I was fascinated to read Leah Eichler’s article in the Globe and Mail this past weekend discussing the rise of a new breed of “accidental entrepreneurs”.  Unlike traditional entrepreneurs, who are motivated by a passion to solve a problem or turn a hobby into a paying job, the “accidental entrepreneur” has been spawned by the downturn in the economy and is motivated to replace their lost wages.  In the article, Brian Burch, V.P. of consumer and small business segment marketing at Symantec, was quoted as saying that these enterprises “act very differently than traditional entrepreneurs because they are built for profit and they are built for scale.”

This got me thinking about our own work supporting our entrepreneur clients.  Traditional entrepreneurs tend to come to us after having been in business for a number of years.  Having started as a very small enterprise, sometimes with few or even no employees, they generally “muddle through” any employment law issues for years before something prompts them to seek out formal legal advice.  A traditional entrepreneur will often come to us having received a lawyer’s “demand letter” in respect of an employee they have recently terminated, or they might come to us to assist in the drafting of an employment contract or a non-competition/non-solicitation agreement for a new strategic hire.  These experiences often represent somewhat of a “coming of age” for these organizations which, having now grown to a certain size, realize the value of investing in sound legal advice as part of a more sophisticated human resources strategy.

So, I’m now calling out to all “accidental entrepreneurs” – if profit and scale are your objectives, my advice to you would be to seek out employment law assistance at the outset and before you accidentally create legal problems that will be far more costly to solve than to proactively prevent.  For traditional entrepreneurs, we find that these can be costly lessons to learn, but they are often on a smaller scale – they “sting” in the short-term but the learning pays off in the long run.  Accidental entrepreneurs making these same employment law mistakes in the short term could find them far more debilitating, depending on the nature of their enterprise, and most if not all of these issues can likely be avoided with some good planning.

Take employment contracts as an example. Many traditional entrepreneurs with whom we have worked tend to draft their own, based on samples they find on the internet.  These work well in many cases and for a time, often because employees hired early in the life span of the business are lower-level and do not challenge them.  However, accidental entrepreneurs looking to maximize profit and scale may find themselves hiring at a much higher level and there is much protection to be gained through the use of well-drafted employment contracts.

If you find yourself joining the ranks of the accidental entrepreneurs, don’t wait for an accident to happen.  Consider consulting an employment law expert – you may be surprised that what you thought was just another expense can actually save you money in the long run, helping you maximize profit and scale sooner.

Christine Thomlinson