5 Partnership Considerations to Consider

There are times when it’s best to go solo and others when you need a team effort to survive. When you’re part of a team, you need to know how to be a good team player, since a team works best when each of the players plays to his strength and complements the strengths of his teammates. When it comes to business partnerships, you’re on a sticky wicket because there are huge sums of money and large amounts of efforts involved. In order to establish a partnership that stands the test of time, you need to consider the following aspects:

  • The best partners complement each other: The most compatible partners are those who have the same goal and different strengths and expertise in various areas that are needed to achieve the goal. It’s important that your vision for the company be the same – if one person wants to run your organization as a social enterprise while the other wants to rake in the profits, you’re going to be pulling one horse in two different directions.
  • Clear cut responsibilities help avoid the blame game: A partnership in which clear cut responsibilities are defined help pinpoint the blame when something does go wrong instead of each blaming the other for the fiasco. It also paves the way for proactive measures to be taken so that the problem can be rectified.
  • Money matters destroy even the strongest of friendships: If you’re going into partnership with a friend or a relative, be warned that money is stronger than blood or friendship. If the partnership does not survive, then you can expect your personal relationship to be strained and affected too, unless both of you are really mature and are able to separate the business aspect of your relationship from the personal side.
  • It’s best to have a written agreement and an exit strategy: Even the best of friends can turn into the worst of enemies, so don’t depend on mere words, even though they were spoken in good faith, to keep your partnership secure. Draw up a written agreement that delineates each of your responsibilities, profit sharing arrangements, and how your assets will be split in case you decide to call it quits.
  • Limiting the amount of liability helps in times of trouble: A limited partnership helps you safeguard yourself in case your partner uses your common business to promise things that he or she is not allowed to. It limits your liability in the damage suit that may follow.

ContractStore has several documents to help you set up a solid basis for your partnership, including
A148 Partnership Agreement
A107 Shareholders Agreement.
A complete range of partnership documents is available at http://www.contractstore.com/partnership-and-shareholder-agreements

You can read here a case study about ContractStore customer Luke Hutchison of Southern Solar, who set up his business partnership using one of our documents.

ContractStore helps get new business off to a Flying Start

Flying Tots Childcare ServiceOne of our recent customers contacted us for help while creating a bespoke childcare company, Flying Tots Ltd, predominantly to care for the children of airline staff. After carefully researching crew and pilots’ needs over the past year, Sharon Bastien found that airline staff lose out on work due to a lack of childcare. Sharon also discovered that because airline crew work ‘irregular hours’ from day-to-day, they could not be accommodated by most agencies.

So the enterprising Ms Bastien designed a unique company, employing professional, flexible nannies to care for children of airline staff. The company will also serve high-flying career professionals whose work demands ‘out of the norm’ or long hours. Clients use the service on an ‘ad hoc’ basis, as and when needed. The considerable press coverage on the business has been very positive and has generated many enquiries.

Sharon got in touch to share her story about how ContractStore has helped her get the business off the ground:

“I found ContractStore’s website in 2008 and I used it to prepare two contracts, one for the clients who required a nanny, and one for the nannies I employ.  I did not anticipate that these contracts would require so many clauses and details, of which I was not even aware. However,  I was able to obtain two excellent contracts, perfect for the job that meets all the legal obligations and were great value.

Flying Tots ChildCare Service for high flyers“I am very passionate about excellent customer service inside and outside my business.  I felt I was always receiving  undivided attention – excellent customer service in fact. Our business relationship has grown and I can recommend anyone to use ContractStore .”
 
“The specialist services we provide are for working parents, whose job requires them to work a shift pattern. These are parents are experiencing great difficulty with finding childcare when having to attend work, for long periods at a time. Flying Tots, now with the introduction of our service to high career workers and business professionals ‘takes off’ to a flying start.”

Visit the Flying Tots website:www.flyingtots.co.uk

OneIS Happy

oneis.co.uk

oneis.co.uk

Jennifer Smith, co-founder of OneIS (www.oneis.co.uk) contacted ContractStore after hearing about us in Delia Venables’ Internet Newsletter for Lawyers.

OneIS provides a secure, online space for small organisations to store and share all their information. In effect it’s like having an intranet or shared network, without the expense and IT hassle of running your own servers. Clients pay a monthly subscription to store their documents and other information in the application, hosted securely by OneIS.

