Hidden legal risks when scaling

Growing your business feels amazing. More customers, more revenue, more people wanting to join your team. You’re finally getting somewhere.

But growth brings some unexpected legal challenges along with it that weren’t even on your radar when you started.

Those casual ways of doing things that worked perfectly with 3 people can cause real problems once you hit 10 or 15 employees.

The most common problem areas are:

1. Outdated employment contracts

That template you downloaded years ago probably doesn’t cover what you need now.

I’ve seen business owners get caught out when employees leave because their contracts didn’t properly cover confidentiality or notice periods.

Worse, if your contracts don’t reflect current employment law, you might be giving people more rights than you realised or be failing to protect yourself properly.

2. Missing policies you actually need

When you had a handful of employees, you could handle everything as it came up. But as you grow, you need written policies to ensure consistency and legal compliance.

Without clear guidelines on things like disciplinary procedures, grievances or leave entitlements, you might make inconsistent decisions that lead to discrimination claims or tribunal cases.

3. Weak hiring processes

When you’re growing fast, it’s tempting to rush through the paperwork.

But sloppy right-to-work checks can lead to fines of up to £60,000 per illegal worker.

The financial risk is the same whether you have 3 employees or 30.

4. Untrained managers

You promote your best employee to team leader, brilliant! But have they ever dealt with a performance issue?

Do they know what they can and can’t ask in disciplinary meetings?

I’ve watched good people make expensive mistakes simply because no one taught them the rules.

5. What it costs when things go wrong

Employment tribunal claims are on the rise. It’s not just the money, though the average awards keep climbing. It’s the time and stress that should be going into your business.

Even defending a claim that you win eats up weeks of your life dealing with lawyers instead of customers.

6. Why sorting this early makes sense

The best time to get your HR sorted is before you need it. When you’re not under pressure, you can think things through properly.

I’ve seen too many business owners scrambling to write maternity policies when someone’s already pregnant or trying to implement flexible working processes when they’re already dealing with a request.

Plus, if you’re looking for investment, having proper contracts and policies actually speeds things up. Investors want to know that you’ve got the basics covered.

Getting ahead of yourself

You don’t need a fancy HR department, but you do need the foundations right.

Take an honest look at what you’ve got. When did you last check your contracts? Do you have the policies you actually need? Can your managers handle HR situations without making costly mistakes?

If you’re planning to grow or looking for investment, it’s worth getting your contracts and processes reviewed now. Much easier to sort this stuff out when you’ve got the time to do it properly.

You’ve worked too hard building this business to let preventable legal problems derail it.