Note to Entrepreneurs: Avoid Lawyers
The founder of a new start-up company came to me yesterday for advice. He had lots of exciting ideas for how his company was going to be different but had hit one problem: They were taking extensive advice from lawyers and this seemed to be getting in the way of building the company the way they wanted. The employment contract, for instance, was full of "You must" and "You must not" and undecipherable legalese. He wanted flexible hours and employers able to do what they liked on the internet, but he'd ended up with a contract requiring staff to work 10 to 6 every day, and make no personal use of IT.

My advice was simple: ditch the lawyers. No great business I've ever heard of was built by lawyers. At Happy there was a period of 5 years where we paid a total of 200 Pounds to lawyers, and that included signing a 1 million 5 year contract with the NHS.There are legal requirements you must follow and you must, for instance, give your people employment contracts. But you are far better going to somebody like the Federation of Small Business, who will let you know what the legal requirements are and supply a sample contract, and check yours once you've created it, than any lawyer I know.

Lawyers will come up with 101 things you've got to protect yourself against, so you don't get sued. In reality the best way to ensure you never get sued is to be nice to people (staff, clients, partners). Make sure, even when you have to let somebody go, that you leave them feeling good about themselves. We, for instance, give people 3 months to find a new job if it hasn't worked out at Happy. Its much better to have ex-staff who think you are great (and may hire you into their next company) than bad mouthing you to everybody they meet.

Of course there things you need to be firm on. Our contract is very strict on staff not leaving to join clients of Happy. But keep contracts to a minimum. Our client contracts are effectively one paragraph: this states the price, payment and cancellation terms and says they can claim their money back in full if they are not happy with the service.

So my advice to any entrepreneur: Cut the lawyers and keep the contracts to a minimum. Focus instead on delivering such great service that it never crosses anybody's mind to resort to the contract.