There comes a time in every company's growth when an employee manual becomes essential. "Whether they are explicit or not, companies already have policies in place," says lawyer Robert J. Nobile, a partner at Epstein Becker & Green, in New York City, and author of a guide to handbooks. The act of writing a manual solidifies those policies.

But to get the most out of the process, the handbook's development should be an inside job. Kingston Technology, the Fountain Valley, Calif., company that topped the Inc. 500 list of fastest-growing private companies in 1992, commissioned a handbook when it reached 75 employees. But, according to marketing director Ron Seide, the hired hand merely took a competitor's handbook, called up the search-and-replace function on the word-processing program, and spat out a revisededition.

Kingston employees hated it. "It contained all this legal butt-covering language, which made it seem as if the company didn't trust us and we didn't trust them," says Carol Ruprecht, who works in international sales. When she told the owners how bad the handbook was, they authorized her to fix it. Ruprecht and her sister, who works in marketing, met with the two founders to get their input and philosophy on issues such as sick leave. The 20-page manual they wrote, all agree, better captures the company's true spirit.