California Law Report

How To Avoid Getting Sued When Starting A Small Business

John Corcoran, Esq. — Mon, 27 Feb 2012 06:58:35 +0000

This is a guest post by Jenna Smith. You can click here for more information on submitting guest posts.

If you’re an entrepreneur starting a new small business, you likely have a long list of issues and challenges that take up your time.

For example, you’re going to need to hired qualified talent, raise capital, and try to determine an appropriate marketing mix for your product.

You also may be busy making budgets, working with web developers, and scouting out retail space.

Although your business may feasibly grow someday to encompass numerous departments and specializations, for now you are its finance, IT, marketing, and accounting departments all rolled into one.

It may also be smart for you to take on the duties of a legal department at this time.

After all, a business that does not establish itself on a strong legal footing is far more susceptible to lawsuits in the early going – and any lost lawsuit would probably be enough to quash a small startup before it even has a chance.

On a similar note it is highly advantageous for the sake of future growth to have solid legal safeguards in place, even if you never end up getting sued.

Here are some key steps to take to ensure that your small business does not get sued:

Ensure that your products and services do not violate any patents or copyrights

The most important step is to first determine whether your business’ products are legally unique. This requires you to consult patent databases thoroughly in both your country of manufacture and in anyplace with patent agreements or where your product might sell. Consult a lawyer if there is any ambiguity.

Ensure that your designs, logos, and company name don’t violate any trademarks

On a similar note, it’s crucial that you progress no further in establishing your small business until you know whether the name and logo you choose are unique and freely available. While many small businesses can fly under the radar with an illegal name, as soon as you start a website or begin to grow you’re liable to run into problems.

Remove yourself from liability

If you are the sole proprietor of your small business, it may be convenient to forgo incorporation and draw no distinction between your personal and professional assets. But, without incorporation, a lawsuit against your business can target your personal resources. Similarly, someone who sues you for unrelated reasons could make your business pay if they emerge victorious.

Write clearly-worded contracts

Even in the early going it is essential that contracts are clear and comprehensive. Otherwise you could incur investor lawsuits because they were not given a stake in the company. You could also be sued by disgruntled employees who got hurt on the job or who were laid abruptly. Ultimately, it is always beneficial to explicitly state every possibility and eventuality in a contract.

Don’t poach your talent

Many small businesses have found it easy to hire most of their new employees from one specific firm. All too often this results in lawsuits, as the firm accuses these employees of colluding with each other and quitting to form a competitor. With this in mind, try to diversify the sources from which you draw talent.

These are some of the main legal tips to keep in mind when starting a small business. If you have any questions about this advice or cannot comfortably follow through on your own, find a phone number of a nearby lawyer and give him a call. It’s always better to be safe than sorry.

Jenna Smith lives in St. Louis, Missouri. When she isn’t writing, usually about law or business, you can find her cruising the paths in Forrest Park on her bicycle.

How to Choose an Appropriate Form For Your Business

John Corcoran, Esq. — Fri, 24 Feb 2012 06:22:53 +0000

The following is a guest post from attorney Jeffrey Katz. Guest post guidelines can be found here.

When starting a new business, one of the first considerations an entrepreneur should anticipate is the specific type of structure that is appropriate for their business.

The business forms include sole proprietorship, partnership, limited partnership or a limited liability company, C Corporation, and S Corporation. These entities sometimes go by different names in different states.

Let’s closely analyze each structure and determine the appropriate form for your business.

What Is a Sole Proprietorship?

A sole proprietorship is the easiest form of business to start. It is most appropriate for workers such as freelance photographers, writers, craftsmen, or independent contractors.

These are professions that work on a contract basis, meaning that they are sole-proprietorships in themselves. Although, in order to establish legitimacy, you must comply with local registration, permit laws, and licenses.

In addition, a sole proprietorship is not a legal separate entity from the owner, thus the business is one and the same. This means you must pay a self-employment tax (Social Security and Medicare) in addition to income taxes for the year.

Essentially, if you want to run the show yourself and feel you have a grasp for what your target audience desires, a sole proprietorship is for you.

Advantages: flexible form of business, the operating costs are minimal; you are the individual owner; file income tax returns through the owner’s individual tax returns.

