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Carolyne Guya: Advice to African start-ups on the value of using legal services

ALT member, Carolyne Guya, shares her advice to African start-ups on the value of using legal services.

Carolyne Guya: Advice to African start-ups on the value of using legal services


Early-stage start-ups, usually cash-strapped and running lean, often have trouble justifying the cost of quality legal personnel. Founders sometimes have a hard time understanding the value of their lawyer’s time. Sometimes start-ups will try to avoid the legal expenses altogether by taking on legal work themselves. This can often lead to negative consequences for the business.

Compliance in the digital economy is a necessary business obligation, and its importance and challenge continues to grow. Yet many businesses struggle to fully understand the cost of non-compliance and how to manage compliance as effectively as possible. Businesses ought to take their corporate responsibility seriously to ensure they are meeting regulatory, legal and ethical obligations. Customers and shareholders expect it, and regulators demand it. Beyond financial penalties, a compliance failure can cause havoc on an organisation’s reputation and customer relationships and negatively impact growth and profitability targets for the foreseeable future.

Regulations such as the EU’s General Data Protection Regulation (GDPR) which took effect in May 2018, drive immediate compliance response at technology firms and others that digitally store customer information. This confirms that the need for compliance risk management will persist, and compliance cost and complexity will continue to rise. Businesses must meet a wide range of compliance requirements, both external and internal. The challenges involved in managing compliance and ethics-related risks are magnified by changes in business structure, dispersed operations, new or updated rules and regulations and increased enforcement.

There is therefore need for businesses to invest in compliance personnel who sit in business units to serve as a point of connection and coordination. Embedded business unit compliance and ethics officers help to enable their business units to take greater ownership and accountability for compliance and applicable requirements while also implementing enterprise-wide compliance initiatives.

Legal services providers play a critical role in such emerging issues. The benefits of investing in legal services as business entities seeking to remain on top of the changing dynamics are not limited to guidance but include:

  • Best practice on corporate management and governance systems – advising on corporate and directors’ liability;
  • Mitigation legal and reputational management mechanisms – i.e advising on compliant contractual terms and legal recourse in the event of breach including alternative resolution mechanisms;
  • Conducting and advising on legal compliance audits on internal policies, standards and practices to ensure alignment to required laws and regulations;
  • Offer continued awareness services on compliance requirements and general advisory roles;
  • Drafting essential terms of uses and policies – investing in legal skills plays a role in create policies that are specifically tailored to your needs and reduce liability;
  • Data management – collection, storage, access, third party contracts, information sharing, risks, threats and liability insurance, breach response and accountability.

Legal expertise is therefore pivotal in creating a successful high-growth company. From incorporation to exit, lawyers are there to help companies navigate and avoid the many pitfalls that can severely hinder the start-up’s chances of success. Lawyers’ expertise and experience, both with the laws, regulations and practices governing operations and with the process of taking investment, make it crucial for businesses to develop early relationships with lawyers to grow effectively. Additionally, lawyers specialize in navigating complexity in the regulatory framework and indeed where there isn’t one yet. These are processes that are not prudent to undertake without the assistance of an experienced professional. Therefore, the greatest value a lawyer will bring to a new company is a third-party, objective, strategic, and analytical thinker that can help give the business its best chance at long-term success.

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