Lawyer Responds to Photographers’ Problems

“Photo Shoot” by Cliff from Flickr (Creative Commons License)

Last week, I saw a thread in an online photography group that started with a simple question: “What problems do you face as a photographer?” After reading hundreds of the responses, I wanted to respond to some of their problems as both a lawyer and an entrepreneur:

Competition – Other Photographers Offering Half the Price

My first thought when I read this was, “There’s a good chance it’s also half the quality.” You never want to be in a race to the lowest price. Instead of worrying about price, focus on what makes you different from the competition.

If someone wants a cheap photographer to document their once in a lifetime event, like their wedding, that’s their choice. If I were facing a client who said, “I can get someone to photograph my wedding at half this price,” I hope my response would be something like, “This is your special day. You have to choose who you trust to capture these moments for you.”

Personally, I have no problem when a client self-selects out from working with me if they don’t want to pay my rate. It’s better that they decide that early and go with someone else.

This problem reminds me of a sign I saw in a tattoo parlor: “Good tattoos aren’t cheap. Cheap tattoos aren’t good.” The same is likely true for photographers.

Clients Don’t See What We’re Worth

Part of being an entrepreneur is educating prospective client about the value we bring. It’s not that skilled photographers cost so much, but they’re worth so much. Some of the ways you can do this is by having a high-quality portfolio and a stellar reputation.

Remember: You’re not just taking photos; you’re creating an experience – every interaction from the first “hello” to the final deliverable. Your ability to take and edit photos are important, but so are the way you carry yourself, how you communicate, and your creativity, work ethic, and confidence in your skills. All of those things add or detract from your value as an artist. You want to be in a position where people want to hire you, not just any photographer.

I had a similar situation when I hired the designer who created the logos for Scarlet MavenTM and Lights Camera LawsuitTM. I could have used a discount service like 99 Designs or Fiverr, but I didn’t want to entrust a stranger with this task. I wanted to work with Square Peg Creative and Dina Miller. I’d seen and loved the way she created. I was willing to pay extra for that experience, and the resulting logos that I love.

How to Tell People I’m a Proper Photographer

The best way to tell people that you’re a professional photographer is to act like one. Create a business entity, a website with a portfolio, and contract templates for your services. If you want people to take your seriously, you have to act like a professional.

Speaking of Contracts

Contracts are relationship management documents. Once a client signs the contract, they are bound by its terms. Whenever there’s a problem, you can refer back to the contract and the terms they already agreed to. This is where you can put information like,

  • The deposit is non-refundable.
  • The photographer chooses the best images to show client. The client will not get raw images.
  • There’s no guarantee you’ll capture every image the client was hoping for.
  • The client is not allowed to edit the final images. This includes adding filters or stickers or cropping the images.

There’s a video I recommend to almost every entrepreneur called F*ck You, Pay Me, that features a graphic designer and his lawyer talking about how they use contracts to make sure the client pays per the contract’s terms. The suggestions work for many types of professional creatives.

Clients with High Expectations and Low Budgets

While many people don’t like talking about money, it is a topic you want to discuss early in the vetting process by either giving the prospective client your price list or asking about their budget. Don’t be afraid to be frank with clients who have expectations that are way beyond what they can afford. Tell them what they can afford based on their budget, as well as what you could do if they are willing to pay more so they can make an educated decision about what they want.

Clients Who Try to Negotiate on Price

In the photographer-client relationship, they are hiring you. You get to decide what is and is not negotiable in your contract. If your rates are not negotiable, be clear about that the first time they ask.

In my practice, I hand pick who are my pro bono clients and who gets a discount. That’s my call, not the other way around.

Here’s a tip I saw from another photographer: Make your prices all-inclusive. Don’t list separate prices for shooting and editing, because it opens the door for clients to try to haggle on one or the other.

Companies that Want You to Work for Free or Magazines that Want to Use Images for Free

Oh, it’s so cute when people want you to work for “exposure.” You get to decide how you respond to those requests. Here are some of my favorites:

  • Exposure is not a currency that my landlord accepts.
  • I can’t pay my mortgage with exposure.
  • People die of exposure.

