Making It Legal:

Q: How much does a lawyer charge to look at a lease?  I am trying to figure out what is important.  I was hoping you might be able to give me some insight.

A: Lawyers’ fees to review a lease generally depend on the amount of time it takes to do the job.  That, in turn, depends on a number of factors, including:

• The billable rate of the attorney
• The length of the lease (or sublease) . . . which is often a reflection of the size (and quality) of the space, the amount of the base monthly rent and the sophistication/experience of the landlord
• The kinds of provisions that may need to be added to the lease to protect you
• The extent to which you want the lawyer to be involved in any negotiations with the landlord, which reflects the extent to which you have been provided with a “take it or leave it” offer from the landlord.

Some attorneys may be able to do the work for a fixed fee, so be sure to ask them if they’re able to perform this kind of service on a fixed-fee rate.  If not, you can certainly ask for an estimate based on the scope of the lease and their billable rate.

Okay, I get it.  We’re a big ticket item.  We come with a bad reputation.  We can be nasty and ugly (although I’m kinda cute) and speak in a strange jargon . . . where it seems we’re deliberately trying to play intellectual one-upmanship games with you to let you know who’s the smartest guy/gal in the room.  You’d rather undergo root canal without anesthesia than deal with one of us.

And yet.

And yet, we can be your greatest support system.  Your protector.  The cool head prevailing when you’re ready to lose your mind.  The one who talks you down off the ledge.  And maybe (if you’re lucky enough to work with me), we’ll tell you a joke or two and make you laugh, so that you realize the world won’t come to an end if that truly awful deal doesn’t close. 

In his article in the New York Enterprise Report, Daniel Abrams identifies 10 ways you can get the most out of your attorney.  But before you reach that point, you also need to be sure you’ve chosen the right one for your business.  My program, How to Choose and Use Attorneys, available through GreatBusinessLawResources.com, can show you how to do just that.  Like dating, you want to be sure you have the right chemistry with your attorney so that you’re comfortable being vulnerable and exposing your not-so-perfect qualities/decisions.

“Why can’t I handle my own patent/trademark/copyright filings?” you ask.  “I’m getting started on a shoestring–do I really need to spend the legal fees?” Go right ahead and DIY . . . but if you’re not on target about what you’ve done or how thoroughly you’ve handled your background research, you could find that you’ve dumped a lot of money into IP that you simply can’t protect.

Listen in to my interview of Amy Goldsmith, Esq., an  intellectual property attorney and partner at Gottlieb, Rackman & Reisman, P.C. in New York City. Amy gives us the lowdown on:

• Why you can’t “patent” a company name (you trademark it)–and why it’s important to get the terminology straight
• What kinds of trademarks pass muster with the Trademark Office
• How a trademark search (done by professionals) will unearth possible obstacles you never dreamed of  . . .  and save you time, money and energy

If you want your intellectual property to become a valuable company asset, listen to this interview!

“Can I? Can I?” I hear you asking. Well, you’re asking the wrong question. The issue is not whether you can download your client contracts from the internet, it’s whether you should.  And once you do (because you know you’re going to do it, right?), how can you get the best use out of doing so?

Downloading agreements from the internet is good for starting to educate yourself about the kinds of terms you might want to include in agreements with your clients. But here are two significant things the online agreements (even the ones you pay for) can’t tell you:

• They can’t tell you whether there are any provisions in the contract that could hurt you.
• They can’t tell you whether there are any provisions that are missing that could help you.

Poke around the internet all you like; but in the end, only you can decide which business terms are best for you. What specific products or services will you provide to your clients? Within what time frame do you want to be paid? What happens if you’re not paid in a timely manner? Have a look at my program, How to Train Your Clients to Pay You, to get the lowdown on the important decisions you’ll need to make. And once you’ve made those decisions, have your attorney wrap them up in a nice, neat legal bow to protect you properly.

Non-disclosure agreements (NDAs) have many uses. You may have a fabulous idea and want to protect it as you share it with potential investors. Or you may be on the receiving end of one, as this article, “How to Speed Read an NDA,” anticipates.  Written by my colleague, IP attorney Terence Church, Esq., the article gives you a brief rundown of the top six issues you’ll want to see in any NDA you sign. 

