News and Events

Why start ups need good staff contracts

View profile for Louise Taft
  • Posted
  • Author

Nobody likes paperwork, least of all people attracted to start up culture. You’re meant to work in a lean, agile, fast paced environment dictated by your daily scrum, not one hamstrung by job descriptions and staff handbooks.

Nevertheless, well drafted contracts, policies and procedures not only come into their own in the event of a dispute but can help to define a working relationship. The key is to have bespoke documents drafted with your organisation and roles in mind. Job descriptions and role definitions can be loose, hours and methods of work flexible, but the important thing is that both parties are clear about how the working relationship will work, and what will happen if that relationship ends.

Using template contracts downloaded from the internet or recycled from another organisation is a false economy. Whilst such contracts might cover basic areas such as how to deal with sickness and holiday, recycled contracts are unlikely to properly protect the business in areas dealing with the use of confidential information, IP, competing with the business or poaching employees. Restrictions of this nature need to be carefully considered to ensure that they are both enforceable and work for you: a good lawyer will get to know you, your business and the role before drafting a contract to ensure that you are best protected.

Contracts are as, if not more, important for your freelancers as they are for your employees. Freelancers will come and go more often, and are likely to be paid more (so you want them to be worth it). They have less of a stake in the business, and will be less loyal. Pinning them down as to how they will work for you and what happens when they leave you is vital.

Good employees and freelancers are in demand. Contracts that seek to be overly restrictive are unlikely to be accepted. A badly drafted contract can, at worst, put off the very people you are trying to attract to your start up. Negotiations over a badly worded contract can drag on so long it’s not agreed before the working relationship comes to an end.

A well drafted, bespoke contract need not cost the earth. Here at Freemans, we work efficiently to gather the information we need from you to draft a document meeting your needs. A few hundred pounds can buy you not only the peace of mind from knowing your contracts are fit for purpose, but save money and management time involved in trying to shoehorn square template contracts into a round hole.

As well as contracts for general staff and freelancers, where directors are also shareholders, we can draft both directors’ service contracts and shareholders’ agreements to guarantee that they are seamless and work together.

If your start up needs staff contracts, or you have any other questions arising from working relationships, contact Louise Taft on 020 7935 3522 or