How Entrepreneurs Can Avoid Legal Trouble In The U.S.

Maria Tufvesson Shuck—SACCNY Board Member and Partner at the law firm Mannheimer Swartling—shares her perspective on legal protection in the U.S., which is known for its complex legal system and a strong tradition of litigation.

For anyone looking to start or expand a business in the U.S., one of the greatest concerns is legal issues. And rightly so. According to Maria Tufvesson Shuck, a Partner at Mannheimer Swartling, the only Scandinavian law firm with a presence in the U.S., potential risks are abundant given the complexity of the U.S. legal system and the U.S. tradition of litigation. In addition to the 50 different state legal systems, there is also a federal legal system that governs certain areas such as intellectual property and bankruptcy. Since each party normally pays its own legal fees in litigation, it is quite common for meritless law-suits to be started, just to gain a negotiation advantage. As a result, “most entrepreneurs find themselves in need of legal advice not only during the setup period, but also on an ongoing basis.”

Intimidating as this may seem, you can still grow your business in the U.S. without a hitch. For one, says Tufvesson Shuck, “Do your homework and know what you want to achieve. Things change faster in the U.S. than in Sweden, so do not enter into any long term contracts and remember that everything is negotiable here.” As for key legal aspects to consider when starting a business, Tufvesson Shuck suggests “proper insurance protection and liability limitation, plus making sure there is no infringement of intellectual property rights of others or breaching of immigration laws.”

Now, for anyone familiar with legal costs in the U.S., they know it can make a huge dent in the wallet. But if you want to scrimp by resolving certain issues yourself, make sure you get initial legal advice on establishing the right type of entity, preferably from someone with experience in assisting other foreign entrepreneurs, and invest in properly drafted standard documents and manuals. Once these things are in place you can start doing business and limit the legal expense budget to matters of significant importance and matters that do not fit squarely within your standard business covered by your standard documents.

Lastly, never underestimate the price of dealing with U.S. bureaucracy and doing business here. Which is why, at the end of the day, Tufvesson Shuck’s most important advice when it comes to avoiding legal troubles is: Proper preparation and reasonable budgeting.

Maria Tufvesson Shuck
Mannheimer Swartling