Of course, this leaves aside the issue of whether you really should be doing business with someone who shoves an NDA under your nose 2 minutes before you’re about to begin a meeting with him or her and expects you to sign it without the benefit of discussing it with your legal counsel. If he or she won’t give you the time to review it carefully (assuming you’re an entrepreneur who takes her contract obligations seriously), you may want to take your business elsewhere. If you’re in a line–or at a stage–of business where NDAs are common, speak to your attorney to get guidance in advance about how best to handle these kinds of situations if they arise.

It’s been a while since I received one of those e-mails SCREAMING IN ALL CAPS from the Kingdom of Djibouti or Nigeria, or some such place, asking me, in the most solicitous of tones, to assist with a financial transaction. A money trade of sorts. Or to help dislodge some funds from a U.S. bank account that need to be routed through my account to send overseas. They always gave me a good laugh. The cynical New Yorker in me asked, “What tomato truck do you have to fall from to fall for that scam?” [For fullest New Yorker effect, pronounce tomato like "tuh-MAYD-uh"]

Well, apparently, the scammers are getting more sophisticated, and some of my bretheren at the bar have fallen for it. As reported in the California Bar Journal:

The scammers know how to delay confirmation that the cashier’s check is not good long enough to get the client trust account money into their own hands, says Ted Kitada, senior counsel for Wells Fargo & Co. They do that by changing the nine-digit MICR (magnetic ink character recognition) lines at the bottom of the check. The bank check may say Citibank, but the code recognizes the check as from, say, a Dallas financial institution.

“Wrongdoers deliberately put misinformation on the MICR line to cause the item to be misrouted,� says Kitada. “Misrouting causes a delay in the processing of the item.�

In defense of those attorneys who got conned, their practice sometimes includes international transactions (so the solicitation was not totally out of line). Also, their initial due diligence appeared to show that the overseas companies (Hong Kong, as reported) were legit.

The lesson: For any of you dealing with overseas payments by cashier’s check, beware. If you have to transfer any funds back overseas to a client, do not be pressured into returning the funds until you are absolutely, positively sure they are there . . .  and have had a few days to sit in your account quietly (without being returned).

Did you know that yesterday was Law Day? I suppose that for many of you, the day passed with nary a whiff of the incredible celebrations to be had. Parades in the street! Inspirational speeches! Revelry! Bar associations around the country use it as a day to celebrate community and the importance that law plays in it.

50 years ago, May 1 was designated by a joint resolution of Congress as the official date for celebrating Law Day. Originally established by President Dwight D. Eisenhower (by proclamation), Law Day is a national day set aside to celebrate the rule of law and how the legal process contributes to the freedoms that all Americans share.

Before you start to tear your hair out about the ways that laws have complicated your life, take a moment to think about the ways that law has made our society great. People from all over the world risk life and limb, and leave their families behind, to come here. Laws contribute to this being the “land of opportunity.”

Law Day is not just a day to make lawyers feel good about themselves–if you think about what the world was like in 1958, when Law Day was first established, we had emerged from the ashes of World War II, seen two wars in the Middle East, gone in and out of Korea and watched the French get defeated in Vietnam. The U.S. Supreme Court case Brown v. Board of Education (”separate does not mean equal”) had been decided only a few years before and opened the door to significant social change in this country. Law was (and can still be) a way of righting a terrible imbalance of tyranny and unfairness.

We may debate whether laws are wise, necessary or fair, but few would dispense with them altogether. We use laws both to provide our freedoms and to protect our freedoms.

And now, I’m free to get off my soapbox and enjoy the rest of the day!

This week, I received a frantic call from “Rosie,” who had been referred by a colleague of mine. She plunked down a huge chunk of change (well into the five figures) to buy a day spa from the current owner. The seller told her he wanted to get out of the business because he wanted to retire. Of course it generated more than enough to meet its expenses, he cooed. It’s a great business, terrific location. The seller didn’t want to get lawyers involved: “They always complicate matters.” Rosie wanted to do the deal without laywers, too– it’s cheaper that way. So she bought it–the business… and the seller’s lines about the health of the company.

Turns out, there was very little the seller told her that was true, smooth operator that he was. And Rosie fell for it, hook, line and sinker. What didn’t she do?