Jennifer sought a contract giving the terms of service for providing the hosted information management system.

Jennifer and Ben from OneISThis type of hosted service is becoming increasingly popular, so we were happy to hear from Jennifer and produce a template contract for the catalogue.

Jennifer, who describes herself as being “obsessed with efficiency and improving business through better information management”, told us:

“We needed terms of service for OneIS but I didn’t want to spend the £850+ I was quoted by traditional law firms. So I approached Giles at Contract Store who sorted us out very promptly and professionally for a fraction of the price being quoted by others.

“I’m so pleased to have found your service. I thought getting our terms written would be a horribly lengthy and expensive process, but it has been really quick and easy.

“I have been recommending ContractStore to other startup companies – all of whom would benefit from the cost-effective, no hassle legal services you provide.”

How to Handle Your Lawyer

Negotiate successful deals by making sure the legal aspects are right

As a former City lawyer I would like to see a shake-up in some legal industry charging systems and I would like to offer you some useful tips on how to get the most out of your lawyer.

This follows a number of recently published reports detailing insensitive legal fees hikes, adding to the burden faced by ‘Credit Crunch’ hit businesses.

Recent research into UK firms, undertaken by my business ContractStore.com, shows that approximately 1 in 3 businesses ‘make up’ their own legal contracts.

Most of the recent criticism of legal fees has come from larger companies who use city law firms where the charging rates of a partner can be as high as £700 an hour. If the bigger clients are suffering, it is that much worse for smaller businesses, especially start-ups.  

Many small firms are simply out-priced by the fees charged by lawyers; preparing a simple contract involves using a precedent and is hardly rocket science, but we had one customer recently who had been quoted £7,000 for two sets of terms and conditions for a start-up business by a small firm of solicitors in the country.This situation is ludicrous! 

Businesses need the protection of properly drafted contracts and while most lawyers have a fairer charging system than this example, it is important to price work that takes into account the client’s ability to pay. Give a low cost service to a new business and it could be a client for the next 20 years.

The legal profession need to “get real” with their charging structures.  As a recent report pointed out, hourly charges do not necessarily make for an efficient billing system – associates in law firms are under pressure to bill as many hours as possible and there is always a risk of them putting down too much time, especially when there is less work around for those affected by the coming recession.

Given the sophisticated billing systems used by many firms, it should be quite easy to work out a fixed fee for most routine transactions. And for long-running matters where a team is involved over several weeks, it is questionable whether fees shoyuld be charged on an hourly basis.

Clients need to do their bit to keep fees within reasonable limits. After all, there is nothing to stop them shopping around for a better deal and to organise the work so they do not give their lawyers tasks that they could do in-house – e.g. on a due diligence exercise when buying a company.

How to get the most out of your lawyer

When approaching a law firm for a quote, you need to find out who will be doing the work: the bigger the firm, the more lawyers that are likely to be put on the team and with increasing specialization, this can involve a lot of duplication and overlapping of effort.

The smaller the firm, the smaller the team is a rough rule of thumb. In other words, a 20 partner practice is likely to be more cost effective than one of the law factories and you will also get more partner involvement, especially with a smaller assistant-partner ratio.

Large practices have a lot to offer on mega projects but when it comes to more run-of the mill matters, with three or four lawyers all reading the same documents, more than one clock is ticking and the costs mount up very fast.

Tips for how to handle your lawyer include:

*  Select a firm that handles the type of work you want
*  Be very clear on what you want from your lawyers – write a brief and put together the relevant papers in a sensible order – don’t give them a box of files and then complain if it takes your solicitor a week to review everything
*  If you want a contract drafted, do some preliminary work – websites like ContractStore.com offer free checklists and low cost templates: it will be cheaper to have a lawyer tweak a template provided by the client  than draft a contract from scratch (even though the lawyer will be using her own template)
*  Find out how the work is to be handled – the number and skills of lawyers concerned
*  Get a firm price and timetable: a fixed fee can be safer than hourly rates or else get a maximum limit on the hourly charges
*  Don’t feel intimidated by the surroundings – solicitors negotiate just like other trades.

Giles set up ContractStore.com to assist businesses to put legally binding, professionally-drafted contracts in place for a fraction of the cost that law firms normally charge.

Giles Dixon
Managing Director
www.contractstore.com