Chasing Payments

Ideally, you want to create a photographer-client relationship where it’s easier to comply with the terms of the contract and pay on time, than not. Many photographers charge a non-refundable deposit to book a shoot or event and require the balance to be paid in by the day of the shoot or event. At the latest, I don’t recommend a photographer provide proofs unless they’ve been paid for the shoot.

You also want to have terms in your contract about cancelled appointments, late payments, and non-payments, so that you set yourself up to get paid what you’re owed in a timely manner.

Are You Free Next Week?

You can put the information about how far in advance a prospective client should expect to book you near your contact information or in your FAQs if you have them.  

People Assuming You will Photoshop them Perfect

This problem reminds me of Christian Siriano on Project Runway when he said, “I’m not a miracle worker, lady. I can’t make you have an ass!”

In talking with your client, set some expectations about what Photoshop can and can’t do. Assume your client doesn’t know anything about photography, unless they are a professional photographer themselves. You can educate your clients by showing them before and after images so they can see the type of edits you’ll be doing for them.

It’s ok to have fun with it, if that’s your style, by saying things like, “If you’re 5’2”, I can’t make you 5’10”,” or “If you have a ‘dad bod,’ I can’t transform you into Thor.” On the softer, more realistic side, remind your client that it’s your job to capture them looking their best, not like someone else.

Bonus Tips from my Experience as Model: Posing

Several people said they had problems with posing models or giving direction. As a model, my response is, “Don’t be afraid to try.” You’re the one behind the camera. I can’t see how I look.

If you give a model a pose and it doesn’t create a good image, try something else. I won’t know if you didn’t get the shot you wanted. I’ll think you have lots of ideas.

It’s ok to think out loud and say things such as, “I like how this light is hitting your eyes, let’s try this.”

I’ve you are afraid you won’t remember the ideas you wanted to try from other images, bring notes to the shoot. It shows you’re prepared, and thinking about what types of images might be best for me.

Learning how to pose models and give direction is something you develop over time, with practice, and watching others. Unless you’re doing some extreme work, no one is going to die. And don’t forget – I can’t see how I look, so as far as I know, whatever you’re trying is brilliant.

Lights Camera LawsuitTM

If you’re looking for help with the business or legal side of being a photographer, I hope you’ll check out my online course coming out later this year: “Lights, Camera, Lawsuit: The Legal Side of Professional Photography.” It will address the most common problems professional photographers face, including contracts, copyright, and managing client expectations. Please add yourself to this exclusive list if you want to stay in the loop, and get additional helpful information leading up to the release.

How to Give a Discount on your Photography Services without Discounting your Value

The Belly Dancer with the Fans” by mmockingbird from Flickr (Creative Commons License)

Sometimes photographers, like all service providers, want to provide a discount for their services. Perhaps it’s for a friend, someone you’ve always wanted to work with, or an organization you know can’t afford you and you want to help.

Nothing Wrong with a Discount

There is nothing wrong with offering a discount for your photography services, whether it’s a special one-off or a promotion that’s available to any client.

The challenge is you don’t want to cheapen the perceived value you provide. When a person buys an item at a cheap price, they may have lower expectations about it and will perceive it as less valuable than a similar product that performs the same function but costs twice as much. You don’t want your clients to discount the value you’re giving them, even when they get it at a discounted price.   

Have you noticed that it’s often the clients who are getting the biggest discounts who complain the most? I made that mistake once. I quoted someone an exceptionally low flat fee to do their contract because I thought it would be an easy project. The nitpicked so much and requested so many changes, that by the time it was done, the amount I made per hour of work was laughable. (This was also the client who taught me to put a cap on the number of edits I’d do on a flat fee project. If they wanted more edits after that, they had to pay hourly.)

Always Show a Photography Client your Value

Even when you give a client a discount, always include your standard price and then the discount. Being a professional photographer is two jobs in one – you’re an artist and an entrepreneur. The entrepreneur’s job includes educating clients and prospects what you are worth. Photography clients are not just paying for your time, but also your talents. Remind them about the value you bring to the table, regardless of what they’re paying.

