Business owners should seek professional legal help. In this episode, APU’s Dr. Aikyna Finch talks to lawyer Alan Hall who explains why it’s not the best idea to get all your legal advice from the internet.
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Dr. Aikyna Finch: Greetings everyone. I am Dr. Aikyna Finch, and I would love to welcome you to the podcast. Today, I am super honored to have a wonderful man in the legal field to come talk to us today about “Don’t Play Lawyer on the Internet.” So, today’s guest is Alan Hall. Alan Hall began his legal career in 1996 where he handled a variety of legal and business law services. He started his private practice in 2015 where he has served many in the Nashville community and abroad. So, with that being said, hello Alan. How are you doing today?
Alan Hall: I’m doing well Dr. Finch. How are you? I’m really glad to be here and excited to talk with you today.
Dr. Aikyna Finch: Yes. When I heard this topic, I thought it was amazing because we have all these different websites. You can go to all these things. You can look up on the internet. And when you mentioned Don’t Play Lawyer on the Internet, I thought this was very fitting. So, tell us why this is so important to you.
Alan Hall: Well, it’s important to me for a lot of reasons, but principally among those is to help folks understand, especially people that are maybe in startup businesses or in beginning stage businesses, to understand that legal costs aren’t really beyond their reach. Some lawyers very rightfully get a bad route for being too expensive and not meeting a customer’s needs. But in the long run, especially with as many lawyers as there are in and around our communities, in the long run, it’s going to be a lot better off to engage a lawyer to help you get that document that you need rather than going and choosing one off the Internet and changing your name in with the contract you got off the Internet. And I say that because oftentimes beginning stage entrepreneurs or business owners, they’re looking to cut costs because they’re very cost-conscious and they’ve worked really hard and long to get their product to market or their service to market.
And so, somebody says, “Well, we need a contract.” And so, they’re like, “Oh no, it’s just another thing I’m going to have to pay for.” And so, they run out to the Internet, and they say, “I need a contract.” And they find one and the first it says what it is that they think it is. And so, they print it off, they change the names and send it to the other party. The other party signs it and then things don’t go as planned or the other party decides not to pay or something happens, and now they find themselves needing to sue the other party, or they find themselves being sued by the other party and they begin to look at their contract or they take the contract to a lawyer and a lawyer says, “Well, this provision right here means that you’re going to have to pay all their legal fees,” or “This provision here means that you don’t really have a defense to what they’re saying.”
And so, that’s why I say don’t practice law off the Internet because you don’t really know. I mean unless you really know, I mean you may, but unless you really know what each and every provision of that contract that you’re snagging that used to be FedEx’s or used to be Amazon’s is right for your situation, then you could find yourself in a situation that you never even expected or imagined. So, that’s a very long answer to a very short question. And there are a whole host of iterations of that when it comes to raising funds or forming the business or even choosing what type of entity you want to be. There is array of opinions as there are businesses, but some are tried and true for a reason and those reasons are pretty legitimate and pretty usual.
So, what I tell beginning entrepreneurs all the time is, if you want to save money, number one, find a contract that you think suits your needs and then take it to the lawyer and say, “Here’s one that I think will work. Tell me why it doesn’t, or can you change this so that it will work?” And the other thing I tell beginning entrepreneurs all the time is the price is always negotiable with a lawyer. And if the lawyer won’t tell you how much it’s going to cost or won’t give you an estimate of how much it’s going to cost, then I tell folks all the time, find a new lawyer. There are just too many lawyers out there that will tell you how much it’s going to cost or provide you an estimate of fees and expenses before you get into it, to be stuck with somebody that won’t do that.
Dr. Aikyna Finch: And since we’re on that topic, what are some of the things we need to look for when we’re looking for a lawyer?
Alan Hall: Well, number one, how does the lawyer respond to you? If they seem too busy to take your call or to respond to your email in a timely fashion before you’ve even hired them, then that’s a red flag number one. Number two, if they won’t give you an estimate of charges or tell you what they think it might cost, then that’s a red flag. And then probably the biggest thing is if they don’t ask you to sign an engagement letter which sets forth what they’re going to do for you and you’re going to do in exchange for that, then go get a different lawyer. Because a lawyer who won’t put in writing what the service they’re supposed to provide and how they’re going to provide it is not somebody that I would want to do business with. And then find somebody you’re comfortable with. There are lots of lawyers and they may be the best at the thing that it is that you’re looking for them to do, but you just don’t connect with them.
And I think that a lawyer is too valuable of a member of a person’s team to have one that I don’t connect with. Because a very good business lawyer will help the client not only to see the issue that they’re looking to solve in the moment, but they’ll help them understand how that issue is going to play out down the road. And so, if you’re not comfortable with somebody or you’re just looking for somebody to do a discreet task, then you don’t really need a lawyer, you just need a scrivener. You just need somebody to describe the document for you. But a lawyer at their best is a partner with the business to help the business understand the ramifications of whatever it is they need the legal service for.