Disadvantages: the life of the business can only be as long as the owner’s life (no family members, friends, or others can be concurrent owners of the business); the owner is subjected to unlimited personal liability which means if a business loses money or owes any tax liabilities, the owner is subject to pay all of the expenses.

Should I Form a Partnership?

Partnerships differ from sole proprietorships because it involves two or more people running the business.

However, like a sole proprietorship, there is no need for local or state filings, other than tax returns.
An example of a partnership could be two or more people owning a food truck. There are two owners, one could be the principal driver and the other could be the principal chef.

They both share profits and liabilities according to the partnership agreement, yet they are unregistered with local government. General partnerships are most applicable with small businesses like food trucks or vendors.

Advantages: under federal tax law, a partnership is not taxed as a separate entity; tax liabilities are allocated towards partners in proportion to the partner’s percentage interest in the partnership; partners can withdraw cash and assets from the partnership without federal income tax consequences.

Disadvantages: a partner is personally liable to any debts or other obligations due after partnership agreement is signed; partnership taxation can be complex and may require a great deal of planning; there might be quarrels between how the business should be run between the partners.

How About a Limited Partnership (LP)?

A limited partnership is a partnership, but with limited and general partners.

Limited partners merely invest in the company and stay out of the business operations. There must be at least one or more general partners who invest in the company and manage the day-to-day operations with personal liabilities to any of the company’s debts.

Limited partners are only liable to what they invest in the company, meaning if the company goes bankrupt, a limited partner would not be forced to pay outstanding debts with personal assets.

An LP is appropriate for law firms, accounting firms, film companies, finance firms and real estate projects. Private equity companies almost always use general or limited partnerships for investment funds.

What Is A Limited Liability Partnership (LLP)?

LLPs are a form of partnership that allows for limited personal liability among all the partners.

This means that one partner is not financially responsible for debts against the firm if another partner owes liabilities due to misconduct.

LLPs are generally utilized by professionals in accounting, architecture, law, medicine, or dentistry. Industries like these are subject to frequent lawsuits and malpractice claims, thus limited liability is essential to prevent a partner from going bankrupt.

Advantages: same advantages as partnership, except a partner is not liable for obligations or debts of the LLP

Disadvantages: same as partnership, except not all states have adopted LLP status, so it may not be recognized in certain jurisdictions.

Is a Limited Liability Company (LLC) Right For Me?

LLCs are flexible forms of business that combine elements of a partnership and corporation.

Owners, who are called “members,” have limited liability for the company’s debts like shareholders of a corporation and they also have pass-through taxation like a partnership or S Corporation.

This business entity is created by filing a document with the state, usually called the “Articles of Organization.”

An LLC has a similar tax structure as an S corporation, so what exactly differs the two? Well, LLC has a good deal of flexibility and operational comfort, while an S Corporation can save on employment tax. Also, LLCs allow for an unlimited amount of members while an S corporation only allows for up to 100 shareholders.

Advantages: protects members from personal liability for the debts and obligations of the LLC; freedom from limitations on the funds from which dividends may be paid; elect to choose whether it be taxed as a partnership or corporation.

What Is a “C Corporation”?

A C Corporation is a separate legal entity that is viewed as a “human being” regarding tax laws.

The corporation can engage in business contracts, file lawsuits, and even be sued. However, the dividends issued to shareholders is taxed with the shareholder’s income as well, causing a situation called “double taxation.”

C Corporations provide more flexibility than an S Corporation because of the number of owners a C Corporation can have. Both types of corporations are restricted to state laws, meaning they must file for articles of incorporation, hold and document annual meetings of directors and shareholders, and update the bylaws frequently.

If you have a company that is expected to grow and flourish, a C Corporation is right for you.

Advantages: shareholders have limited personal liability towards business debts; the ability to deduct the cost of benefits as a business expense; unlimited number of stockholders; issue different types of stock (preferred or common); ability to spread profits between shareholders and the corporation to lower tax rate; offer employee incentive stock programs.

Disadvantages: “double taxation” → in addition to paying corporate income taxes, any dividends distributed to shareholders are taxed again; expensive to start; harder to maintain than a sole proprietorship or partnership.

Should I Form A “S Corporation”?

An S Corporation differs from a C Corporation because the company is not a taxable entity.

Instead, the corporate income and losses are “passed-through” to the shareholders for federal tax purposes. Small businesses generally take advantage of this type of corporation because it offers legal advantages, like employee benefits of a corporate structure, in addition to tax advantages of a partnership.

