Things to Know When You Work with a Lawyer: From Fees, Questions to Ask, Finding One Who Gets You, and Figuring Out How to Prioritize Your Legal Needs – Transcript

[Intro Music] This is Office Talk with Annette Stepanian.

Annette:

Hey, it’s me. I’m back for the first solo episode in quite a while. I missed you. So it’s just me and you again today. It’s all we’re doing – we’re talking about the law just mean you. In today’s episode, I want to talk about some of the common questions that come up when someone is ready to work with a lawyer.

Now, I have spoken to a lot of folks about this topic And I often hear that lawyers are too intimidating. They’re unrelatable. I don’t know how to find somebody who understands my business and they’re expensive.

So we have a lot of potential objections that we need to talk about. And I’m hoping that this episode will give you some insight about how you can approach your relationship with a lawyer when you need to consult with one for your business.

We’ll talk about things like how much they cost, how they bill their time, how to find a good lawyer, and as well as how to prioritize your legal needs.

So first up – how do you find a lawyer who understands what the heck you do and understands your business? That is the most common complaint that I hear from folks. And, you know, it’s like any other time you try and find a referral. You want to ask around, you want to get some recommendations. It’s a bit of doing your own research.

But let’s say you have come down and you figured out you know, there’s a few lawyers you want to reach out to: what do you ask? Well, obviously, you want to find out what kind of experience this lawyer has in the type of issue that you’re having. So for example, let’s say you are having a trademark issue. You want to find out does this person have experience filing trademarks?

Now one common misconception about lawyers is that they know everything. And I know we often act like we know everything, but the reality is we don’t. And much like doctors, for example, we oftentimes specialize in a specific niche. So for instance, I have friends who practice in family law, so they handle divorces and custody battles, I have other friends who do work in trusts and estates and estate planning. So they’ll handle wills and things of that nature. Or I have completely different type of lawyer friends who do construction litigation, for instance. Much like a doctor, what you want to do is find a person who can cure your ailment. So you’re not going to go to a cardiologist if you have a foot problem, or vice versa. So although most lawyers do have a general understanding of the law, it’s always wise to really talk to them to understand what their experience is when working on cases or issues like the one that you’re coming to them for.

Another question you want to ask a lawyer is what state are they licensed to practice law. Now, if you’re not familiar with the process, lawyers go to law school, and then they sit down for the bar exam for a particular state. Now, some lawyers are authorized to practice law in one state, some may be authorized to practice law in multiple states. The key here is you want to find out are they authorized to practice law in the state in which you have legal questions about. So for instance, let’s say you are based in California and you’re running a California business, chances are you’re going to want to talk to a California lawyer because you are operating a business in California.

But using that same example, let’s say you are running a business in California, and you want to open a second location in the state of Oregon. So you’re going to hire employees, you’re going to set up a storefront, whatever it is. Then you also want to reach out to counsel in Oregon. Now you’re thinking well, but I’m a California business with an office in Oregon, why do I need to reach out to somebody in Oregon? Well, you’re running a business in the state of Oregon, you’re hiring employees who are doing work in the state of Oregon. So Oregon’s laws are going to be in effect. So you want to make sure that you are in compliance with any legal requirements for whatever activity you’re going to be doing in Oregon. So hopefully, that is kind of shedding some light on why it’s important to understand what state a lawyer is authorized to practice law in.

Now there is a caveat, of course there is. So one thing you want to just be aware of that there are certain types of issues that that are more federal in nature. So things like copyrights and trademarks. So those types of things it can a lawyer can advise you on regardless of where they are licensed to practice.

Another question that you want to ask is how does this lawyer bill for their time. So this is a really sensitive topic for people because I know how painful it can be when you hear how expensive lawyers are. But I want to talk to you about a few things on this topic.

Now first off, let’s talk about the type of payment structures that you might see. Lawyers generally bill either on a flat fee basis or on an hourly basis. So a flat fee is basically when they say you go to them and you say, I want you to draft this contract, and then they quote you a flat fee for it. Meaning I will draft this contract for you for $2,000, regardless of how long it takes me, the lawyer to do it. So that is a flat fee arrangement.

You can also see sometimes they will charge you on an hourly basis. So they will have an hourly rate. And they will charge you based on the number of hours it takes them to complete that task. So for instance, they might say, “Okay, I will prepare this letter for you at my hourly rate of X dollars.”

Now, speaking of lawyers, hourly rates, sometimes people don’t know how much lawyers costs, and let’s say they’ll get a quote for a flat fee and they don’t even know if that’s like too expensive, too little too much. So generally speaking, lawyers charge somewhere between $250-$350 an hour. Now I know that sounds bananas, and you’re like, Oh, my gosh, I should have been a lawyer because they are bringing in the dough. So as you are talking to lawyers, and maybe they are quoting you flat fees, you know, you might want to think about well, if he’s charging me $1,000 to draft a contract, and I’m assuming he’s about $250 an hour. So he’s, you know, it’s about four hours of work. Well, you know, if you think about the time that goes into drafting a contrac. You know, the time that that lawyer spends talking to you drafting the contract, the time they spend, you know, turning it around and answering any questions you have about the contract, you know, think about all of that, it gives you kind of a good gauge of Okay, this is actually a pretty reasonable amount that this person is quoted me because they’re estimating about four hours of their time, $250 an hour, you know, you’re getting a lot of value there.