Dr. Aikyna Finch: Agreed. Agreed. And I love your candor, and I know that the audience will as well. And so, let’s talk about, because right now we have the different services where you pay the subscription and then they’re supposed to be able to handle all your business needs. So, with that being said, why is it more beneficial to have a lawyer instead of a subscription or something you found on the Internet?
Alan Hall: Obviously, I have some self-interest here, so I don’t do subscription services. And the reason I don’t do subscription services is I’ve figured out that they’re not valuable for the client. And honestly, they’re too hard to price correctly for me. Some lawyers may have subscription services that work perfectly well, and clients may be happy with them, but I’ve never been able to successfully do it such that it makes sense for both me and the client. I mean, I’m obviously in this to make a living and that’s what I’m going to do, but I’m going to charge a fair price for my services. And I’ve just found that this subscription service, if you don’t use it, then you’re losing that money. And then, if you do use it, and most of them that I’ve seen, if you use it past a certain amount, you have to pay extra for that anyway.
So, you can get the same thing with a lawyer that you “have on retainer”. And since I brought that topic up, let me just speak to that a little bit because it’s kind of like the subscription service. People think, “Well, I have to have a lawyer on retainer, and I have to send them money every month so that they’ll continue to be my lawyer.” And that’s a myth. You don’t have to do that. The legal world doesn’t work that way anymore. Find a lawyer that will bill you for the service each time you need them. Now, they may charge you a retainer that will stay in their trust account and they bill against that. But if the lawyer’s telling you you got to pay a thousand or $500 every month and you get a certain access, it’s probably a better deal for them than it’s going to be for you.
Dr. Aikyna Finch: So, what are some of the things that we need to be looking forward to as far as when we are getting the lawyer and getting the services that we need for our business? Because every business is different, so what should we be looking for?
Alan Hall: Well, that’s right. Every business is different. And so, when you’re looking for a lawyer, you want a number one, somebody that a lawyer that says that they do general business advisement is probably going to meet 75 to 80% of your business needs. When you get into specialty areas like medical or things that are highly regulatory or music business or things, trademark, patents, those sorts of things, then you need to go and find a specialty business lawyer that maybe focuses in those areas. But for 75 to 80% of a business’s needs, just a good general business attorney will be able to help with the formation, will be able to help with reviewing and drafting contracts.
And those are sort of the basic building blocks of the business. You want to make sure you have your entity formed if you’re going to be an entity and you want to choose what type of entity you want to be. And so, your lawyer’s going to help you make those decisions. And then you need to decide, okay, do I need some sort of contractor? Do I need a disclaimer or what do I need in those terms? And just a good general business lawyer is going to help you do those things and be a valuable part of the team going forward.
I like to say it like this, you want to find a business lawyer who can take you from the cradle to the grave, that can help you start, and then at the end of the day when you really hit the big time and you want to sell and cash out, they can do that for you too. And my personal philosophy is, if your business lawyer doesn’t litigate, then it’s okay because a lot of business lawyers don’t litigate, but they’re not just aware of where all the traps are usually.
And so, that’s why I like to say I have a litigation bag and I will travel too. But those are sort of the main things that if I’m looking to hire a lawyer, what is it? What’s the need? And then, who do I pick? And so, I decide who I pick because I call somebody that I know and trust and they’ll say, “Well, this is the person we use for this.” Or they’ll say, “I don’t know. I’ve never used a lawyer of that type, but this person I know does.” And this is why our networks become so important when we’re starting up. I mean, it’s not just about what somebody can do for me in the business sense, but it’s who those people know and who they can connect me with from a variety of professional services, from lawyer to accountant to insurance, all of those sorts of things.
Dr. Aikyna Finch: Let’s touch on scams because some people just don’t know, and they will sign up for something that they just don’t know about. So, what are some of the scams that are going around right now that we need to be aware of?
Alan Hall: Well, my current favorite one, and they tried to get me with it just last week. It was really fun. It was fun because I was kind of bored that day, and so I knew it was to scam immediately when they called. But the sheriff’s office called me and said that I had missed a summons for jury duty and that I needed to come down and turn myself in or be arrested. But oh, by the way, if I didn’t want to come down and book myself into the local jail, I could go over to their bonding department, and they would bond me out over the phone and then I would have to show up at a later date and it would all be okay. And so, naturally that’s a scam.
Number one, you’re never going to get called over the… And they make it seem legit. They’ll say this is so and so with the sheriff’s office, and they’ll leave you a number to call back. And it sounds legit because you have to press a number and ask for the warrants division, and it’s a very good scam, but they’re never ever going to ask you, the real sheriff is never ever going to ask you for a credit card over the phone to get out of a jury duty summons. That’s my new favorite.
