Episode 008: Q&A 4

On this episode, I discuss the answer to the question: "At what stage does a business need a lawyer on call and what does that cost? Asking for a friend with a lot more money than me (My future self.)"

The short answer: As always, it depends.

Areas where I don’t recommend DIYing at all. Trademarks, partnership stuff, patent, and complex and or high dollar contracts.

Otherwise, time is money. Do you have the time, and do you have the money?

Most attorney bill clients in 10ths of an hour. That means that a lawyer who charges $300 per hour would bill $60 for a 12 minute phone call.

Some attorneys, like myself through my law firm, now offer “outside counsel services.” Basically, they’re your on demand attorney for some monthly rate.

That’s a great option if you need regular legal assistance. Otherwise, having a go to person for guidance is a better alternative.

In my education based business, I actually started offering an alternative to outside counsel. In the Unfuck Your Biz Membership, you can get all your questions answered each month on live Q&As + access to all my bitchin guides and trainings.

The idea to is provide guidance on legal and tax topics when you need them without charging an arm and a leg.

Episode Transcript

Braden: (00:01)
Hello and welcome to episode eight of the unfuck your biz podcast. My name is Brayden and I am your host. Thanks so much for joining me. Today is going to be another one of our short episodes. If you haven't already tuned into the previous episodes, then you might not know our general structure here. So I'll give a little bit of a breakdown each even episode. So this is episode eight. So six, eight, 10 are shorter format shows where I answer questions that are posed in my Facebook group. So if you join the group, it has called Brayden's besties and B, R a, D E N apostrophe S. freedom's besties upon uh, requesting you to join. You'll get three questions. The first one is for you to ask me a legal or tax question that you have in your business. I then save those and answer one on each of these podcasts episodes.

Braden: (00:55)
So the question we're going to be tackling today is at what stage does a business need a lawyer on call and what does that cost? I'm asking for a friend with a lot more money than myself. That friend is my future self. So first of all, love the positivity. Whoever posted this one, we are all striving to get to a point where we can incur expenses that will make our lives much easier. But meanwhile, of course it's very important to be savvy with our money. Really I should say it's always important to be savvy, but uh, time is money. So if you have a little bit more time right now, you can DIY some more things. So to dig in here, I want to give a little bit of context about the industry as a whole and how most attorneys operate the way some newer attorneys operate.

Braden: (01:42)
And then the way I really operate my business, so most lawyers charge on an hourly basis. So if you have a go to attorney, let's say you call and you ask to schedule a meeting, they say sure, you get on a phone call, you talk on the phone for 12 minutes, that is two tenths of an hour. So attorneys actually bill typically intense of an hour. So in six minute increments, if you have a three minute phone call, they're going to round it up and then they charge an hourly rate. So if their hourly rate is $300 like reaching into, it would get my calculator now at their hourly rate is $300 and they bill you for two tenths of an hour, that would be 20% so then your bill would be $60 for that 12 minute phone call and they would send you an invoice. That's how most lawyers operate, especially those in litigation.

Braden: (02:37)
The new kind of trend is for attorneys to do flat feet, flat fee billing. So saying, I'll do your contract for $1,000 I'll do this scope of work for 500 at this scope of work for 2000 and that is more in alignment with, I think the way a lot of more modern service based businesses operate, more likely than not. And I try not to pin everything to age, but if you know an older attorney, or we should say an attorney that's been practicing for a while, like over five or 10 years, they're probably gonna do the hourly method. If you speak with a more modern attorney, a modern being that they haven't been practicing that long, or they just take a more modern approach and their philosophies, then they're likely going to do flat fee billing. So the question really is, do you need to spend the money on legal services?

Braden: (03:30)
And the answer is it depends. And pretty much all circumstances, it's a good idea to work with an attorney. Not everything requires an attorney. So a lot of people I talked to one at DIY, their LLCs, that's not a terrible idea. But what a lot of people don't realize is that the LLC formation, the actual document that you filed the self is extraordinarily straightforward. It's basically your name and your address and your business name, what you're not getting when you don't pay someone is the strategy behind what, which business name should I choose? Am I forming it in the right state? What time of year should I form it and am I going to incur extra expenses by doing it in this quarter versus this quarter? Am I going to want to elect S-corp status on my LLC? All of these strategic questions. And then in addition, the other legal bits and pieces that are missing, if you DIY at like your operating agreement, meeting minutes, structuring your bank account correctly, all of those types of issues.

Braden: (04:27)
So for more simplistic legal matters, my philosophy, more or less as it's always great to pay for knowledge, basically a consultation, so get some legal expertise. But that doesn't mean that you can't DIY a lot of the tactical pieces. So I'll do a lot of strategy sessions with clients to tell them all the stuff that they need to do, give them the answers to the questions they need to have and then they can pay me to draft some of the more complicated legal documents and all tell them all of the licenses they can DIY in order to save somebody. So ideally you want to find that some sort of stances like that areas where you just don't want to DIY our trademarks. I see a lot of people who will try to sell file trademarks and they end up messing the app up the application because there's a lot of strategic concerns that they are not concerned with.

Braden: (05:20)
Because if you don't know what you don't know, that's kind of the foundational problem point there. So trademarks are a big one. If you DIY it and mess it up, it's going to end up costing you more money in the long run to work with an attorney to untangle the problem. Patents are another one. Um, I don't even know if people try to DIY patents to be perfectly honest. It would be a nightmare probably to do that. So there's that for ya. Uh, partnerships as well. So if you're doing a single member LLC, you can get templates for operating. Raymond's, I sell one on my website and a lot of the other documents you need, if you have the strategic guidance, you can pull all that together. Partnerships are a different story because you need to have provisions on what's going to happen if one partner is sick and can't pull their weight on the business for legitimate reasons.

