Mar 7, 2016

Enterprenuership and the Law by Kayode Omosehin

Credits -

Nigeria is the next great investment destination of Africa. Entrepreneurship will no doubt be the drive of the economy of the continent. Entrepreneurs are known for surviving in almost uncertain ventures and can forge on against all odds. But forging on with caution in legal matters will be sound wisdom in commerce. With many Nigerian entrepreneurs now new to building a business, the need for legal advice becomes imperative and should therefore form part of any curriculum in entrepreneurship training.
Entrepreneurs need lawyers to grow their business with less troubles from regulators and competitors. Information technology has deluded so many into joining the band wagon of "wetin lawyers dey do sef" (meaning "what do lawyers even do to make them indispensable"). Some people are searching Google to get templates on contracts and almost every other thing about their business. The consequences of such approach can be very grave! I have listened to many clients, local and foreign, brooding over regulatory sanctions imposed on their business, how sad it is to them that they are getting sued by competitors for everything, how much issues they have to deal with in terms of their copyright, product liability etc. These are known attributes of a business which disregards the use of legal advice.

Appreciating the need for legal advice and how to put it to effective use forms part of the skills of an entrepreneur. A foreign investor wisely paid about $20k for a legal fee to review a two-page agreement. Apart from typographical correction and rearrangement of the contents, the lawyer only added few words. The same decision may be looked upon by other businessmen as being profligate. Four years after, the business relationship went sour between the partners. Interestingly, those few words added by the lawyers have now saved the investor an embarrassing lawsuit of $2.5billion.

There are a host of start-ups towing the "do-it-yourself" alternatives instead of seeking standard legal advice. They are carried away with the impression that technology has some sort of omnipotence to solve even the legal matters in business. That cannot be. Whilst Google and other search engines can provide hints and templates for contract drafting, it cannot do so in a way that guarantees less troubles for the business. Legal service may be cheap or expensive but can be your only surest way out of some soul-crushing mistakes that can mar your business career.

Focusing on legal issues early in business is key and is especially helpful to entrepreneurs on diverse issues such as founders agreements, tax management, intellectual property, employee contracts and handbook and other regulatory issues. If you fail to hire a lawyer at the beginning of a business, you may have to do so sooner or later, sometimes at a greater cost. A business man once said "if you end up in a lawsuit, then you are in the business of managing a lawsuit." A word is enough for a businessman!

Kayode Omosehin Esq.
Lagos, Nigeria
Editor's note: this article was originally posted on on 1st March, 2016.