Make no mistake, the entrepreneur is an intriguing, necessary creature. Who else can breathe economic life into an idea or invention? In this era of high and arcane technology the entrepreneur is viewed by many as a god-like figure. Such adulation is often dangerous, of course, and no more so than when it springs from the entrepreneur’s own self-regard.
An entrepreneur’s vision can be an intoxicant to both the entrepreneur and those who surround them. However, for a vison to become realized in a productive, ongoing way, it must be accompanied by discipline, the sturdy and repeated blocking and tackling that is essential for any concept to become fully realized. Some entrepreneurs are unable to devote the focus and energy to the unexciting daily chores that are necessary to the success and longevity of any business.
In our highly regulated society much of the heavy lifting required to realize the entrepreneur’s creative vision is allotted to the lawyers, the architects of fine print. Effective entrepreneurs engage their lawyers at the outset of the enterprise and before deals with third parties are made. It is especially important, for example, for a technology company to have its intellectual property protected to the fullest extent of the law before it is disclosed to any employee, business partner or customer. As is pointed out by attorney and author, Paul Swegle, in his excellent book, Contract Drafting For Entrepreneurs and Business Professionals, significant financial damage can and does occur when an entrepreneur’s zeal to finalize a deal outpaces formalization of the parties’ contractual relationship. Once a transaction is steaming forward without a proper written agreement, the opportunity for confusion and disagreement increases exponentially.
Disputes arising without a written contract that clearly defines the rights and duties of the parties creates expensive uncertainty at a minimum. It is common in such a scenario for uncertainty to be quickly followed by litigation, a process that inevitably increases uncertainty, stress and expense. Among other things, well drafted contracts include clear alternative dispute resolution (ADR) provisions that require the parties to engage in direct negotiation and/or mediation before going to arbitration or court. Mediation usually is a successful ADR process that allows the parties to retain confidential control over the negotiation, something that public civil litigation does not afford. Experienced lawyers also provide informed advice to entrepreneurs regarding the plusses and minuses of arbitration versus civil litigation in the rare event that mediation does not succeed.
Astute entrepreneurs resist the siren song of moving faster than their legal protection allows. Their constituency of employees, investor partners and clientele always deserves considered thought before rushing forward into the unknown.
Gregg Bertram M.A., J.D., LL.M. is the President and Founder of Seattle-based Pacific ADR Consulting. He is one of the most experienced and successful mediators in the U.S. Gregg and Pacific ADR's panelists mediate and/or arbitrate in every area of civil litigation at the highest professional level.