Now, $250-$350, an hour is a range, clearly there are lawyers who will charge more, or they will charge less. But that just gives you kind of a good barometer in which to move forward when you are budgeting or when you are interviewing lawyers.

Now, on the topic of fees, when it comes to investing in legal services, I really want you to stop seeing it as a cost. But then reframing it as a value. I know that when you’re first starting up, you have very limited resources, you would rather spend your money on something that feels a little bit more tangible, such as a new website, or you know, stock photography, for instance. So when you start talking to lawyers, and you see what their hourly rates are, it seems a little high, and it doesn’t seem like it’s in your budget. But that’s what happens when you look at it purely from a cost perspective. But if you look at it from a perspective of value – what are you getting in return for making this investment of $250 an hour for whatever $2,000 a contract whatever the price might be? I want you to start thinking about what is that value that I’m getting in return for this investment. That security, that peace of mind, the fact that somebody else is taking care of this problem for you, that protection of your assets, protection of your business. when you start thinking about it in those terms, it really is a wise investment.

And so, so lately, I’ve also been getting on the phone and talking to a lot of you guys to really try and understand what you guys are struggling with. And I’m starting to see a theme. And that theme is really what I call the DIY epidemic. So what it looks like is you have been starting your business and you’ve been doing everything yourself. Part of it is because finances are tight. Part of it is because you love learning. And every time you learn a new software or you learn how to do something new, you just feel super, super accomplished. And part of it is a sophisticated form of procrastination. Let’s be honest here – we all do it. We pretend to be so crazy busy #socrazybusy.

But the reality is we’re not putting our time and attention on the things that really matter. And I think doing it DIY is good for a little bit. But if your business is really going to be sustainable, if your business is really going to grow, you have to shift out of this DIY mindset and cure yourself of this epidemic. And what that looks like is you have to stop doing everything yourself. And especially when it comes to things like legal or finances or accounting – this is the kind of stuff that I want you to start thinking about, how can I stop doing it myself.

It is not your zone of genius. As much as you love reading about the law and intellectual property, I’m sure you do that on the weekends just for fun. It’s really not where you need to be spending your time. And as you start making that shift in your mindset, whether it’s with legal, whether it’s with accounting, whether it’s with your graphic design, that’s when you’re going to start seeing major changes in your business because you are letting go of the things that you aren’t, it’s just not your cup of tea, it’s not for you to do.

With that said, one question I did get from a listener is how do I prioritize my legal needs? If feels like the sky is falling all the time and I need to do everything at once. This is a great, great question. And the answer is going to depend a lot on your specific facts and circumstances, unfortunately. But what I’m going to try and do is kind of give you a general high level sense of what are the different things you need to be thinking about, as you start growing your business.

Clearly, you’re here, you’re listening to this podcast. And so you are interested in the law and what that means for your business. And so for that, I commend you. High five to you, girl. But what I want you to remember is that these types of resources can only take you so far. And you’ll find that because sometimes it feels like you can’t get a straight answer. Well, the reason for this is twofold. The first reason is that if you’re posting in Facebook groups, if you’re, you know, just sending a quick email, if you’re doing all of these things, to talk to a lawyer and get a legal question answered, the lawyer can’t give you an answer, because they don’t have all the information. There are so many nuances that they need to consider and they need to have that benefit of that information. And that oftentimes, it requires that they get on the phone with you that maybe they review certain documents. So if you send me an email, and you have a question about a contract, but you send me, you know, one paragraph out of the contract, I can’t give you a specific answer that I feel comfortable with because I haven’t read the full contract. I haven’t had the benefit of talking to you. And yes, that one paragraph might mean something different when you look at the contract as a whole. Now, this isn’t just a ploy for lawyers to get you on the phone. And so they can charge you their fancy hourly rates. It’s because they can’t give you advice unless they have the information they need.

Also, I get how frustrating it is when they tell you it depends. It depends. It depends. It’s such a common answer to a legal question. And I remember when I was in law school, my professor told me that you’re always going to answer it depends, because it really does depend. There are so many shades of gray. This is not very black and white, usually when it comes to the law, and it does depend on so many different things. And that’s why it’s so important that a lawyer has the opportunity to get all that information before they can give you their expert legal opinion.

So now that I’m off that soapbox, let’s go back to the question, which is: how do I prioritize my legal needs? Now, there are two ways that I like to think of approaching the law. The first is being proactive, so this is doing things and fixing things, or putting things in place before it becomes a problem down the road. And then the second is reactive. So this is where maybe you are the subject of a lawsuit, maybe you have received a cease and desist letter, you are now on the defensive. So the goal is to take steps in the proactive stage so that you never get in the reactive stage. Because the reactive stage can be very taxing both financially, but also emotionally.