This tactic is not offensive.  You see this when you buy things online. The website always starts by posting the price and tells you how much of a discount they’re giving you and the price you’re getting.

How to Write an Invoice or Contract with a Discount

This is how I’d write an invoice or payment section of a photography contract that includes a discount:

Sitting Fee:                       $200.00

I-Like-You Discount:           -$75.00

Total Sitting Fee:               $125.00

You get to choose what you’re going to call your discounts. I encourage my clients to be creative and include their personality in their contracts, but you have to decide what works for you.

Lights Camera LawsuitTM

If you need help with your photography contracts and managing client expectations, I hope you’ll check out my online course coming out later this year: “Lights, Camera, Lawsuit: The Legal Side of Professional Photography.” It will address the most common questions professional photographers face, including how to explain these concepts in plain English. Leading up to the release date, I’m sending weekly updates with tips about the legalities of photography. Please add yourself to this exclusive list if you want to stay in the loop. (Psst! People on this list also get first dibs on discounts!)

When a Client Threatens to Leave a Bad Review

https://www.flickr.com/photos/yazuu/3053549142
Angry Guy by Adrian Tombu from Flickr (Creative Commons License)

Here’s the scenario: A client hired you for a photography job, which you did, and you provided the deliverables on time. The client is unhappy with their photos, threatens to leave a bad online review if you don’t give them their money back.

What do you do?

You’re a Photographer, Not a Miracle Worker

Your client has put you in a difficult position. You have to work with what you’re given from the client. You don’t want to be insensitive, but you can only do so much. It may be impossible to give the client images that match what they envisioned in their head.

Many times, part of being an entrepreneur involves educating and managing the client’s expectations. Based on the client’s complaint, it may be prudent to review the images and see if there’s anything you can do, perhaps suggest additional edits than what they hired you to do or explain that this is best you could do given the constraints of the situation.

Ask Yourself the Difficult Question

Ask yourself the difficult question: Did you screw up? Do you owe this person additional edits, a re-shoot, or some type of compensation? If so, admit it.

As Peter Shankman says, “There is no greater lover than a former hater.” If you make a mistake, admit it, and make up for it, that person may become your biggest cheerleader.

Go Back to the Contract

When dealing with an upset client, having a well-written contract can help you resolve the matter and remind the client about what you both agreed to at the outset of your working relationship.

If the client is upset because you didn’t provide an image of certain pose, show them the provision that says there are no guarantees that they’ll get every pose or image they hoped for.

If the client wants to see all the images you took during the shoot, show them the provision that says you’ll only be showing them the best images and that they won’t see every image you take.

If the client says they shouldn’t have to pay because they’re unhappy, remind them that they hired you for your time and skills. Payment is expected if you fulfilled your obligations under the contract.

Hopefully, you have a photography contract that anticipated common complaints and addressed them accordingly.

You Can Always Cave to their Demand

Whether you give this person their money back is a business decision, not a legal one. You may decide that the best course of action, regardless of whether you think it’s warranted, is to give this person their money back and move on. That’s your call.

I recommend you decide in advance, just for yourself, the circumstances under which you’ll give a refund. Many photography contracts state that there are no refunds or that they are given only in rare specified situations.

If They Leave a Bad Review

If the client follows through on their threat and leaves a bad review, respond to it in a polite and respectful manner. You can say you’re sorry they’re upset and invite them to contact you directly to discuss it. (Many times, how you respond to a bad review isn’t about the upset client, but rather it’s an opportunity to demonstrate to anyone who reads it that you take client concerns seriously.)

In a perfect world, you’ll have enough positive reviews that one bad one won’t tank your average. But if you’re just starting out, one negative review could have a substantial impact on your score. You may want to invite happy customers to leave reviews about their experience to bring your average back up.

Lights Camera Lawsuit

I’m working on my first online course called “Lights, Camera, Lawsuit: The Legal Side of Professional Photography,” which will be released by my second company (separate from my law practice). Leading up to the release date, I’m sending weekly updates with

tips about the legalities of photography. Please add yourself to this exclusive list if you want to stay in the loop. (This list is completely independent from the CLF newsletter list.)

