While the economic downturn has prodded many small businesses to cut corners, Mellisa Larkin sat down with TickerTV to outline the dangers of this approach.

 

 

The pressure is on for Australian small businesses to stay on top of regulatory compliance and contract law. Speaking recently to TickerTV, Founder and Managing Director of Adelaide law firm Peripheral Blue, Mellissa Larkin, discussed the issues around businesses cutting corners with contracts, and the challenges of understanding and operationalising their compliance obligations in the fast-moving regulatory landscape.

Ms Larkin said that, typically, “small businesses in particular, only have a certain amount of budget and so they take a view when looking at how best to get ‘bang for their buck’ about where they’ll spend that money….and they look at things like marketing or, investing in R&D… and then they look at something like legal as a cost as opposed to a risk minimisation measure which does save money in the long run,” she said 

When asked whether factors including the economic downturn brought about by COVID-19 have considerably contributed to this, Ms Larkin noted it has no doubt had an impact “because at the moment too many organisations and businesses are doing it tough and where they’re looking to save money, they will.

“A lot of companies try to do DIY contracts which, again, depending on their risk appetite at the outset … they might be very comfortable with, but they are fraught with risk,” she said, and fairly typical in the start-up phase. 

“ tend to have an appetite for risk because they’re going to spend the money elsewhere and they’re forward-looking and focusing on how to grow and develop the business. 

 

 

“Usually once they hit the three million turnover mark, they start to become a little bit more aware of the risks and the policies and procedures they need to have in place to manage their organisation and the growth internally of their organisation, but also to protect themselves.”

Mellissa acknowledged the challenge companies of all sizes face to keep up with the ever-changing regulatory environment, but particularly “or small businesses, it’s a massive challenge. A lot of them opt to register with their relevant industry bodies so that they get notifications at least when there have been changes to the regulations or the legislation and they might get a summary of what those changes might mean for them…or subscribe to compliance platforms where, again, they get notifications in their specific industry about various changes to the regulations. 

“ can be helpful because it gives you a heads-up, but…you still need somebody in your business to work through those changes and identify which ones actually apply to your business and what you need to do to operationalise those in the business.”

On the subject of privacy, Mellissa believes that Australians are increasingly becoming more aware of the risks involved with signing up to and giving away their rights over their data and their privacy. 

“I think we see that in terms of the government introducing the Notifiable Data Breaches Scheme in 2018…that requires companies to notify individuals and also the regulator if there’s a data breach, so that’s really important. 

 

On the subject of privacy, Mellissa believes that Australians are increasingly becoming more aware of the risks involved with signing up to and giving away their rights over their data and their privacy. 

 

“We’ve seen it when they introduced the COVIDSafe app. The government didn’t just roll that out. They undertook a privacy impact assessment, which basically looked to determine what risks if any would happen and all of the various factors involved in rolling out an app of that sort before they did it. 

“Both those points speak to the fact that the government’s aware of the increased sentiment among the Australian citizens of the need to have their privacy and data managed appropriately and transparently.” 

 

 

Mellissa Larkin is an award-winning legal practitioner and is committed to innovation in the legal industry. 

To find out more, visit www.peripheralblue.com.au

 

 

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