Braden: (06:12)
What happens if they're just not pulling their weight for a non legitimate reasons? They're just not doing the work. What happens if one partner gets divorced and now that partner spouse is trying to get ownership interest in the business? There are all of these types of concerns that you can't properly address really via a template. You need to work with an attorney to get yourself set up. Another thing with partnerships is that you just don't really see the pitfalls ahead of time. So going to an attorney, it's almost like preventative counseling. They're going to tell you all the shit that can go wrong. And then just by having a conversation up front, you are better positioned to deal with that when it comes up. Because a lot of the issues with partnerships just revolve around communication and knowledge. So if you know what can happen and you know how you're gonna communicate issues, that'll solve a lot of problems.

Braden: (07:08)
So that's just a sampling of what I do and don't recommend DIY contracts are another big one. Um, I never suggest drafting a contract from scratch on your own. If you've been start with a really solid template, then you can add some subtle tweaks if you need to. If you need to add whole provisions, then work with an attorney in your state to do that. So now that I've kind of broken down what you can and what you really shouldn't be DIY saying, let me tell you when I think it's an ideal time to have a go to attorney. So my core values and my business are, number one, the legal and tax stuff doesn't have to suck. You're the CEO of your business. Other people can help you, but no one is going to take the ownership of your passion as seriously as you do.

Braden: (07:57)
But the good news is, is that it doesn't have to be totally awful. I'm never going to promise you that these legal attacks topics are going to be as interesting or as fun as Pinterest or social media marketing. But I promise that I will assure a ship try. So if you tune in, I'll give you the best information I have. Also, I'm my second core value is what? Like as hard. So if you don't already know, I'm kind of obsessed with legally blonde. If L can do it, you can do it. And law school, my mantra was just that if Al can do it I can do it and if I can do it. So can you trust me. You are a smart cookie. I know it. I work with a lot of small business owners that kick ass. They know a lot of stuff about a lot of stuff, but you don't need to know what subject matter jurisdiction is in order to kill it.

Braden: (08:45)
So you know that scene in the beginning, Ellen gets asked what subject matter jurisdiction is. She hadn't read all of our textbooks ahead of time like Hermione Granger. So she got booted out of class and law school actually can be like that, but business is not, you don't need to know all the details. Just know that you need a resource to give you the details. And that's why I'm here. My third core value is you don't need a corner office attorney or legal zoom to get legit. Getting good advice is not necessarily cheap, but that that does not mean that you need to hire a boring asshole to mansplain to you in his suit while you swallow your rage. Staring out of his 39 story window, you can also get some more direction than what's offered via online filing services. So my business bottles basically structured as follows.

Braden: (09:33)
I have a law firm, Braden Drake law, where I offer one-on-one services for small business creatives. And then I have my online business for even Drake LLC, which you can [email protected] and for pretty much every area I operate in except for the ones I mentioned earlier. I offer a one on one service or a DIY service. So if I didn't specifically mention that you shouldn't be DIY on something, then you probably can. And then you look at the different service offerings and you say, well, do I want to pay breathe in $1,500 to set up my LLC? Maybe that sounds too much. I want to choose the DIY option and take Brayden's force legally launched to get all of the templates I need and all the direction necessary to set up my business. So that's basically an overview of my business model, a lot of attorneys. And now I'm also offer what's called outside counsel services.

Braden: (10:27)
So if you've ever walked worked for a large company, you're probably, or just you have general world knowledge, you probably know that most businesses have what they call it in house counsel. So those are attorneys employed by the company and they pay them, you know, normal attorneys salaries. If you're a small business owner, that's not going to be in your budget and you probably wouldn't have enough work for them anyhow. So now attorneys offer outside counsel services. So the idea is that you pay them on a monthly recurring basis. I've seen anywhere from 3000 or 300 to a few thousand dollars a month. And then they're there to handle any kind of legal issues you have, which is great because they know your business very well. So I offer that service and my law firm, it starts at $300 a month and people contact me on a regular basis for any questions they have.

Braden: (11:16)
But I saw there was a need for a DIY wires and people who didn't have that in their budget to get their questions answered. So I launched the unfuck your biz membership, which is similar, but you don't get one on one help, you get help in a group setting. So access to a private Facebook group. And then I do monthly Q and A's to answer any questions that pop up. So that's kind of the solution. Two people, uh, like our question here, I'm gonna read it back in a little while. It was at what stage does the business need a lawyer on call and what does that cost so it can cost a lot. Um, the membership that I launched starts at $39 a month. I have two different tiers. So you can join it and that is a great option if you need some help implementing all this stuff.

Braden: (12:07)
So you're on a DIY or LLC, maybe you're going to sign up for my course. You have questions on your contracts every once in awhile, but you don't want to work with an attorney that's going to bill you that $300 an hour, the 60 bucks for the 12 minute phone call. And you also don't want to pay $500 a month for a dedicated attorney. That membership is a great option. So I didn't intend for this to turn into a full on sales call, but I thought this would give you some context on how cost effective legal services can be and when you need an attorney for yourself. So as always, if you have any questions, shoot me a message, you can DM me on Instagram. I'd also love to see you in the Facebook group, Brayden's besties join there, and then you can give your question that we might eventually discuss on the podcast. Thanks for tuning in and I will be back with you in the next episode.