The limitation of 100 shareholders prevents much growth, but this entity can be a viable option for small franchises or small-chain stores.

Advantages: pass-through taxation → partners or shareholders of the corporation would be taxed at an individual level, meaning no tax is due through the corporate entity; income splitting → S corps give ability for shareholders to split their income among family members as “gifts” of stock; protection of limited personal liability.

Disadvantages: limited to 100 shareholders; fewer tax-free benefits for employees; estate planning can be complicated for employees; employee stock ownership plans are not plausible; tax rates to the individual may be higher than a C Corporation’s employee.

JDKatz, P.C. is a full-service law firms specializing in real-estate law, tax law, elder law, business law and estate planning in the Washington, D.C. metro area. If you wish to learn more please visit www.jdkatz.com or contact us at 301-913-2948. You can read more about submitting a guest post to California Law Report here.

Top 10 Small Business Ideas for New Graduates on a Budget

John Corcoran, Esq. — Thu, 23 Feb 2012 06:41:38 +0000

The following is a guest post by Felicia Schwartz. You can find out more about submitting guest posts here.

What could be more exciting than the idea of starting your own business after graduating from college?

When starting your own business, there are considerations that may or may not make your original start-up idea feasible, such as finances or logistics.

These factors are why you need to take an honest assessment of your resources stacked against your desired start-up, and ultimately, your potential return on investment.

It may be beneficial for you to consider seeking out online business administration courses, if you did not take any such courses in your college career. These studies may help you gain confidence in your start-up.

If you have a smaller budget, you still have plenty of options to start a business that will excite your mind, challenge your entrepreneurial spirit and give you potential return on investment.

Here are just a few ideas of businesses you could start that are safe and won’t break your newly graduated bank, but can get the ball rolling.

10 Small Businesses You Can Start Easily That Won’t Break the Bank

1. Event planner

This low overhead start-up may be right up your alley if you have excellent organizational skills. Start with friends and family to see if they have any upcoming events for which they will need help. Ask for referrals.

2. Computer Repair Service

If you studied computer technology in college and want to cash in on your highly respected skills, this is the way to go.

3. Dog groomer

People love their dogs and want to keep them looking sleek and well-groomed. If you love being around dogs and know the ins and outs of pet grooming care, or are willing to brush up on the subject, this may be just the business for you.

4. Gift basket designer

This clever gift packaging idea has been popular for quite some time and doesn’t seem to go out of style. You can please the giver and receiver by putting together a treasure trove of gifts in a creative package.

5. Professional Researcher

Use your nose for finding the perfect piece of information and provide your services to doctors, attorneys, publishing companies and others with this much-needed skill.

6. Translator

If you are fluent in several languages, you may be sitting on a goldmine. Whether you are proficient at written, verbal or both facets of a foreign language, you should be able to easily break into this field.

7. Child Care Provider

If you have a talent for working with children and you have a good space in which to safely care for them, this may be a good start-up idea for you, especially if you have a degree in child development.

Note from John: there are licensing restrictions for child care facilities and people who work in child care centers. These restrictions vary by state. You can check out more information on state licensing requirements here.

8. Consignment Shop Owner

This business can be fun and lucrative if you know good quality, second-hand clothes when you see them. The overhead will be slightly higher since you will need to rent space for the shop, but you will earn commission on clothes you didn’t need to purchase up front.

9. Landscaper

This business can begin very simply by using your own lawnmower and lawn care supplies. Begin advertising and, in our busy world, people often appreciate finding someone reliable to maintain their lawn.

10. Personal Cook

Put your culinary skills to use and cook for individuals or party events.

Choosing a career after college can be tricky, particularly in a slowly recovering economy. Finding a career that you can be passionate about might mean looking outside of your field of study—but starting your own business can also give you the opportunity to do what you love.

Felicia Schwartz is a writer and startup partner living in Indianapolis. She writes on behalf of Colorado Technical University.

[Free Webinar] How to Run a Business in Today’s Economy: Tales from the Front Lines of a Lawyer/Entrepreneur

John Corcoran, Esq. — Thu, 23 Feb 2012 06:12:43 +0000

Are you a business owner who is up late at night worrying about your business?