Why Contracts Have So Many Definitions

https://www.flickr.com/photos/eleaf/2561831883

Iron Horse Bicycle Race Durango Women 10″ by Eleaf from Flickr (Creative Commons License)

This week, I had a chat with someone who was concerned about the media release provision in a contract to be in a cycling race. It said by signing up for the race, you give the organizers permission to use any video or images of you, your likeness, you name, and your biographic information for any purpose without need any additional information from you. He was worried that the race organizers could sell his life story without his permission.

I’ve seen this provision on every race contract I’ve signed – and it wasn’t one of the ones I altered. This type of provision is on lots of contracts, event tickets, even on A-frame signs around the state fair. Organizers want to use the photos from their event to promote the organization and its activities. They want to be able to make you their poster child if they snap an amazing photo of you. They want to be able to caption a race photo with “Chris Jones, 37, of Truth or Consequences, New Mexico . . .”

These organizers don’t want to sell your story to make the next Lifetime Movie. I know this because (1) they don’t know your life story and (2) they’re not in the business of sell stories for the next movie of the week.

This conversation reminded me of why contracts have so many definitions. Sometimes they start with pages of definitions. They help eliminate confusion and avoid disputes when questions arise down the line.

If there is a dispute about the meaning of a word in a contract, and both sides have a reasonable interpretation of it, the court will side with the person who didn’t draft the contract, unless the contract states otherwise. (Check your jurisdiction’s rules to see if the same rule exists where you live.)

Going back to the would-be racer, I told them if they had concerns about what a term in the agreement meant, they should email the organizers for clarification. (Never be afraid to ask questions about a contract before signing it.) If there’s a dispute later surrounding the meaning of the provision, they would be able to use the email response as the basis for their reasonable belief as to what it meant and to counter any contradictory statement by the other side.

If you’re in a situation where you need to create, draft, or negotiate a contract, please call a contract lawyer for help. (This week, my editor sent me an FYI email about a company in Columbia that is selling a “Pack Of Professionally Drafted Legal Contracts” for $24. I responded with “Let me know how that $24 contract holds up when challenged in court.”)

Thanks for reading this post. If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

How to Legally Use User-Generated Content

https://www.flickr.com/photos/zoidberg72/16243539933
Selfie by dr_zoidberg from Flickr (Creative Commons License)

Here’s a question I get from companies and their marketers: What are the legal dos and don’ts for using user-generated content? These are situations where a company wants to use a photo, video, or text created by one of their fans, usually from a site like Instagram, Facebook, or Trip Advisor. Many companies merely want to approach the person through the platform where they found the content they want to use and ask for permission to use it. While this strategy is convenient, it may not be in the company’s best interest.

Using Content Within a Platform

It’s easiest when a company wants to share someone’s post within the social media platform – e.g., sharing someone’s Instagram photo on the company’s Instagram. Many social media sites build this option into the platform where you don’t even have to ask for permission to share someone’s post on another’s account.  

Of course, I’m a risk-adverse lawyer so I tell my clients to review the terms of service first to see what happens just in case it turns out the person who created the post you shared didn’t have the right to do so and now you have to deal with the fallout. Depending on the circumstances, I might contact the person to ask the person if they took the photo (which would indicate if they’re likely the copyright holder), try to verify that the original poster is complying with the platform’s rules

Using Content Across Different Platforms

Here’s where it gets a little more complicated. These are the situations where you want to take content from someone’s post on one platform and share it on a different social media site, your website, or another third-party platform. For this situation, I recommend you have a contract drafted by a lawyer. You could have them create a template for you if curating user-generated content is part of your marketing plan.

If I were creating a contract template for obtaining permission to use content created by a user or fan, I’d likely include terms such as:

  • The user owns the IP in the content: either they created it or they have permission to use it
  • The user has authority to grant the company permission to use the content
  • The user grants the company a perpetual, irrevocable, worldwide, sublicensable, paid-in-full, royalty-free license to the company to use the content for any purpose without needing the person’s consent or credit, including the creation of derivative works (or in the alternative, that the user grants the company a copyright assignment)
  • The user will reimburse the company’s legal fees and damages if it is accused of wrongdoing because the company used the user’s content

Such a contract would also include boilerplate verbiage, like a dispute resolution provision that states how the company and user will resolve disputes if one occurs.

Always Apply Reality

In any potential legal situation, be sure to apply reality. If a company wants to use a photo with two people in it, whoever posted the image may not be able to speak on behalf of the other person in the photo, and you may need release from identifiable people to avoid being accused of violating their right of publicity.

Additionally, it will likely take longer to get permission if you want to use images and other content across platforms. Be sure to build that into your timeline if your marketing plan involves using user-generated content.

There are also those who may question whether it’s worthwhile to have a lawyer create a contract for these circumstances. When there are no issues, a contract may seem superfluous; however, contracts are imperative in situations where there is a dispute and/or the parties forget the terms of their agreement. When you work with your lawyer to create you contract, make sure it has provisions that will apply to situations that are likely to occur as well as the worst-case scenarios.

If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

Legal Checklist to Protect Online Entrepreneurs

Labib Ittihadul from Flickr (Public Domain)

I was recently asked to create a list of what legal steps an entrepreneur should take if they operate solely online to protect their business. The person who asked appears to be primarily a YouTuber. Here’s the list I created for him: 

1. Consider having Two LLCs. One is a holding company for the intellectual property and licenses the IP to the other LLC to use it. This way if the holding company is sued for infringement, there are no assets to be collected if the holding company loses the lawsuit. We recommend this tactic for many businesses, not just online entrepreneurs.

2. Create an Operating Agreement if the LLC has more than One Owner.  Yes, this includes if you go into business with relatives, best friend, or romantic partner. This is a master document that lays out how the company will operate, each person’s obligations and responsibilities, and how the owners will address problems when they occur.

3. Move your Website to a Server Outside the U.S. The reason for doing is if there is ever a court order against the website, it will be more difficult to enforce if the website is house by a company outside the U.S. and not bound by U.S. law.

4. Register your Trademarks with the USPTO. So many legal issues could be minimized or avoided if every company properly registered their trademarks. This could include company names, product names, event names, logos, and slogans. When you have a registered trademark, you can stop a competitor from entering the marketplace while using a trademark that is confusingly similar to yours. If you have a strong international presence, it may be wise to register your trademarks in multiple countries.

5. Create a Copyright Strategy. Many professional content creators do guest posts for and collaborations with others and allow guest posts on their sites. It’s best to have contract templates for these situations that include clarification about who owns the copyright, what the other person gets, any limitations regarding the content, and an indemnification clause if appropriate.

Additionally, your copyright strategy should address when and how you can use others’ materials. You should have an understanding about fair use and where to look for materials that come with a license to modify the original as well as a license to use it for commercial purposes.

6. Consider Registering your Copyrights. You do not have to register your copyright to get your copyright rights, and you do not have to register everything you create; however, it’s beneficial to have the discussion about what you might want to register. You are required to register your copyright if you want to sue for infringement. Additionally, I frequently recommend registration to people who want to license or sell their copyrights.

7. Create an Action Plan for Addressing Suspected IP Infringement. Decide how you want to respond to suspected infringement before it occurs, so that you or your lawyer can be prepared to respond based on your desired outcome when it happens. Depending on how you want to respond, there may be things you need to do before the infringement occurs to best protect your rights.

8. Have a Contributor Contract Template. This is the contract you will use with people who contribute content to you, your site, your channel, or a social media account. It will state what rights each party has to use the content – most likely that they own it, and they grant you a license to use for certain purposes. It should also have an indemnification clause to protect you in the event you’re accused of violating another person’s IP rights or other legal wrong by using what the contributor provided to you.

9. Have an Influencer Contract Template. This is the contract to use when brands hire you so that the expectations on both sides are clear, and you state that you comply with FTC regulations. (You should probably have internal documents about FTC compliance as well.) Companies that hire influencers may have their own contracts that they want to use, but having your own template will help you analyze their contract to see how well it addresses your needs and concerns.

10. Create Website Terms and a Privacy Policy. These documents may need to comply with U.S. privacy laws, the Canadian Anti-Spam Legislation (CASL), and the General Data Protection Regulation (GDPR), and manage the expectations of visitors to your website. Many of the new privacy laws interfere with how many companies collect and use others’ personal information. These issues are complicated. Many people copy another content creator’s terms and privacy policy, but that could be a recipe for disaster if what you use is insufficient for your needs.

This may not be a complete or comprehensive list of legal steps to take to protect your business. It’s always best to consult a lawyer who understands the legal implications related to your business, preferably someone to specializes in business, intellectual property, and internet law. Hopefully this list gives you a place to start to evaluate your legal needs as a professional content creator or online entrepreneur.

If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

Model Release and Regret

“Subway Ballet” by J Stimp from Flickr (Creative Commons License)

Recently, I received an email from a photographer (not my client) who had a question about the validity of model releases. As I understood the situation, he hired a model (over age 18) to do a photoshoot at his studio. The model was photographed nude for at least part of the shoot. The model signed a model release and was paid for her modeling services.

After the photoshoot, the photographer censored some of the images to comply with Facebook’s rules and posted them online.  The model saw the images and was upset. The photographer asked me if the model had any authority to force him to take the images down.

The Rules of Model Releases
Model releases are standard in the photography world. In most cases, the photographer owns the copyright in their work from the moment the photo is created, not the person in the photo, and the model owns the right to publicize their own image.

The model release transfers the model’s right to publicity in those images to the photographer, which allows the photographer to use the images per the terms of the release. Usually, when I write a model release or a model release template, the model gives the photographer permission to use the images in any way and for any purpose, without restriction.

In general, once the model release is signed, the model’s given up their rights. If the model later regrets signing it, there may be nothing they can do to “unring that bell” unless the photographer is willing to negotiate another agreement – such as a copyright assignment where the model purchases the copyright rights in the images from the photographer.

Think Before You Sign
If you are a model, read the model release carefully. Never sign the release without reading and understanding it. Many of them allow for unfettered use by the photographer, including the right to license the images to others. Treat the images as if they are going to end up all over the internet, on billboards, on products or marketing campaigns you hate. Chances are, that’s not going to happen, but it could.

I write not just as a lawyer, but also a model myself. On a number of occasions, I have written and signed my own model release. Models may give up substantial rights when signing these documents, so it’s not a decision to make lightly.

What Could Invalidate a Model Release
Even if the model release was written by a lawyer and appears to valid on its face, there are situations where a model release might be invalid due to the circumstances surrounding the shoot:

  • The model was minor (Depending on your state, minors may not be able to sign contracts or they can withdraw their consent upon reaching the age of majority.)
  • The model was an adult but lacked the capacity to enter into a legally binding contract. (These people usually have an appointed guardian to sign for them.)
  • The model was intoxicated. (In general, intoxicated people can’t enter into valid contracts.)
  • The model was forced to sign the contract under duress. (You can’t get a valid contract if you use threats or force to get someone to sign it.)

There can also be instances where the photo in question was taken outside the scope of the model release and so the model release does not apply.

I get questions every day about photography, image rights, and copyright. If you are a photographer or model (or aspiring to be one), it’s imperative that you understand these issues. Many disputes can be avoided with well-written contracts and accurate information. I’m constantly doing work in this area, so if you want to keep up with what I’m doing or if you need help, you can contact me directly or check out the other posts and videos I’ve done on the legal side of photography. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Can You Afford to be an Entrepreneur?

Money Unfolding by CreditCafe.com from Flickr (Creative Commons License)

When I decided to launch this law firm, a good friend and fellow entrepreneur/lawyer warned me: “You’re going to need 6 months’ worth of money and 12 months’ worth of patience.” He was right. Fortunately, I had nearly 3 months from deciding to opening my practice until our first day in business, which gave me time to research and formulate my offerings and tap into community and professional resources to get my business off the ground.

