good at business?

Not that I ever want to be seen as a cheersquad for lawyers, but all to often I am driven mad by business people completely ignoring the legislative framework we operate within. What do I mean by this? Some recent examples:

1. A employee telling me that their probationary period only technically finished on the date listed in their contract (3 weeks ago) as their manager told them it would run to the end of this month instead.
2. A contractor telling me he had been grossly underpaid, receiving only 10% of the value invoiced to a client for work he had done. When asked what did his agreement say, it turned out there wasn’t one, but he still insisted he had been cheated.
3. A very, very senior industry consultant being surprised he was 10% worse off when he had to wear the GST on a contract that was provided to him by an Australian local office instead of the New York parent.
4. Turns out that a group running events in Melbourne and Sydney for a couple of years for money, is trading as an entity that doesn’t appear to actually legally exist anymore!
5. An investor in a business turning over some millions of dollars thought Directors and Shareholders were pretty much the same thing.

What’s fascinating is in that every instance above, the people involved had university qualifications in business, including Masters Degrees and even a Doctorate. However they completely ignored the legal environment they were operating with and generally accepted someone elses “world view” as the correct one instead.

Now I’m in love with innovation today; open source, digital technologies, communities of interest and new insights. However I cannot accept that to embrace innovation means abandoning the rules we operate by. Sure you can question them, but just don’t ignore them.

In the cases above, my advice has been :
1. Nope, your probationary period actually finished three weeks ago. You cannot be terminated without process and grounds.
2. You’re an idiot. You had nothing in writing and consequently were taken advantage of. Learn from the experience and move on as there is no legal issue here.
3. Basic business mechanics matter – you are not above them in some stratosphere where its just about strategy.
4. I cannot take these people seriously as they are actually breaching a state laws.
5. Get your share certificates now to prove your ownership and brush up on the duties and liabilities of Directors and rights of Shareholders.

I’m not a lawyer and in fact have forgotten most of the contract and commercial law I was taught at Uni. However I do strive to think about legal implications of what I do because they are one of the sets of rules we play by in business. If I can use a sporting metaphor: Heuristics, equations and frameworks control what happens on the field, legislation and common law gives us the boundaries that play occurs within.