Do you find yourself working 80 hour weeks and need help implementing key systems so you can work less and keep your customers happy?

If this sounds like you, join us for this lively webinar presentation with seasoned entrepreneur and attorney Basil Plastiras. The title of the webinar is “How to Run a Business in Today’s Economy: Tales from the Front Lines of a Lawyer/Entrepreneur.”

You can register for the webinar starting today here (limited space available):

https://www3.gotomeeting.com/register/652266126

Basil has had a hand in starting, managing or investing in approximately a dozen different types of businesses from shopping centers to real estate companies to restaurant chains, a gas station and even a world famous aquarium.

In this 60-minute webinar, we will cover:

Essentials of starting a business with a partner
Smart strategies for adapting to a slow economy
How to harness change to your advantage
How to be responsive to customer preferences and demand

Come prepared to take a lot of notes, as Basil always has a lot of stories to tell and wisdom to share about the ups and downs of running businesses.

https://www3.gotomeeting.com/register/652266126

Hope to see you on the webinar on the 29th!

How to Find Good Independent Contractors for Your Business

John Corcoran, Esq. — Tue, 21 Feb 2012 06:15:50 +0000

One of the common complaints I hear from other attorneys is the difficulty of finding good independent contractors to help when their practice gets a little too busy for them to handle on their own.

It’s a problem that isn’t unique to the legal profession. A lot of entrepreneurs struggle with hiring good independent contractors to help as their business picks up.

There are simply times when entrepreneurs and business owners may need to bring on extra help, whether they are a small startup or a large company.

However, it’s not easy to find good, reliable support. Many independent contractors are unreliable, unavailable when you need them, or their work quality is not up to speed.

There are actually many options when it comes to searching for and utilizing independent contractors.

Here are a few of the basic options:

1. Placement Agencies

One common source for contract staffing is placement agencies. The benefit of these agencies is they have done the work of sorting through and vetting hundreds or thousands of job seekers, with the goal of finding someone who is a better fit for your needs.

The drawback of placement agencies is the additional cost. “Contract recruitment agencies have a set percentage or fee which they recoup and this doesn’t vary that significantly, regardless of the hourly paid to the contractor,” said Mark Gainer, an attorney and owner of Legal Additions LLC, a firm which does permanent and contract legal placements in San Rafael, California.

2. Other Professionals In Your Industry

One great source for finding extra help is simply by talking to other people in your line of work. You can draft up an email to your equals at other companies and tell them you need extra help. You may find someone whose practice is currently a little slow and would be willing to do the work.

Or other people may be aware of a recent graduate who is looking for extra work.

3. Online Independent Contractor Resources

Odesk.com, Elance.com, and vWorker.com are three websites which are devoted to connecting up people who need work and companies who need help. These sites have thousands of workers listed, and you can either sort through resumes or post your own job and wait for job seekers to come to you.

The sites have great features like the ability to hold funds in escrow and the ability to monitor your contractor’s progress on your job.

One of the real values of these websites is their rating systems. Anyone who has bought or sold something on eBay knows the importance of positive feedback. Most of the independent contractors will work very hard to please people who hire them because they know that they need positive reviews in order to get future gigs.

4. Craigslist

Craigslist has a tremendously popular jobs board, and you can post a job announcement for $75. However, there are also two less expensive workarounds.

You can post a temporary position in the “gigs” section for free, and nothing is stopping you from later hiring that person permanently. And if you do hire a temporary worker permanently, you will not have to pay a multi-thousand dollar fee like you would had you gone through an agency.

There is also a section on Craigslist called “Resumes” which allows any job seeker to post their resume or qualifications. If you search in this section for “lawyer,” “attorney,” or “paralegal,” then you can find just lawyers, attorneys or paralegals who are looking for work.

As with any hire, you should verify their qualifications by calling their references before making a hiring decision.

5. University Job Boards

Check out local university job boards. Most universities have dedicated jobs websites where they will allow you to post an ad to their system for free.

You may also want to contact the local university career offices directly. I contacted my law school’s careers office director, Bryan Hinkle, and he said he recommends that employers post a job to the law school’s LinkedIn Group, which has approximately 1,800 members.

6. Post a Notice on Your Website or Blog

You may also draft up a job description, the duration of the assignment, and any other requirements and post it on your website or blog. You can then share this post by emailing the link to others or by posting it to social networks such as Facebook or LinkedIn.