• She didn’t ask to see the financials to verify his rosy (no pun intended) reports.
• She didn’t ask to see the lease for the premises to verify arrangements with the landlord.
• She didn’t ask to see the corporate documentation, verifying the seller’s ownership of the company.

Rosie wants out, but getting her out of this deal now is like trying to get milk out of the coffee when you realize you should have had cream. She can’t afford proper legal help because she sank her money into the deposit and on shoring up the ailing business.

As Twilight Zone creator Rod Serling would say: “Offered for your consideration.” Rosie rushed into the deal without guidance from an attorney or any other professional advisor. For whatever her reasons, she had to have this particular business now. For want of spending a few thousand dollars to make sure she got good advice and had seasoned experts watching her back, Rosie is now facing the possible loss of tens of thousands of dollars (that is, a perfectly good down payment that could have been put to better use), additional tens of thousands to get the business up and running (which should already have been up and running), and tens of thousands in possible litigation fees (to either sue the seller or be sued by the seller should she choose to walk away).

So I ask you: When you do the math, is it worth it not to get lawyers involved?

I may have mentioned in this blog the joke about the doctor and the appendix surgery: A man goes to the hospital to have his appendix removed. He receives the surgeon’s invoice for $10,000, and calls up the surgeon, furious. “How could this operation possibly have cost $10,000?” he screams. “I want to see an itemization of the costs of this procedure!” The surgeon responds with an itemized bill: $1,000 for making incision; $9,000 for knowing where to make incision.

I’ll leave the issue of how important it is for professionals to disclose their fees to clients in advance for another post. For today, however, I have another lesson: Sometimes, you get what you pay for. And if you pay nothing (or very little) for legal services, you may get just that.

This came to mind because of a recent article in The New York Times. Two brothers in Colorado have been accused of duping clients in a long-standing (15-year) fraud by running companies that claim to be a “legal aid” referral service, offering to “help you through the legal process.” As reported by Kirk Johnson,

Some victims wired money in exchange for legal help that never materialized, Ms. Martinez said. She offered the example of a Texas woman, Kristy Matthijetz, who sought help in a child custody case and paid a fee of $525. Ms. Matthijetz was told that a lawyer would meet her at her hearing, but the lawyer never appeared. She spoke for herself in court and ended up losing custody of her daughter.

A word to the wise: Unless you’re dealing with an attorney you have met or who comes recommended, do a little digging to make sure he or she is really an advisor who can meet your needs.

Far be it from me to turn away business (actually, I’m not), but there really are times when pre-paid legal services could be a better option for your business than hiring a firm and paying the higher rates.   

A pre-paid legal plan is like legal insurance.  You’re provided with some services at no cost (except for your monthly membership), some services at a reduced rate.  If most of your company’s legal needs involve quick consultations, pre-paid legal could be a convenient solution.  One of the drawbacks, as reported by Tina Dettman-Bielefeldt, Chairman of the Green Bay (Wisconsin) chapter of the Service Corps of Retired Executives (SCORE) is that you can’t necessarily request a particular attorney.  As a result, you don’t have the same opportunity to work with a trusted advisor who knows about your business and its goals, who can work with you proactively.   

Also, there are many companies offering pre-paid legal plans, and some may be less-than-adequate.  Ask for references, and research the companies before buying the coverage. 

OK, I’ll confess that my feathers are a little ruffled today (maybe a case of a bad night’s sleep), but seeing Guy Kawaskai’s Top Ten (Sixteen) Lies of Lawyers just stuck in my craw.  I can handle lawyer jokes just fine, but after seeing so many entrepreneurs shoot themselves in the foot because they were too scared/cheap/undercapitalized to seek the expert legal advice they really needed, after a while, enough is enough.  Lawyer-bashing is certainly not a recent phenomenon, but its prevalence is like watching The Flavor of Love:  first, it’s dopey entertainment; then, it becomes just plain stupid; finally, I just want to smash the television for projecting this nonsense.  (That’s when I yell at my husband to change the channel). 

