Yesterday, I was coaching a private client who will be offering a $50,000 training package in the fall.
A big ticket item.
Before she makes her offer, she wants to prove she can successfully train someone else on her methods. Smart.
She’s been extremely successful in her own business, but has not yet trained an outsider, so wanted to take on a test case while we get the program designed and marketing materials ready for her launch.
I thought that was a great idea, but only if she had an airtight agreement with her test case that would protect her intellectual property and her reputation in case something went wrong.
I’m her coach, not her lawyer, so I didn’t offer to draft the agreement.
During our coaching session yesterday she showed me a licensing agreement she had put together for her test case.
The first thing I asked her was “did you have a lawyer prepare this agreement?”
She said “no, I did it myself.”
I was impressed. It looked a little homemade, but it was a pretty darn good agreement.
After reviewing it, I noticed there were a couple of ambiguities and that she hadn’t quite thought through all of the points of the agreement, specifically those relating to exit – what if someone wants out early?
I pointed out the two areas that could leave some area of potential risk and she’s going to revise her agreement to close those loops.
She would have had to pay a lawyer big bucks to draft a legal agreement like this for her, but because she’s a smart business woman she did a few things right that can save you thousands on legal fees, if you do them too.
So how do you apply this to your own business and life?
1. Be extremely knowledgeable about agreements and all the other legal stuff you need to do for your business, in your business, and to protect your personal assets from your business.
2. Get comfortable preparing your own simple agreements.
3. Clearly think through exactly what you want your agreement to do before you write a single word.
4. Have your agreement reviewed and edited by a lawyer, before you get it signed.
5. Have a really good lawyer on your side who will consult with you, review and edit your agreements on a flat-fee, membership type basis instead of hourly or even by the transaction, so you never have to worry about calling your lawyer or how much it’s going to cost.
It really can be that simple to save thousands on legal fees. And build yourself a business you can really count on.
If you don’t feel knowledgeable about the legal stuff you need to run your business on a solid foundation, check out my LIFT Foundation System & Toolkit.
And, hey, let me know about how you’ve worked with a lawyer in a unique way like this in the past or where working with a lawyer hasn’t been like this for you. I’m always interested in hearing real stories of business owners and their experience with lawyers and the legal system.
3 Comments
I'm in the business of art licensing and so I have to use legal agreements for most of my clients. Attorney's fees can get hefty. I have three ways to save money on it:
1.) I paid to have one agreement made up that I use over and over, and I just make minor adjustments to it so that it works for each new client;
2.) If I have to use an attorney, I ask for a price quote up front. That encourages the attorney to keep to that price.
3.) Use an attorney that's located in a state that's cheaper to live in. I'm near Los Angeles, but LA attorneys will charge $450 / hour. I use a great attorney in Kansas who only charges $250/hour. She can charge less because it's so much cheaper to do business in Kansas.
Once I asked for a price quote – got $1,500. The bill arrived and it was $3,000. I called the attorney and said “you quoted me $1,500. That's what I budgeted.” So he dropped it back down.
Make it clear to the attorney what your budget is, and if they care to keep your business, they will try to stay within it.
Love it, these are awesome real world, in the trenches examples of how to save money on legal fees. I'd encourage you to definitely look for a lawyer who will charge you on a flat-fee, preferably membership based model instead of hourly and by the transaction.
Yikes, Alexis, I'm still a practicing attorney, so don't throw me under the bus like this! LOL Seriously, I have turned my practice upside down. I'm moving out of my expensive brick and mortar office at the end of the month, and I've licensed virtual law office technology to automate some of the “administrivia” of running a law practice. I have a new website to target women owned small businesses, and I'm slowly warming up to the fact that to meet the legal needs of the small business community, I'm going to have to do something radical with my pricing. I thought ditching hourly billing for flat fee billing was radical, LOL! So, I'm intrigued by the “membership” concept. I definitely want to learn more about that.