Making Sound Business Decisions: Why Legal Counsel and Clear Thinking Matter

By Lorraine Galvis, Esq.

In today’s fast-paced, high-stakes business environment, small business owners, investors, and family entrepreneurs often find themselves navigating complex situations without adequate support. Real estate investment decisions, partnership changes, and sudden disruptions can lead to rushed decisions—especially when driven by anxiety or pressure. In such moments, the clarity that comes from consulting a legal advisor can be the difference between long-term success and avoidable setbacks.

In this article, we explore the importance of sound decision-making supported by legal guidance, and the real-world consequences of acting too quickly when emotions are high. Whether you’re managing rental properties, operating a family business, or restructuring your company, taking time to pause, plan, and get professional input is key to protecting your investments and goals.

Avoid Emotional Decision-Making in Business

One of the most important lessons I’ve learned in my legal practice is that decisions made under pressure rarely yield the best results. Emotional overwhelm—caused by fear, stress, or urgency—limits our ability to consider alternatives and assess long-term consequences.

Recently, I worked with a client managing a rental property owned by her retired parents. While trying to make decisions regarding tenants and lease renewals, she found herself overwhelmed. Balancing a full-time job, family responsibilities, and personal health concerns, she was also fielding unexpected calls and in-person meetings from tenants seeking immediate answers.

This pressure led to rapid, inconsistent decision-making, increasing the client’s potential exposure to legal risk. She was agreeing to lease terms without understanding the full implications. Our legal team advised her to slow down, avoid making verbal agreements, and ask for time to review the lease, research the market, and discuss matters with counsel before committing to anything.

Lesson Learned: Business decisions should never be made reactively. Instead, take a breath, seek guidance, and understand all legal and financial implications before responding. Respecting that process protects both you and the other party—and reinforces that you are running a business, not just reacting emotionally.

Real Estate is a Legal Landscape—Navigate It With Caution

Real estate law is not just about paperwork; it’s about relationships, contracts, long-term investment, and regulatory compliance. Even a simple decision like renewing a lease can have ripple effects, including setting rent expectations, defining notice periods, and impacting your ability to end a tenancy in the future.

When dealing with tenants—particularly when you are new to the role—getting caught off-guard is common. Yet, reacting without preparation can create informal agreements that weaken your position or violate state landlord-tenant laws.

In the case above, we reminded the client that her tenants had every right to consult counsel before entering into new agreements—and so did she. If someone pressures you into making a quick decision, that is often a sign to pause. Being proactive, rather than reactive, leads to better outcomes and avoids legal entanglements.

Company Restructuring Requires Legal Strategy

In another situation, I worked with a client facing a shift in their business structure. A founding member of the company had suddenly decided to leave the industry. The client, caught off-guard, was anxious and unsure how to move forward.

Rather than taking immediate steps or announcing changes prematurely, we advised the client to pause. We reviewed the company’s formation and governing documents and we are helping the client outline and navigate a compliant, state-law-aligned path forward for member removal and ownership transfer. Questions like whether a resignation is required, whether interests must be appraised at fair market value, and whether the interest can be reassigned must all be addressed before action is taken.

Lesson Learned: The governing documents of your business—operating agreements, shareholder agreements, and strategic partnership contracts—are the rulebooks. They determine the right steps to take when facing major transitions. Trying to improvise these decisions without legal input can lead to internal disputes, regulatory violations, or even costly litigation.

3 Rules of Thumb for Proactive Business Legal Planning

To avoid future overwhelm and poor decision-making, here are three proven strategies every business owner should implement:

Retain a Lawyer Early. Look for and establish a relationship with a reputable attorney who understands your business. You can start with a simple internet search (I generally only look for practitioners with at least 4.7 stars and up and recent reviews within the last 6 months) and or asking a colleague for a vetted referral. A lawyer who knows your goals and history can offer faster, more relevant advice when issues arise.
Budget for Legal Expenses. For businesses grossing less than $100,000, plan to allocate at least $5,000 per year or 3–7% of your annual revenue to legal support, and up to 10% if your business is generating six figures or more. Treat legal counsel as a strategic investment, not just a cost, and budget for it just as you would business expenses like accounting or bookkeeping service, rent, or insurance.
Call Your Lawyer Early. Don’t wait until a problem explodes. Email or call your lawyer within 24 hours of identifying a potential issue. Early guidance prevents missteps and gives you time to consider options, including negotiation strategies or formal notices.

The Power of Taking a Breath

A recurring takeaway in both cases I’ve shared is the importance of hitting “pause.” Whether it’s a tenant asking you for a new lease term or a partner withdrawing from the business, your response should not be driven by fear or confusion.

Your responsibility as a business owner is to make legally sound decisions that reflect your values, risk tolerance, and long-term plans. That often means slowing down, breathing deeply, and asking for help.

When clients take this advice seriously, they are more likely to protect their assets, maintain professional boundaries, and create a business that thrives even in challenging situations.

Lesson Learned

Ultimately, the most valuable lesson I can share is this: never make a business decision in a state of overwhelm. Emotions can cloud judgment, restrict creative thinking, and lead to commitments that are difficult to undo.

Instead:

Pause before responding.
Consult your legal or financial advisors.
Consider whether there is another approach.
Acknowledge that uncertainty doesn’t require immediate action.

If a party you’re dealing with refuses to respect your need for legal input, they may not be the right business partner, tenant, or customer for your enterprise. It can be difficult to accept this, especially if there are financial consequences in the short term—but in the long term, this clarity allows you to build stronger, healthier business relationships.

Conclusion: Get Legal Advice Before You Need It

Running a business or managing a property portfolio comes with legal and emotional challenges. Don’t navigate them alone, and don’t wait until mistakes are made to ask for help. A knowledgeable lawyer can provide the strategy and support you need to make clear, confident decisions that move your business forward.

If this resonates with you, and you are navigating a property, partnership, or structural business issue, please reach out. We can help guide you through the legal landscape and empower you to move forward with clarity.