Do you have any better suggestions for finding good independent contractors? Please leave your ideas in the comments below.

What is Your Unique Selling Proposition (USP)?

John Corcoran, Esq. — Thu, 16 Feb 2012 06:59:41 +0000

The following is a guest post by Anitha Cadambi.

As a young, critical consumer, I often appear dumbfounded while at a grocery store.

In almost every grocery store, there are twenty different kinds of toothpaste. Which one do I pick?

Naturally, I want the better tasting one, maybe the better looking one (After all, I am a woman and appealing packaging often trumps quality, at face value).

So how do I make this decision and more importantly why do I pick product A over the 19 others staring at me?

…. This leads me to one question: What is your Unique Selling Proposition (USP)?

Now, you may think this is a rather redundant question to ask yourself. Obviously you have thought about this.

After all, you have a 20 page business plan and your USP is buried somewhere in those pages.

But is it really?

4 Tips to Help Sell Your Product Or Service:

1. Think Charity: The case of “Toms” shoes

Spending $90 on a pair of shoes seems absurd. But what separates Toms from other shoe manufacturers is the charitable element associated to their shoes. For every pair of toms sold, one pair goes to someone in need.

Unique? Absolutely…. Not to mention the fact that their shoes are extremely fashionable.

Toms recently took their idea one step further. A new line of ballet flats for women incorporating the same charitable concept is launching soon.

I am hoping they based their study on the fact that women are more charitable than men (speaking only from personal experience) and more than willing to “buy a pair of shoes for the sake of charity!”

2. Think Exclusive: The case of “Sparkology” Dating Website

In today’s day and age, almost everyone has used a dating website once in their life. And for those of you who haven’t you have probably at least thought about it!

This leads me to Sparkology. A dating website based on an invite only concept and membership for men is limited to only those who graduated from top ranked Universities.

Unique? Absolutely….

3. Know your Audience: The case of “GeoGirl” Makeup

GeoGirl is a line of makeup that targets young teens. Only recently have companies begun to target this group of girls.

Prior to products like GeoGirl, young girls who wanted to use make-up had to buy adult make-up. GeoGirl was clever in the fact that picked their demographic (one that had not been target before) and created and marketed their product accordingly.

Knowing your audience and thinking exclusive compliment one another.

4. Know your Brand: The case of “Corona” Beer

I recently had the opportunity to meet with a very successful branding expert. He shared with me the story behind Corona beer. When Corona was introduced, the market already had a monopoly of beers. However, all of these beers were night beers – that is, beer you drank in the evening.

What did Corona decide to do? They branded themselves as a “daytime beer.” And not any ordinary day beer – but one that transports us to the beach and eliminates the rest of the world!

The point is: businesses need to evaluate their own brand because you are only as good as your brand.

What is your brand? How is it unique? Let us know in the comments!

Anitha Cadambi is a 2011 LL.M graduate from USC’s Gould School of Law who recently passed the New York Bar Exam. She has an LL.B from the University of Pune, India. She can be reached at anithacadambi@gmail.com.

Twitter: @AnithaCadambi
LinkedIn.

How to Negotiate for Fun and Profit: Tips for Entrepreneurs and Business Owners [Free Webinar]

John Corcoran, Esq. — Tue, 14 Feb 2012 07:50:30 +0000

Are you an entrepreneur or business owner who has to negotiate with customers, vendors, business partners and others on a weekly basis?

Do you want to bring in more revenue for your business while enticing more partners to work with you?

If so, this free webinar is for you.

In the session we will be covering:

- Negotiation Tactics: How to make every negotiation a “win-win” for you and your negotiating partner
- How to Assess the Landscape and Understand Your Partner’s Hopes, Dreams and Fears Before Every Negotiation
- Quick Tips to Win Negotiations With Customers Without Losing Business
- Essentials of Negotiating with Business Partners to Make People Yearn to Work With You
- Smart Strategies to Increase Revenue Through Savvy Negotiation Tactics

You can register for free right now (limited space available):

https://www3.gotomeeting.com/register/544341942

Your speaker will be John Corcoran, Esq., who is a small business attorney, advisor, and editor/publisher of California Law Report (www.CaLawReport.com), a well-read blog that provides advice for entrepreneurs and business owners.

