They protect you from liability exposures and potential lawsuits. They protect your intellectual property including trademarks, trade dress, copyrights and patents. To do this they typically demand that “everything goes through compliance.”
Most established companies are so afraid of liability that their legal department can wind up virtually running the company. Initiatives can grind to a halt as they take months to go through compliance. Eventually if they finally approve the proposal, the opportunity may have passed. In this way, the brand itself can be hurt by well-meaning protectors.
Most legal departments work on billable hours or salaries. They get paid whether or not a fix to a critical marketing problem is delivered on time. They generally have no financial consideration for profitability, growth or sales, as they make the same no matter what happens to the company, until, of course they get laid off when the company folds.
They also work in the “office,” not in the marketplace. They generally have very little contact with the customer. But they can affect the customer experience negatively in the name of mitigating liability. Here are some brand damaging moves from legal to watch out for:
1. Warnings. Warnings are required on many products, but should they be larger and more prominent than the product description or catch phrases? If the last chance you have to sell your product to your consumer is the last line on the label, should it be the buy message or the warning? Be sure you understand all the requirements for warning size and placement. We have found there is quite a bit of latitude to be compliant and still leave the customer with a positive message.
2. Prevention. Many sales people refer to legal as the “sales prevention” department because they can actually stop sales in the name of mitigating liability. Typically compliance puts a stop to a sales person’s idea because it is either illegal, against industry regulations, or it exposes the company to liability. Sometimes the problem lies with how the question was put, such as, “Can we do this?” The real question should be “Here’s what we are trying to do; how can we do it legally?” If legal’ s compensation was based even partly on sales, they likely would handle matters a bit differently.
3. Gridlock. Sometimes the requests for compliance can be so backlogged that time-sensitive priority issues affecting the health of your brand can be left unresolved. In an effort to mitigate liability and still protect their own jobs, legal can incorporate prewritten guidelines, that if met eliminates the need to go through compliance. This approach can reduce the gridlock and help resolve issues in a timelier manner.
4. Overkill. Your legal department can see potential lawsuits everywhere. They can imagine the most unlikely scenarios and spend hours protecting you from them. At some point it’s overkill and this can hurt your brand. It is up to you to set the limits of your potential exposure. If you leave it to legal they can stop you from doing just about anything. Your competitors can take your customers while you are protecting yourself from imagined dangers that may be potential but implausible.
We need our legal departments to protect us. With a few adjustments, legal can do their job and your brand will grow and thrive!
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders