Handshake Deal Syndrome

Recently a client who had formed a business with his friends chose to handle their business legal infrastructure & founding documents informally without considering the possibility of future conflicts or changes requiring proactive legal considerations.

Recently a client who had formed a business with his friends chose to handle their business legal infrastructure & founding documents informally without considering the possibility of future conflicts or changes requiring proactive legal considerations.

I refer to this as Handshake Deal Syndrome: "I trust & know you, so we don’t need to involve any lawyers. Let’s do this on our own."

With those famous last words & bare bones legal planning, they proceeded to grow a business with relations diverging among the founding owners as time passed. The business is now left with lack of guidance for how to handle their current legal impasse & conflict, absent a defined ADR process & legal infrastructure. After all, a default judicial process is not suited for their emotionally charged conflict steeped in relationships issues.

While tackling your own legal matters may be cost effective and ideal for some instances, customized counsel to guide you through conscious legal planning & strategy is optimal & prudent.

On an executive level, you maintain the ability to integrate legal strategy into your business decision making process, such that your business choices are optimized by having legal insight considered in your business strategy.

Is your business legally prepared to manage & sustain the growth intended? 

There's effort involved to consciously engineer your business’ legal architecture & clarify agreements to manage inevitable changes, versus giving up your power by default to the legal system, which may have trouble controlling your risks and relational dynamics.

Not agreeing on the details to achieve clarity on finer legal points, intending on refining the legal infrastructure after beginning performance is risky because the lack of commune-ication & agreement can strain your business progress & momentum over time.

All I know is that change is the only constant in life, and preparing for it in your business’ legal architecture & agreements is seminal for any inevitable shifts in business dynamics.

Are you & your business suffering from Handshake Deal Syndrome?

All events should be crossed in imagination before reality - Sigmund Warburg, founder of UBS