Starting a business can entail an extensive net of heavy weighing legal and financial considerations, not to mention the array of management decisions and marketing worries. This month Lawyer Monthly hears from Neil Williamson, Founder and Director of EM Law, on how his firm helps small enterprise businesses confront the pit of complexities they are expected to overcome in order to successfully emerge as a confident, growing and profitable business.
How did your legal career path lead to specialising in commercial law surrounding small businesses?
I specialise in two areas: commercial law for small businesses and commercial law for businesses operating in emerging and frontier markets.
I trained at a large firm in the North West but I wanted to get to London as soon as I qualified in 2001. I intended to be a litigator but was persuaded to meet the senior partner of a firm in Hampstead who needed an assistant to work on corporate deals. Although the firm was small it was punching well above its weight in terms of the size of the transactions that it was involved in and they were super keen to take me. I thought joining the firm would accelerate my career because of the exposure I would get and I thought it would be good to get more corporate experience anyway if I went back into litigation.
I was thrown in at the deep end and had a lot of responsibility. For example, at 1 year PQE my boss went on holiday and I was left to handle the final two weeks of a £190 million acquisition, which involved following the “whitewash” procedure. Most of the time we had city firms on the other side of the table. On the whole I was doing deal after deal – mainly buying and selling private companies - but as part of firm with a corporate team of just me and the senior partner I also had to handle a wide range of commercial work and often this was from small business.
When I left the firm, some of the smaller clients followed me and I went out of my way to support them because of the loyalty they showed me. It meant that I was working with entrepreneurs from an early stage in my career. As I continued to work in smaller firms, my clients tended to be smaller businesses and I carried on covering a wide range of work. The one exception was my last firm, where, although we did act for a few small businesses, on the whole I was helping large clients operate overseas.
As the Founder of E M Law, what are the principal priorities for your firm and your legal career scope?
The priority for the business is to grow. I want to be part of a firm that has great people onboard, a fun and interesting office environment, and happy clients. I believe it is possible to achieve this.
How do you believe you and the firm meet these priorities, and what are the challenges you encounter daily in doing so?
Our client base is growing steadily, partly through referrals and partly through my efforts at networking and marketing the business. We have a long way to go but every client who tries us out comes back for more, so I’m confident that we are offering a service that clients value.
We are also building a great team. Again, it’s steady rather than rapid growth. The doors are not open for anyone who wants to join. Experience is hugely important but what is also very important is personality. I think for small business especially the clients want to speak with someone who is personable, open, who can listen, who is down-to-earth.
The challenges are many! Lots of small businesses do not use lawyers because they think that lawyers are going to add unnecessary complexity to the job and charge too much. The thing is – they are right in a lot of cases! Or there are businesses using lawyers, but they are not happy with them. So how do I convince potential clients that we are different and that they should give us the chance to show that we are going to add value and make life easier for them? It’s hard because you are asking someone who doesn’t know you to trust you. There are things that you can do to make it easier for a potential client to take that step, but it’s always going to be a challenge.
In terms of building the team it is not easy getting the right people onboard, and it takes time. The great thing is that it is easier than it used to be because our profiles are out there on social media and the technology enables us to work remotely, so I am not restricted to only engaging people who can come into the office.
Briefly, what are the main considerations you advise your clients on in UK investment, technology, IP, and other matters? What are the main legal talking points of today’s small businesses?
For transactions such as acquisitions and investments I tend to spend time at the outset advising on the best structure. It is crucial to get the foundations right to avoid wasting time and money down the line before and after completion. I want to understand the commercial rationale for a deal and what the client thinks they are going to get out of it. I look for the simplest structure to put in place that is going to give the client want they need and that the other side can live with. It’s not always possible for things to be simple but we’ll make the process as painless as possible.
Regarding specific considerations for transactions – the main areas where I am particularly involved in are around earn out/retention provisions, warranties, exclusions of liability and analysing due diligence.
For technology clients, one of the main considerations before drafting or negotiating their supply of software/services contract is checking the underlying contracts that the client already has in place from its own software/services suppliers. It sounds obvious, but I see this being overlooked quite often. I also tend to get heavily involved in the licensing and service level arrangements and of course the exclusion of liability clauses.
Main legal talking points for small business: using share schemes to incentivise staff, responsibility around handling data (particularly in the technology sector), knowing when to reach out for legal advice and who to go to.
What have you been working on during the last few months? Are there any cases which spring to mind as particularly interesting? Have there been any particular complexities involved?
An employee share incentive scheme for a medium sized international business. This has thrown up all sorts of issues, but I have to admit my involvement has been minimal. One of our consultants is an expert in these matters and she has been leading on it and doing an outstanding job.
Helping a telecoms client with a contract where they will be supplying hosted applications services to a major player in the internet services industry and their customers. With the same client I have also been drafting a guarantee that they will give to their resellers against PBX dial-through fraud. This is complex work for anyone. It is crucial to understand the client’s business and to get the drafting right because if there are things missed in the guarantee wording the adverse effects for the client could be huge.
I have been helping a client with a contract to supply technology solutions – eDiscovery and forensics – to a large city firm. There was already a framework agreement in place between my client and the firm so, rather than re-invent the wheel, I drafted the documents – work order and service level agreement to fit with the existing framework arrangements. I wanted to avoid a situation where the client and its customer were going to be negotiating unnecessarily, but it was not easy bolting on the new services to the old.
I just helped a shareholder deal with a messy situation with a former colleague who had left the business. My client had been badly advised and when he came to me he was in a difficult position with his former colleague still holding half the shares in the company and wrongly telling customers that his business had taken over my client’s. In the end my client got all the shares in the company back and a settlement agreement to put a stop to the passing off. I did not find this a complex case from a technical perspective – the challenge was to keep a lid on legal costs with the other side wanting face-to-face meetings to resolve things. We avoided these and so were able to keep the legal spend in check while still getting what we wanted.