I’m not saying that lawyers are perfect or immune from these things (and I thank fellow Entrepreneur blogger Tim Berry for putting a soft touch to the issue), but remember this:  Lawyers get lied to, too.  So do other service providers.    Here’s the top 10 lies I’ve been told over the years.  For entrepreneurs, all I can ask is:  don’t be these people.  Service providers will probably nod their heads in recognition: 1.                  “I’m eager to get started right away.�  So am I.  Is your initial deposit for fees as forthcoming as your desire to get started? 

2.                  “I just need something simple.�  I know you’d like something simple, but when you’re entering into a strategic alliance with an out-of-state company to market and develop intellectual property to children, there are a couple of issues that need to be handled delicately.  A one-page agreement won’t protect you.3.                  “I need this done yesterday.�  No, you don’t.  Unless someone is about to hang on Death Row, or you’re going to run up against an inviolable statutory deadline, it’s not an emergency.  Not that I’ll sit on it, but working until 3am because you woke up yesterday and decided you needed to sell your business today is not my problem.  Your failure to plan is not my emergency. 

4.                  “This wasn’t my fault.�  There are at least three versions of a dispute:  yours, theirs, and The Truth, which lies somewhere in between.  It’s exceedingly rare that someone has been an angel from heaven and the other side Hades Incarnate.  If I don’t know your downside, it’s hard to advise you properly.

5.                  “The last lawyer was an idiot, but I hear you’re terrific.�  I’m not a gambling woman, but I’d bet odds in Vegas that you said that to the last lawyer, too.  If you’ve hired and fired more than one other person before me for the same project, you’re probably no better than my philandering college boyfriend who left a trail of broken hearts.  And unpaid debts. 

6.                  “This company will be huge and have a lot of work to throw your way.�  This is usually raised in the context of trying to get me to reduce my rates.  There’s a reason it’s called a “volume discount�:  you provide me with the volume first and then I’ll give you the discount.  When I give the discount first, I’m usually left hanging, waiting for the volume.   

7.                  “The bookkeeper didn’t come in this week/month/quarter/had a death in the family.�  And that paralyzes your hand from writing a check?

8.                  “This wasn’t what I asked for.�  Usually said after a client has changed her mind 37 times since the beginning of the project. 

9.                  “This cost me a lot more than you promised.�  Did I really promise?  Did I guarantee a fee?  No, I estimated, based upon the amount of time I thought would be involved.  Time expands to fill the number of changes you request to a project.  See mind changing, #8.

10.              “I sent the check last week.�  Need I say more? 

Do-it-yourself legal sites drive me crazy.  I came across a DIY legal site called Negonation this week – yeah, OK, it’s in Brazil, but the principle is the same.  It touts a “get-your-contract-off-this-site-and-avoid-legal-feesâ€? service.  It claims that “its contracts are legally enforceable in the offline world, even if the parties are in different countries.â€?  That’s quite a bold claim.

Online sites don’t necessarily empower the lawyer in all of us.  What they do is delude many people into thinking that they have an “inner lawyer�.  Not everyone does, and that’s okay.  I don’t have an “inner doctor� –- if I have a medical need (even a regular check-up), I get help.  I don’t have an “inner accountant� – I make sure that I have one on call who can provide guidance as to how I should handle my financial statements and taxes.  I am who I am:  anal, cautious, and detail-oriented (among other things).  That makes me perfectly suited to being a lawyer.  I am not cut out for many other professions, and that suits me just fine.  I’ll leave those areas of specialty to the experts.

What’s dangerous about these sites is the false sense of security that entrepreneurs get from taking legal agreements from the Internet, without having the background or training to fairly evaluate whether what’s in the agreement is in their best interests, or whether there are other things that should be in the agreement that aren’t.  There’s no one affiliated with the sites who will give you the legal advice about your specific situation –- they’re just selling you a product (the agreement).  Take it or leave it.  They don’t take your own needs into account when creating the agreement –- it’s an off-the-shelf product. 

It would be like walking into Bloomingdales and buying a suit without looking at the size.  You know you need a one, but if it doesn’t fit properly, you could end up spending more for alterations than you paid for the suit.  Getting the right legal protections in place for your company isn’t just a matter of one-size-fits-all merchandise. 

Lawyers provide a hybrid:  product and service.  And it’s the service you receive that ensures that the product truly meets your needs.  For more guidance, see my article “What You Should Know Before Copying Contracts from the Internet.