And this last one, I played along with them for a good long while, and then I finally called because I had them agreed to come meet me somewhere. And I called the Franklin Police and I said, “Well, I’ve got these scammers coming to meet me.” And he said, “Well, I appreciate you doing that, but they’re not really going to show up. They’re not here.” So anyway, I spent and wasted my time trying to scam the scammers, but it was fun.
That’s probably the biggest scam that’s going around that catches most people right now, but for businesses, the big thing is emails. They’re going to look real. They’re going to seem real. They’re going to be from somebody you know and trust. And then, it’s going to ask you to open a PDF or some other document and you’re going to do it and you’ve just put a Trojan horse on your computer. So, when I always get some sort of weird thing from somebody that I’m not really expecting, because that’s usually who it comes from, then I call them up and I say, “Hey, did you send me this?” And they’ll say, “No.” And then I know it’s spam. And so, the other little trick I use to filter it out the spam is you go, and you look at the email address and see who it’s actually from, not just the name that’s up there. And that gets a lot of them if your spam filter misses them. I fell victim to a scam myself early on in my practice, and I like to say it scared the LLC right into me so.
Dr. Aikyna Finch: Well, I love that piece, it scared the LLC right into you. And so, that is some of a lot of questions that people ask about their business. So, proprietorship, LLC, formulation, should we use a lawyer? Should we use a company? What say you?
Alan Hall: Well, since I’m a lawyer, I’m going to say you should use a lawyer. But let me say this, if you’re a single member LLC, if you’re going to be a one person LLC, then go form it yourself. It’s going to cost you $307.95 over the Internet or get a lawyer to form it for you or talk to a lawyer about forming it because there are certain things that you need to know the answers to before you form it, and get the answers to those questions, and then you can form it yourself. But what I would say more importantly is if there is more than one member in the business, then you definitely want a lawyer to form it for you because… And you want to be able to have the hard conversation about what are we going to do when we need to get the business divorce? Because if you don’t think about how you’re going to wrap up the business when you start the business, then it’s doomed to fail.
It’s doomed to be a bad situation on the back end. As you probably know Dr. Finch, and you’ve got probably better statistics than I do, but over 75% of businesses that start don’t survive. So, the odds are long that you’re going to make it in the first place. So, if you don’t walk into a venture knowing how you’re going to wrap it up, then you’re setting yourself up for a contentious process on the back end that could have been avoided for a simple $1,500 legal fee to form the business on the front end and get a good operating agreement. You asked, I don’t want to miss this part of the question, and you asked that on sole proprietorship or LLC. And what I say to folks all the time, or even partnership, if your business has risk and you don’t want your personal assets at risk, then you need an entity.
I think the entity of choice in Tennessee right now is the LLC. And I think it’s the LLC for a lot of reasons. But if you don’t have any risk and you’re not worried about your personal assets being at risk, then be a sole proprietor. But if I’ve got risk and I don’t want my personal assets at risk like what happened to me in that scam, then you need an entity just to make sure you keep your personal assets separate from your business assets. And that’s the other thing that I see most often is when folks form businesses, they don’t treat the two separately. And that’s the quickest way to pierce the corporate veil as it’s known in legal terms. But the quickest way to get your personal assets back under and at risk is to not treat your business like a business. And what do I mean by that? I mean have separate bank accounts, pay yourself a salary, all those sorts of things, so that my personal stuff is not getting co-mingled with my business stuff.
Dr. Aikyna Finch: That was some powerful information. A lot of people don’t know it, about that. So, if we were to wrap all of these things up about what not to do as far as playing lawyer on the Internet, can you give us a rundown?
Alan Hall: Yeah, I think number one is don’t take a contract that even has the title that could be the exact words that you need a contract for and assume that it’s going to meet your needs. And number two is don’t believe what somebody says, no matter how many reviews they have, no matter how high they show up in the SEO rankings of this is what you’re supposed to do without checking it out with a live human being that you’ve actually interacted with. And then number three is, as you know and as we all know these days, not everything is what it seems on the Internet. And so, buyer beware.
Dr. Aikyna Finch: Well, I definitely love that. So, as we come to a close, do you have any final nuggets that you would like to give to the people?
Alan Hall: Well, what I would say, I think, and it’s really what I want people to know about lawyers and the legal profession. And if your lawyer doesn’t seem like a part of your team and out to help you, then I’ll say, like I say to all of the classes that I teach, find a new lawyer. There are too many good lawyers out there that want to provide good service at a reasonable price for you to be stuck with somebody that seems like you’re a burden to them.
Dr. Aikyna Finch: So, to the audience today, pay attention to what Alan Hall said today. Remember that if they’re not on your team, if they don’t make you feel that way, if you don’t feel supported, find someone who does do that for you because at the end of the day, you deserve it, and your business deserves it. So, I am Dr. Aikyna Finch. Be safe and be well.