He will be sharing his tips gained from over 15 years of experience as an attorney, small business consultant, and former White House aide.

Get ready to take out a pen and paper and take notes, as you will walk away with pages of concrete tips you can implement immediately.

Here’s that sign up link once again:

https://www3.gotomeeting.com/register/544341942

How to Know When You Need to Pay for Workers’ Compensation Insurance

John Corcoran, Esq. — Fri, 10 Feb 2012 06:22:23 +0000

There are so many things you need to know when you are a business owner… like what color to use for your logo, where to get stationery, and whether to stock the company fridge with Diet Cokes or Diet Pepsis.

It’s enough to make your head spin.

Here’s a tougher decision — if you are using employees or independent contractors as your business grows, how do you know when you need to pay for workers’ compensation insurance? Here’s your answer below.

– John

Guest Submission by Anitha Cadambi. You can find out more about submitting a guest post here.

Did you know? An employer needs workers’ compensation coverage for any employee it hires, even if it’s just one employee, and even if it’s just temporary employment.

Does this Apply to Out of State Employers?

Yes. Out-of-state employers may need workers’ compensation coverage if an employee is regularly employed in California or a contract of employment is entered into in California.

Will I be Penalized for Failing to Carry Insurance?

The California Labor Code makes the failure to carry workers’ compensation insurance a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail up to one year, or both.

The Division of Labor Standards Enforcement can even issue a stop order against me for failing to carry workers’ compensation insurance. This order prohibits the use of employee labor until coverage is obtained.

Do I Still Need to Pay an Employee Who is Injured on the Job if I am Uninsured?

In the event that a work related injury occurs at a business that is uninsured, an employee can still sue either under the Workers Compensation Act or by civil suit.

The State Uninsured Employers Benefits Trust Fund (UEBTF) is a special fund used to pay the claims of employees who get injured or become ill while working for an illegally uninsured employer. The UEBTF pursues reimbursement of expenditures from the responsible employer through all available avenues, including filing liens against their property.

However, payments are not made automatically, and usually a detailed fact finding procedure is followed before a claim is awarded.

But wait……..Who Is an Employee?

The California Labor Code broadly defines an “employee” as every person in the service of an employer under an appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed. (Note: the Labor Code has excluded certain individuals from the definition of employee.)

Two Important Points to Take From This Definition:

If I only hire independent contractors, I do not need workers’ compensation insurance.

Remember to verify that your employee is in fact an independent contractor; otherwise you will be responsible for workers’ compensation benefits. (An interesting discussion on employee v. independent contractor can be found on the California Department of Industrial Relations website).

The definition includes undocumented workers.

Finally…. whether you choose to have workers’ compensation insurance or not, your employee can still contact their local Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) office and report your uninsured status.

Twitter: @AnithaCadambi

LinkedIn.

(This post was inspired by Adam C. Aparicio, Attorney at Law ).

How Entrepreneur Sam Glover Built the #1 Legal Marketing Blog on the Web, Lawyerist.com

John Corcoran, Esq. — Mon, 06 Feb 2012 07:11:36 +0000

I recently had the pleasure of interviewing a guy who I’ve admired for quite some time, Sam Glover.

Sam may not be a household name like other well known entrepreneurs such as Richard Branson of Ted Turner, but he may get there one day.

Over the past couple of years, Sam has built Lawyerist.com into one of the most popular legal marketing blogs on the web, with a focus on small firms and solo practitioners.

He also created a members-only forum (free to join) called the Lawyerist LAB where attorneys can swap ideas and tips about the profession. And he also bought and revamped Bitter Lawyer, which is a legal humor blog.

Oh yeah, and he also has a family and his own legal practice.

I know a lot of lawyers who read Lawyerist, and I know I relied on it heavily in making the decision to go out on my own, all the way down to using Lawyerist before I made any decisions about purchases for my new office.

I’m not sure how he does it all, but we’re glad he is able to balance everything.

Enjoy!

Interview With Entrepreneur Sam Glover, Founder of Lawyerist.com

John Corcoran: You are a rare breed — a really entrepreneurial lawyer who both advises startup businesses and forms and runs businesses himself. Did you always know you wanted to start businesses in addition to practicing law, or was there something that dissatisfied you with the practice of law that led you to form Lawyerist and your other projects?

Sam Glover: I never wanted to start a business, actually. I started my firm after I left a medium-sized firm and got tired of applying for jobs I knew I didn’t want. Starting my own firm was my first introduction to running a business, and I liked it. I enjoy the business aspects of running a law practice as much as the actual lawyering.

But Lawyerist was never meant to be a business. I was just frustrated with the awful law practice software I was trying to work with, as well as with most lawyers’ fear of innovation. At least that is how I perceived it. It became a business much later, and that was more due to Aaron Street, who was a friend from law school. He saw Lawyerist’s potential, he had some time on his hands to work on the business, and he turned out to be right.

John Corcoran: You have an active law practice, a popular law practice blog, an advanced forum with advice for solo practitioners and small firm attorneys, a legal humor blog and, oh yeah, a family. You and your wife just had your second child. I don’t know how you keep all these balls in the air. How do you divide your time between your various different projects?

Sam Glover: That’s funny. I don’t feel very busy right now, actually. Keeping Lawyerist going is a (very) part-time job, and I keep my client list small so that I’m in no danger of getting overwhelmed. Plus, I don’t have any day-to-day involvement in Bitter Lawyer; Greg Luce keeps that going.

John Corcoran: A lot of lawyers are frustrated with the practice of law and the pressures of the billable hour and dream about branching out and doing something different, but are paralyzed from doing so because they like their lifestyle, or steady paycheck, or colleagues they like. How did you avoid getting caught up with that, and what advice do you have for both lawyers and non-lawyers who dream about starting a company?

Sam Glover: If you want to start a business, just do it. I guess some people need a life coach or whatever, but turning Lawyerist into a business just made sense to me, so when Aaron asked me about it, I jumped on the opportunity. Starting a business is pretty exciting, and it’s quite possible I’m a serial entrepreneur.

John Corcoran: Awhile back you purchased BitterLawyer.com, a legal humor blog. What inspired that decision, and how is it going?

Sam Glover: Kind of like with Lawyerist, the opportunity presented itself, and we decided to jump on it. It’s going well, and Greg has done a great job reviving the site. It hasn’t been completely smooth sailing, but we’re excited about Bitter Lawyer’s future.

John Corcoran: What advice do you have for entrepreneurs who are just getting started? Do you recommend working with a partner? Do you recommend going it alone? When should people know it’s OK to quit their day job and focus all of their efforts on what they really want to do?

Sam Glover: The most important thing is to think it through beforehand. Make sure you know what you want to do, and how you intend to make money. I like working with a business partner. It makes you accountable to someone, and you feel like a jerk if you don’t do your part. But it has to be the right person.

Starting a business on the side sucks. You can’t really build something while your energy and attention is focused somewhere else. Lawyerist was a side business for a long time, and I had a really hard time keeping up. But at some point, you have to just close your eyes and jump. That’s what I was doing when I sold my consumer rights practice last March so that I could make Lawyerist my main job.

John Corcoran: In this economy, many entrepreneurs need to keep their costs down to survive. How have you kept your costs down as you have built your businesses?

Sam Glover: I think that unless you are hemorrhaging money, it’s probably best to focus elsewhere. Running a law practice takes money, and you can’t skimp when it comes to serving clients.

One of the most popular posts I have written was Start a Solo Law Practice for Under $3,000. At the time, I was just trying to demonstrate how relatively inexpensive it is to start a firm. But it feels like too many people have taken it literally.

I get so frustrated when I hear someone say they just can’t afford a document scanner or Microsoft Office as part of their startup budget. Really? If a few hundred dollars is a make-or-break issue, maybe you shouldn’t be starting a firm.

I pay for things that make me more efficient, even if there are cheaper options. And I spend the money I need to spend to serve my clients. Sure, I think about my overall overhead, and I avoid wasteful spending (I just dropped my fax service because I haven’t sent or received a fax in months), but I try not to worry about cutting every last expense.

John Corcoran: A lot of advocates of blogging say that blogging regularly opens up doors in ways they didn’t expect. Are there any ways that blogging has opened up doors for you in unexpected ways?

Sam Glover: Well, if you mean Lawyerist, then no. But I have written Caveat Emptor almost since I started my practice, and I have been surprised about the attention I have gotten because of it. It’s even been cited in a couple of lawsuits.