Other entrepreneurs aren’t that lucky. They may not have the time and/or money to consult counsel prior to launching a new venture. Even on a condensed time frame or on a shoestring budget, your legal needs should be part of the discussion and plan.

Full-Time Venture Needs Financial Backing
If you want your new venture to be your full-time job, you need to be prepared for the potential financial strain that comes with that undertaking if you don’t have a spouse or other income supporting you in the meantime. You may have the gift of time, but you can only operate your business as long as you have income or savings to cover your bills. I don’t recommend jumping into a new venture without some type of financial safety net.

For entrepreneurs starting with a side hustle, you have the opposite issue. Your regular job can pay your bills while you develop your business, but it limits how many hours you can work. And depending on your circumstances, you job may not provide much money to put towards your business after paying your bills.

Make the Business Fund Itself
While every business needs some seed money to get started, make your business fund itself. When you decide to start a business, make a list of all the services, equipment, and supplies you think your company needs. Then step back and categorize each item as “Must Have” or “Nice To Have.” Ask a trusted colleague or friend to review your list and challenge you on what you need.

Many businesses don’t need much to get started. When I started this firm, I only needed an LLC, client contract templates, computer, scanner/printer, website, email address, phone number, and business cards. I gave myself a limited budget for supplies, bar dues, and to pay for my LLC and my accountant, and after that, I didn’t buy anything for the business until the business could afford it. (Even if my personal account could afford it, I made myself wait until the business could afford it.) It forced me to be scrappy, creative, and thoughtful about how I spend my money. It’s something I recommend to other entrepreneurs, including seeking out low-cost and free options when appropriate.

Prioritize
I regularly receive emails from people who need help with the legal side of starting a business, and some of them claim that they can’t afford an hour of legal services. Sometimes I wonder if these entrepreneurs didn’t do any research into the expected costs of a consult, contract, or trademark when creating their business budget. (When people can’t afford my firm, I’m happy to provide referrals to other options and/or tell them what things they can do themselves – like filing an LLC with the Arizona Corporation Commission. The forms and instructions are online.)

A fellow entrepreneur suggested that these potential clients don’t see value in paying for quality legal services. That sounds plausible. Many new entrepreneurs are focused on their expected success that they don’t want to ponder the what-if scenarios. In many ways, quality contracts and other legal services protect you when things go wrong. You often don’t need to rely on them when things go right.

My recommendation for all new entrepreneurs is to meet with a business accountant and a lawyer to make sure you’re starting out on the right foot, and that you understand the legal implications of your venture. If you have questions about business needs, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Avoid Litigation: Contracts and Timing

Water wheel close-up by Edward Webb from Flickr (Creative Commons License)

The most efficient way I’ve seen to avoid problems in a business contract situation is to set up the relationship between the parties in such a way that each side is forced to perform to get what they want from the other side. Just like a water wheel feeds the machine that keeps the wheel turning, the parties should be compelled to give the other side what they need.

Contract = Relationship Management Document
A contract is a merely a document that outlines a relationship between parties – what each side must do, and what they get in return. Every contract should have a dispute resolution provision that outlines how the parties will resolve problems if they occur. In a perfect world, the parties will never need to resort to this clause.

While a good contract will have a thoughtful dispute resolution clause, a great contract will structure the parties’ relationship in such a way that neither side can fathom breaching it.

Structure the Relationship to Feed Everyone’s Needs
When I begin work on a new contract, I ask my client to paint me a word picture of the people involved and the relationship between them. I try to understand not only what each side is giving and getting, but also their motivations.

One of the obvious potential problems in a contract relationship is that one side will perform their part to the benefit of the other, and the other side doesn’t reciprocate as required in the agreement. This may be situation where one side takes your money and runs, or conversely, you do work for your client and they don’t pay you after they’ve received your work product.

The best way to avoid this situation is to set up the work flow so that each side doesn’t get what they want until the other side has done what they promised to do. For many entrepreneurs who are professional creatives, I recommend that they write their contracts to state that the client won’t receive the final product until their bill has been paid. Likewise, for photographers, I recommend that the contract state that the client won’t see the proofs until they’ve paid for their shoot in full.

