Attorney and entrepreneur Wesley Henderson shares practical legal insights every small business owner needs to protect their business and operate with confidence.

Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of The How of Business podcast show – dedicated to helping you start, run, grow and exit your small business.

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The following is a full transcript of this episode. This transcript was produced by an automated system and may contain some typos.

Henry Lopez (00:15):

Welcome to the How of Business podcast. This is Henry Lopez. My guest today is Wesley Henderson. Wesley, welcome to the show,

Wesley Henderson (00:22):

Henry. Thanks for having me. Excited to be with you.

Henry Lopez (00:24):

Same. Wesley is an attorney, and so he’s going to share with us some legal considerations. We’re going to jump around various topics that he advises small business clients on, and I think we’re great topics for us to discuss. So that’s what we’re going to focus on this episode. You can find all of the Howa business resources including the show notes page with this episode because Wesley has a special offer for us, and I’ll have the link for it on that show notes page. You can find that as well as information about my one-on-one and group coaching programs@thehowabusiness.com. Also invite you to think about supporting the show and joining our business community on Patreon and subscribe wherever you might be listening so you don’t miss any new episodes. Let me tell you a little bit more about Wesley. Wesley Henderson is more than just a business attorney.

Henry Lopez (01:08):

He’s also an entrepreneur who understands firsthand the challenges and opportunities of running a business, particularly a small business. As a founder of multiple ventures, including Henderson and Henderson driving for Downs Incorporated and drafted legal, he brings real world experience to his legal practice and to our conversation today, Wesley helps business owners across South Carolina, but the services that he also offers, for example, the contracts that we’re going to talk about, those are available to any of us nationwide, but he’s based in South Carolina where he navigates complex legal issues from startup formation and partnership agreements to employment law and business litigation. His goal is to provide practical business-minded legal solutions that help entrepreneurs protect and grow their companies with confidence. He lives in the Charleston, South Carolina area. So once again, Wesley Henderson, welcome to the show.

Wesley Henderson (02:01):

Thank you for having me. Look forward to chatting with you.

Henry Lopez (02:03):

Absolutely. I always like to start with legal episodes with a quick disclaimer, so if you’ll just give us a quick legal disclaimer please.

Wesley Henderson (02:10):

Yeah, I’m going to try to be as helpful as I can today, but anybody on the other side, I don’t know anything about their particular circumstance. I’m not your lawyer, but I’d be welcome to having that conversation. But everything I’m saying is trying to be as helpful as possible, but again, there’s nuances in the law, so you might want to follow up with your own lawyer or contact us. Excellent, excellent. Well said. Thank you for

Henry Lopez (02:32):

That. So I’m always curious, just personally, you’ve been an attorney for how long now?

Wesley Henderson (02:36):

2010, 15 years, November of 2010.

Henry Lopez (02:40):

What do you at this point, one of the things that comes to mind that you enjoy most about being an attorney?

Wesley Henderson (02:46):

My current iteration, which I guess I’ve been in for about 11 years, is my favorite. I’m one of those who started off in that corporate big multi-regional law firm and I never got the same satisfaction or purpose out of that as I do now, which is one-to-one, working with business owners. I represent business owners entirely. Being able to employ creativity to solve problems and being able to help solve actual problems your audience may not know. Lawyers are billing hours and point twos and point ones. Sometimes it feels like a lot of homework when you’re at a really big law firm and ever since starting our own firm, it feels a lot more like we’re actually providing a very valuable service that a business owner can help navigate something that’s otherwise difficult and still maybe difficult, but we’re their partner trying to help them get through it the best they can. More and more we like to be in the preventative side of it, so I really enjoyed working with clients in their business. Also, as ours has grown, I’ve really enjoyed running, trying to step into the operations and learning more about the business of a law firm and just the practice of law, which is I probably split my time 50 50 on that at this point.

Henry Lopez (03:57):

Certainly, I’m sure you see much more impacted when you were in the corporate environment on the individual business owner is much more impactful. I got to think the work that you and your team does, right?

Wesley Henderson (04:08):

Oh yeah. So I was working for a lot of the large law firms represent insurance companies.

Henry Lopez (04:14):

I see, I see.

Wesley Henderson (04:15):

And not only that, but I was low man on the totem pole and so getting handed what felt like homework and I thought you felt like you’ve already paid your dues getting through, but it’s part of the process really. I learned a ton and it was very helpful and usually I recommended to young lawyers who want to go out on their own and to go get some experience. There’s a lot of great lawyers at those law firms and you learn a lot by doing it lot to learn.

Henry Lopez (04:40):

Did you think you were going to start your own firm when you were in law school? Was that the goal?

