Protect Your Business

Categories
Elevation Tribe

Domain name? Check! Office space? Check! All legal documentation in place?? Um… check?

Entrepreneurs often leave themselves vulnerable over simple matters that could be avoided by working with a lawyer early on. To learn more about how entrepreneurs can get ahead of these problems, we consulted Basha Rubin, Co-Founder & CEO of Priori, a legal services marketplace. Priori’s technology-enabled marketplace connects businesses with a network of vetted attorneys. We asked Rubin, having worked with thousands of companies, about four of the most common legal mistakes they’ve seen entrepreneurs make.

  1. Not talking to a lawyer asap. Sounds obvious, but it’s a common mistake. Many people think they can do their own corporate organization using DIY tools. “We often encounter entrepreneurs who use online sites to start their businesses or templates for their Terms of Use or customer contracts to save money early on only to discover they’ve made a mistake that costs more time and money to unwind than it would have to handle it correctly in the first place,” Rubin says. “And don’t just speak with any lawyer,” she points out, “you want to make sure you hire someone who has worked with businesses like yours before and who takes the time to understand your concerns.” If cost is an issue, Rubin notes, “many lawyers who work with early-stage entrepreneurs offer flat fee services.”

 

  1. Not protecting intellectual property. Before you choose a name for your business, draft a logo or build a website, you may want to hire a lawyer to do a trademark analysis to discover whether anyone else might have a claim to your name or logo, or help you decide if filing for a trademark may be necessary. “We see this all the time,” Rubin says. “Entrepreneurs start their businesses without thinking about a trademark, only to discover down the road that they need to change their company’s name! It’s much less harmful to your brand to pick a new name at the outset than to have to change it once you already have clients and a reputation.”

 

  1. Not clearly documenting governance and ownership with your co-founders. “We see a lot of entrepreneurs who start their company as a project with a friend or family member and fail to formalize the business and/or relationship,” Rubin says. “Unfortunately, that can make things more complicated down the line if a dispute arises between the founders.” Work out the details before you start the company and ensure an attorney accurately memorializes them.

 

4. Editing agreements without a lawyer’s assistance. When a client wants to change one small provision in a contract, it might seem easy to change it yourself. “Because entrepreneurs don’t want to incur more legal fees, they will often edit documents themselves,” Rubin says. “Often, they will make a change that has more profound consequences than they anticipate.” Have an attorney carefully walk you through the contracts they draft for you, and create fall-back positions for provisions they or you anticipate might be commonly negotiated.

Instant Elevation Moment: When in doubt, write it out. From ownership agreements to service contracts, get all parts of your business formalized in writing—and have a lawyer review all documents to cover you legally.