Let’s say you are in the proactive stage, what do you do? I’m going to assume that you’re just starting out and there are basically a few buckets of things I want you to think about.

One of the things I want you to do is do research on what are the requirements to get your business started in the state in which you’re going to be operating your business as well as in the city or county. Now, of course, this includes assessing whether or not you want to be a sole proprietor, an LLC, a corporation, a partnership, you know, all that stuff that you find when you Google how to start a business. But it’s also what are the requirements in my local area that I need to comply with in order to start my business. So that’s one bucket.

Now with this bucket at a minimum, I want you to do the research to understand what are the requirements for me here in starting a business in this state. Now you may or may not decide to become an LLC or sole proprietorship. I mean, that is something I have other episodes on this. I’ll link to those in the show notes about what are the questions you need to be asking yourself when you want to make that determination of the correct entity. And so you can catch those as well. But these are just kind of foundational things, what do I need to do to just operate. N

ow the second bucket is contracts. I am a big fan of contracts for a number of different reasons. But with this bucket, I just want you to understand that it is so important that you start documenting your agreements that you have; your conversations that you have with other folks in writing.  And particularly in the form of a contract. I want at a very, very minimum, I would like to see you have some sort of client or customer service agreement in place. So if you’re going to be providing certain goods or services in exchange for money, even if it’s for free, I would still have some sort of an agreement in place and signed by all the parties.

Now the question then becomes, well, what contracts do I need? And see I’m so ninja like that. I already have a podcast episode all about it. So you can head on over to Episode 26 to catch that episode and the answer to that question. And I’ll also link that up into the show notes. T

he next bucket is I need you to get your online home in order. So this includes privacy policies, this includes Terms of Service, this includes making sure you understand what the can spam Act requires. And so again, I have another episode about all of this. And that is Episode 30. But I didn’t really plan it this way to keep referring you to other episodes. But in talking about this, I realize that we’ve covered so many of these topics in depth on the show that I want you to go back and listen to them or maybe revisit them if you feel like you need a little bit more information.

The next area is I want you to start assessing your copyrights and your trademarks and all of your intellectual property. Now, this is something that I want you to be aware of both on the sense of you protecting your own content from people infringing on it or using it without your permission. But also you need to be aware that you’re not infringing on somebody else’s content as well. Even if you’re not ready to file or register your trademark right away, maybe the cost is just too prohibitive for you, then I would suggest at least understand how this all unfolds. Make sure you’re not infringing on somebody else’s trademarks or intellectual property.

And finally, the last bucket of issues that you need to be thinking about is hiring. So when you are ready to hire – that might be on day one that might be in year three. Whatever it looks like for your business. Some bells need to start going off when you are ready to hire. The primary question you need to be asking yourself is – when I hire a worker, should this person be classified as an independent contractor or an employee?

And the reason why that’s so important is because if you improperly classify an individual as an independent contractor, meaning that they should have been properly classified as an employee, that can have major financial consequences for you, if an agency decides that they were improperly classified, and therefore requires that you pay some penalty or back taxes. Check out Episode 20 on the topic of hiring. And obviously, when you also hire an actual employee, there are a number of laws that you need to be aware of as you embark on that relationship. So those are things like Wage and Hour laws or their labor and employment issues. And those can be very, very state specific. So I encourage you to reach out to counsel in your state, or the state in which you are planning to hire that employee to advise you on what those requirements are.

So I just gave you the 100,000 foot view of what the legal issues are. And so the question of how to prioritize really comes down to it’s almost like a checklist, right? You go through each bucket and you think about have I addressed this Yes, done. And then you move on to the next, I would say at the beginning stages, if you’re not hiring an employee or an independent contractor, at a minimum, I would investigate what my obligations are as a business owner, in my country, in my state in my county in my city. So look at those requirements make an initial determination of what type of entity and I would get myself a contract, a privacy policy for my website, and Terms of Service for my website. And then everything else I would plan for as my business grows. So as mentioned, I do have plenty of resources available on the website that will give you some more detail about these different buckets or these different topic areas including other episodes of this show.

I also offer a variety of trainings over on the website that you’re more than welcome to check out if you want to dive in deeper into these legal topics and really develop an understanding of what your obligations are as a business owner as it relates to the law. So feel free to check those out as well. And also don’t forget you can always reach out to a lawyer – whether it’s me or somebody else. I encourage you to take that step to start building that team. Start building those relationships now, so that in the future if you need somebody if you have a question, you can turn to them as a trusted advisor.

You can grab all the show notes and all the references to all the different other shows over at annettestepanian.com/podcast/34. And please if you do enjoy the show, please take a minute to subscribe on iTunes or on Google Play and to leave a review. It really does help make a difference and helps get this show to the ears of other people who need it. So with that, said, my friend I hope you have a fantastic day and I can’t wait to talk to you later.

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