"Why should I care about laws in states where my company doesn't even operate?"

I get this question from founders all the time. And honestly? I get why they ask.

Keeping track of legal developments is exhausting when what you really want is to focus on making the business work.

But here's the thing — for a growing company today, "we're based in one state" almost never means "only one state's laws matter."

Four reasons why:

1. Your team doesn't all live where you do.

Post-COVID, your people are working from their kitchens and spare bedrooms — maybe across the country, maybe across the world.

And courts generally don't care what your employment agreement says about which state's law "governs." They look at where the person actually sits and does the work.

Same goes for the big one: whether that "independent contractor" of yours is really an employee (with all the taxes and obligations that come with it). Ask California or New Jersey — two states where it's far easier than you'd think to land on the wrong side of that line.

2. Doing business online means playing by other people's rules.

Sell online, and you may owe sales tax — and need to be in compliance with privacy and data-protection laws — in states you've never set foot in.

And if you're handling personal data out of Europe or the UK? The GDPR (and the UK's version) can hand you penalties big enough to ruin your year. It does not care where your office is.

3. You're probably a Delaware company (even if you've never been to Delaware).

Most U.S. corporations and LLCs are formed there (also see Nevada and Wyoming). If that's you, especially once there's real revenue and outside investment in the picture, then developments in that state's corporate or LLC law are your developments. Keep an ear out.

4. And even if none of that applies to you… your big client cares.

This is one I've written about before. When you land a client (or vendor) much bigger than you, they're doing business everywhere, and all that money makes them a juicy target for anyone looking to file a lawsuit.

So their contract shows up loaded with compliance terms — data privacy, IT security, you name it — that very often go WAY beyond what the law actually requires.

That's exactly why knowing the law is worth your time. It's what lets you say: "Look, we want to narrow this — it's expensive for us to comply with, AND you don't actually need it to be legally compliant."

So what's the takeaway?

Don't just sit back and wait for your outside lawyer to bring the next new law or regulation to your attention.

Here's the uncomfortable part: a lot of the time, we lawyers can't flag the issue until you've told us what's actually going on inside your business.

So take a look at your operations. Maybe Google what's new and might apply to you. Then bring your notes to your lawyer.

You'll get much sharper — and faster, and cheaper — advice. And you might catch things that would've become a headache two years from now.

ASK A QUESTION OR SCHEDULE A MEETING/CALL. 

Disclaimer: This article constitutes attorney advertising. Prior results do not guarantee a similar outcome. MGLS publishes this article for information purposes only. Nothing within is intended as legal advice.