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All the Questions to Ask Your General Counsel Right Now
Decisions made during a crisis can have legal consequences down the road
Leaders are often faced with in-the-moment decisions armed only with imperfect information and limited experience to predict the consequences of their decisions. These decisions are difficult during good times, and feel near impossible during uncertain times. We are all eager to make the decisions necessary to return to some sense of normalcy. However, the consequences of the decisions we make as we seek out this new normal will reveal legal liabilities for companies of all sizes.
As cities lift their shelter-in-place policies and businesses strategize how to reopen, now is a prudent time for leaders to create a proactive game plan with their lawyer or general counsel to avoid legal mishaps in the future. While there isn’t a roadmap or proven plan for a Covid-19 business world, there are some basic principles you can adopt while navigating an uncharted path. These are the same principles we turned to when launching our company last year and will continue to turn to during uncertain times: focus on the fundamentals, avoid easy-to-miss foot faults, and always understand your fiduciary responsibilities.
Focus on the fundamentals
Any business has to do a few basic things to survive: build a product that people want, figure out how to attract the resources (human, financial, etc.) necessary to develop and bring that product to market, and generate revenue and profits so the business is self-sustaining. In doing these things, you set up expectations (some explicit, others less so) for your stakeholders. There are several actions you can take during a crisis to continue proving that your business is functioning while also working with your lawyer to avoid any legal pitfalls.
As a starting point, you need to know your real runway. Create a runway model that assumes your demand and retention is reduced by some percentage and that anticipated funding won’t come in when you expect it to. The percentage will depend on your business. Most companies may choose 30%–50%. (If you’re in an industry like hospitality, that is largely on pause due to shelter-in-place restrictions, you may choose a higher number.)…
