assess if your contractors pass title to their inventions and work product to the company.
Check that you are holding shareholders’ and directors’ meetings and prepare minutes. Is the company complying with these minutes? Review that officers are acting in accordance with their authority. Examine whether documents are being properly retained. Review Buy-Sell Agreements. Evaluate whether the contingencies in the Buy-Sell Agreement are still appropriate due to changes in circumstances. Assess if all stock has been properly issued. Review ownership documentation for subsidiaries.
Review company methods to classify employees and independent contractors. Examine employment policies regarding federal and state discrimination on the basis of race, religion, national origin, age, sex, sexual orientation, pregnancy, and disability. Review hiring and firing policies. Assess hiring and firing documents including employment applications. Evaluate employee handbooks. Determine if key employees are signing enforceable non-competition agreements.
The law touches many areas of your business; it is an unavoidable reality of today’s society. Let us help you efficiently and economically navigate those waters well in advance of an exit strategy or a serious crisis.