John Corcoran: You clearly enjoy reviewing technology for Lawyerist, so much so that we suspect you started Lawyerist just so you had an excuse to play with the latest tech gadgets. Actually, you could say that you found a way to make money doing something you like doing, or would be doing anyways. What does that say about focusing on your passions when it comes to business?

Sam Glover: If I’m not happy doing something, I generally don’t do it. That’s a character flaw, but my character flaws have dictated my approach to business.

I went paperless because I’m lazy and don’t like sorting files or carrying around stacks of paper. I don’t like tracking time, so I don’t do hourly billing.

I’m crabby about bad technology and law practice inefficiencies, so I created Lawyerist as a relief valve. So I guess the lesson here is to harness your character flaws.

[Webinar Recording] How to Sell Your Business for Top Dollar with Kevin Waldron

John Corcoran, Esq. — Thu, 02 Feb 2012 15:47:08 +0000

For those who missed it, here is the recording of our recent webinar with entrepreneur, business coach and business exit plan consultant Kevin Waldron.

There is a ton of valuable advice and tips in this video, including:

How to build a next generation management team so your business can function without you present 24/7
How to institutionalize client relationships and marketing
How to lay the groundwork so that when you are ready to sell your business, you have buyers interested in buying

Here’s the video:

I suggest you close out all your other windows, maximize the video screen, and take out a paper and pen because you will find Kevin has a number of tips you can implement right away — which will both generate revenue today, and increase your company value for when it’s time to sell.

For those who are interested in getting more help with implementing Kevin’s suggestions in the video, we are starting a six-week group coaching program on Tuesday, February 7, 2012 at 4:00pm PST called the Business Profit Academy.

You can read more about it here:

http://calawreport.com/businessprofit/

Let us know what you think in the comments below!

California Law Report

How To Avoid Getting Sued When Starting A Small Business

Ensure that your products and services do not violate any patents or copyrights

Ensure that your designs, logos, and company name don’t violate any trademarks

Remove yourself from liability

Write clearly-worded contracts

Don’t poach your talent

Related Reading:

How to Choose an Appropriate Form For Your Business

What Is a Sole Proprietorship?

Should I Form a Partnership?

How About a Limited Partnership (LP)?

What Is A Limited Liability Partnership (LLP)?

Is a Limited Liability Company (LLC) Right For Me?

What Is a “C Corporation”?

Should I Form A “S Corporation”?

Related Reading:

Top 10 Small Business Ideas for New Graduates on a Budget

10 Small Businesses You Can Start Easily That Won’t Break the Bank

1. Event planner

2. Computer Repair Service

3. Dog groomer

4. Gift basket designer

5. Professional Researcher

6. Translator

7. Child Care Provider

8. Consignment Shop Owner

9. Landscaper

10. Personal Cook

Related Reading:

[Free Webinar] How to Run a Business in Today’s Economy: Tales from the Front Lines of a Lawyer/Entrepreneur

How to Find Good Independent Contractors for Your Business

1. Placement Agencies

2. Other Professionals In Your Industry

3. Online Independent Contractor Resources

4. Craigslist

5. University Job Boards

6. Post a Notice on Your Website or Blog

Related Reading:

What is Your Unique Selling Proposition (USP)?

4 Tips to Help Sell Your Product Or Service:

1. Think Charity: The case of “Toms” shoes

2. Think Exclusive: The case of “Sparkology” Dating Website

3. Know your Audience: The case of “GeoGirl” Makeup

4. Know your Brand: The case of “Corona” Beer

Related Reading:

How to Negotiate for Fun and Profit: Tips for Entrepreneurs and Business Owners [Free Webinar]

How to Know When You Need to Pay for Workers’ Compensation Insurance

Does this Apply to Out of State Employers?

Will I be Penalized for Failing to Carry Insurance?

Do I Still Need to Pay an Employee Who is Injured on the Job if I am Uninsured?

But wait……..Who Is an Employee?

Two Important Points to Take From This Definition:

If I only hire independent contractors, I do not need workers’ compensation insurance.

The definition includes undocumented workers.

How Entrepreneur Sam Glover Built the #1 Legal Marketing Blog on the Web, Lawyerist.com

Interview With Entrepreneur Sam Glover, Founder of Lawyerist.com

Related Reading:

[Webinar Recording] How to Sell Your Business for Top Dollar with Kevin Waldron

Related Reading: