Navigating the legal maze: How small businesses can stay ahead of evolving regulations

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Keeping up with ever-evolving regulatory and legal trends can be challenging for small businesses, but the right advisory support can make a difference, according to local attorneys.

“There’s no substitute in an area that’s this complex for talking to an attorney,” said Katarina (Kate) B. Polozie, CIPP/US, AIGP, a partner at Woods Oviatt Gilman LLP, about data and privacy laws and regulations specifically. “You can go down a rabbit hole with every minute regulation, not understanding whether or not it will impact you, or thinking that it doesn’t impact you when it does.”

Polozie is the firm’s practice group leader for the Data Privacy and Data Security practice group. A notable trend she’s seeing in the data and privacy realm is an increase in privacy regulations by individual states. This is something that can be especially challenging to stay on top of for business owners of all sizes.

“These regulations are hard to identify on a state-by-state basis if you don’t discuss them with an attorney,” Polozie said. “The best advice I can give is to find somebody who is a privacy attorney that is practical, that you can trust and that can say, ‘This is the area you are in, this is what you need to look out for, this is the trend of what’s coming and this is how you can prepare.’”

Polozie stresses that data has no boundaries and even if a business is headquartered in a state that doesn’t have a specific data privacy law for consumers (for example), businesses should still consult a privacy attorney to see what laws could apply to them.

“In New York, we always have legal obligations to secure and safeguard our data, but then there could be additional consumer rights that could apply,” she said. “Depending on how local or national or global your product or your business is it’s really going to change the regulatory landscape for you and specifically if your product is in a sector that is protected, like children or health care.”

Eliza P. Shea is a partner in the Corporate and Securities Practice Teams at Lippes Mathias LLP where she concentrates her practice on the representation of private companies in all stages of the growth cycle, including start-ups, which she says should be mindful of regulations and laws that may apply to them from the start.

“The way that they form the company from the beginning is really important,” Shea said. “We see people not engaging lawyers and trying to do it on their own and then having to unwind it a lot. There are a lot of tax considerations so being mindful of the requirements and making sure that you engage a lawyer and an accountant early in the process is really important.”

In times of economic and regulatory uncertainty the support of a strong advisory team is especially important, Shea notes.

“I would say right now, given all of the uncertainty, it’s really important to have good advisors – a good accountant who’s going to be able to keep you up to date on what’s going on and a good lawyer who’s going to be able to keep you up to date on what’s going on from the other end,” Shea said.

She recommends looking for a law firm with a diverse and robust corporate practice group and suggests subscribing to e-newsletters published by trusted law and accounting firms to stay up to date with laws and regulations that could impact your business or industry.

On-again-off-again tariffs are a timely regulatory issue that Steven Y. Solomon, a partner at Harter Secrest & Emery LLP, is monitoring closely. Solomon’s clients tend to have staff sizes ranging from a handful of employees to 150 and come from a wide swath of industries.

“Tariffs either impact or potentially impact a large portion of my client base,” Solomon said. “Certainly I have some clients that for the most part are not going to be impacted just by the nature of what they’re doing, but even if your business isn’t one that imports products or imports materials that might be subject to a tariff,  you still have consumers who might be worried about the impact of the tariffs on their pocketbook and therefore may be buying less.”

Solomon has seen businesses in some industries like construction pre-ordering inventory for themselves or their customers to get ahead of potential tariffs, but that’s not always possible due to access to capital or other issues.

“Try and focus on your business,” Solomon said. “If you know there is something that you can do on a preventative scale like purchasing materials look into it, but don’t get frantic about it.”

He recommends that if your business has enough personnel, it could be helpful for someone to act as a point person to help monitor tariffs or any other trending regulatory issue of interest.

“And take advantage of your advisors,” Solomon said. “I don’t say that as a selling point for lawyers. Don’t be afraid to call your accountant, your insurance agent, your payroll company, your attorney and say, ‘I heard of a new regulation out there, am I supposed to be doing something with my employees?’”

Solomon says smaller businesses may be reluctant to spend money pre-emptively, but a small amount of money to talk to an advisor for half an hour could end up saving them tens of thousands of dollars down the road.

Caurie Putnam is a Rochester-area freelance writer.