Please Pay Here by Steven Depolo from Flickr (Creative Commons License)

Real Life Example
I recently worked with a graphic designer who is a smart entrepreneur with a brilliant contract. I’m creating my first online course and hired her to create the logo. Per our contract, I paid 50% up front and she got to work. She designed me a brilliant logo that fits the course and my personality. She said she’d send the final files when she received the balance.

That email came at the beginning of a week when I wasn’t home where the company checkbook lives. I told her this and she said she didn’t mind waiting until I could send payment. (Did I mention she’s a friend?) I was happy she held her boundaries to make sure she got paid before she sent the final work product. It’s not that I wouldn’t have paid her, but it was the right thing to do as a business owner.

If you choose not to write your contract with these provisions, you may be in a situation where you have go after the other side for payment or performance, possibly hiring a lawyer to write a demand letter, or taking the other side to court. If it’s a relatively low-dollar amount, you may end up in small claims court where you may get a judgment in your favor, but you still need to collect and the amount of time and energy involved to go through the process may make you question whether it was worth it.

This is why a good business lawyer is an investment for your business. They can see the potential pitfalls in your business and help you avoid them and advocate for your rights when necessary. If you need help with writing a contract that fits the needs of your business, you can contact me directly or a social media lawyer in your community. I post about these issues on TwitterFacebookYouTube, and LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Contract Amendments – Always in Writing

Signature by Sebastien Wiertz from Flickr (Creative Commons License)

When a lawyer writes a contract for a client, it usually includes provisions that say that the all the terms of the agreement are contained in the document and all changes to the contract must be in writing. It may look something like this:

This Agreement is the entire understanding between the Parties concerning the subject of this Agreement. This Agreement replaces and supersedes any and all prior oral or written agreements and discussions between the Parties on that subject. All amendments to this Agreement must be in writing and signed by the Parties.

Contracts are relationship management documents. They keep everyone on the same page to prevent problems down the line or to help resolve problems when they occur. One of the challenges I encounter with contract clients is they often don’t follow the contract they signed and amend the agreement that is documented only in an email exchange, or worse, a undocumented verbal agreement.

Always Get It In Writing
The purpose of the “entire agreement” clause is to put all the terms of the contract in a single document. All written amendments should be stored with the original agreement – in hard copy and/or electronically, so if there is a question or dispute, the parties only need to review the single or amended document. They don’t have to piece together the contract from the parties’ communications and actions.

If you don’t get your amendments in writing, you’re asking for trouble. There could be confusion about what the change is, or worse, the other side could deny the existence of an amendment and screw you over. Remember, the law does not care about what you know, only what you can prove. If you don’t get your amendments in writing, and you have an “entire agreement” clause, if you have to go to court, the judge could say the amendment doesn’t exist.

Contract Amendments Can Be Easy
Why don’t people put their contract amendments in writing. I suspect it’s because they think it will be a hassle, cause a delay in a project, be time-consuming, or maybe they don’t even think to put in it writing because “it’s not a big deal.” In general, contracts exist, not for when things go right, but when they go wrong. What you think is a minor verbal change when both sides are getting along can become a big problem if things turn sour.

If you spend $100s or $1,000s to have a lawyer draft your contract, don’t revise it without their involvement. You’ve invested time and money to protect your interests. You don’t want to inadvertently throw that away with a damaging and undocumented revision.

Contracts are your Friends
These are some of my guidelines when it comes to reading and drafting contracts:

  • Never sign a contract you don’t understand. Don’t be afraid to ask for clarification.
  • Whomever writes a contract does so for their or their client’s benefit. Keep that in mind when a contract is written by the other side. (Lawyers have an obligation to represent their clients zealously.)
  • Substantial business contracts should always be reviewed by a lawyer to ensure it’s complete and protects your interests.

A contract should be written to protect everyone involved – to make sure everyone understands and agrees to the same course of action.

I’m constantly reviewing and drafting all types of contracts for clients. If you want to keep up with what I’m doing or if you need help, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.