Wesley Henderson (04:44):

No, I didn’t really take it as a goal, I don’t think. I never had the tenure plan. I just kind of went through, was always pretty decent at school and did well in some of the LSAT and that sort of thing, and so just kind of naturally went into it was interested, but I had no intention to or not to. I will say I took a solo low practice or small firm course in law school, so maybe I did more than I realized and I can’t remember if I did it, I thought it was easy or if I did it I wanted to. So there’s always been a little entrepreneur. I was always selling this or that when I was 10 years old or whatever. Yeah.

Henry Lopez (05:20):

Alright, well let’s get into it. Tactically, I wanted to start with the topic. That’s often the big question, especially for people who are looking to start their business is a legal entity. Do I need a legal entity? Why can’t they just operate as a sole proprietor? And lots of people do, especially solopreneurs are operating as a sole proprietor. Is it an LLC? Is it a corporation? I’d like to start with your guidance on why, well, my opinion is and experiences we should limit or not operate as a sole proprietor, but what’s your opinion and thoughts on that?

Wesley Henderson (05:50):

Yeah, my opinion is you’re correct. You obviously have a lot of business experience and so I think that you’re right to your group here and your audience and your group coaching. As soon as you start doing anything in the market, you have exposure. I wish that wasn’t the case. I know people want to tiptoe in and test this or that, but we see it all the time. Things go south very quickly and you’re usually not the biggest target for someone to go sue if you’re new out there, but if you cause damage to somebody or something goes wrong, you’re going to get sued personally and they’re going to look for a home or a car, jewelry or whatever it is, or they’re going to be a thorn in your side, send you to collection, whatever it is, and it happens like that and there’s a lot of personalities that you don’t see it coming from, so you kind of want to always treat everyone great as a client, but with the same sort of seriousness that there is exposure if things don’t go accordingly. It’s always my advice, it depends on what state you’re in. The state I’m in, it’s incredibly inexpensive to get an LLC. There’s no annual fee, there’s no annual paperwork, it’s 145 bucks to file the LLC, that kind of thing.

Speaker 1 (07:06):

Some

Wesley Henderson (07:06):

States are a lot more and so maybe you can sometimes convince yourself to get insurance instead, but insurance does a different thing than LLCs. LLCs step in as a different entity than you are, meaning if something goes wrong, the LC gets sued, whereas insurance decides one, whether the thing that’s happening gets covered and if they do decide to cover you, they’re doing it on your behalf. I’ve got a client right now that’s a mold company do mold remediation out of our law firm and so there’s a big mold issue and there’s about a dozen people involved in this lawsuit or lawyers and the insurance company for my client is denying coverage on a mold claim and he does mold for a living. I say that just to, I think insurance is good, but it’ll surprise you go and get it and you don’t ever think about it and then you start looking through the language and you’re like, what did you cover?

Henry Lopez (08:00):

Yeah, no, I am glad you clarified that and gave that example. I always have explained it that insurance is kind of an umbrella, a little bit of a shield and we must have it, but at the end of the day, what gives us the best liability protection unless we commit fraud and commit a crime is that the assets, our personal assets are separate from the legal assets of the business. Right.

Wesley Henderson (08:20):

Yeah, I think that’s a good way to explain it. They’re kind of two different shields. We always explain it as your first thing is your contract and your conduct too, and then you’ve got insurance and then your catchall is this LLC, and it’s important to hear stories like the one I’m telling you, you can rely on the insurance and they’re, they’re not your friend always. I don’t know if you’ve been on the other side of ’em or with ’em. We use it, don’t get me wrong and I 100% recommend it. I’m not saying that you just can’t rely on it with full. Oh no.

Henry Lopez (08:51):

I’ve had to sue insurance companies before to give me what I was supposed to get. Right. So yeah, it’s a process, but yeah, but great point on that. I agree with you. That’s been my experience on the sole proprietorship. Now the big question everybody always has and I never give that direct advice because I can’t, I’m not an attorney and so we’re not going to give that direct advice here to anybody who’s listening, but generally speaking, what are the considerations on LLC versus a corporation and then of course you can explain the S corp component of it.

Wesley Henderson (09:19):

Yeah, yeah, I think I can clarify it a good bit. The corporation has been around a long time. It’s clunkier, it’s bigger, it’s Microsoft and Walmart. There are some reasons why smaller so when your audience might have a corporation, but they’re usually very, very specific tax reasons. The default is you’re going to start with an LLC unless someone tells you to do it. Otherwise the corporation is a lot more expensive, a lot more effort. The legal, even in South Carolina, you have to have a lawyer file your corporation. Oh, interesting. Cannot file your own corporation. A lawyer has to sign just to give you an idea of obviously the costs go through the roof compared to being able to use something like our service or a legal zoom or do it on your own, that kind of thing. So the lcs are newer, came around the eighties, they’re done by the states.

Wesley Henderson (10:08):

They’re designed to be more flexible. They’re designed for people like us who want to start a business and have some flexibility and kind of grow with it. You can grow with it, you can add people to it, you can sell parts of it, you can control who gets to vote. And so it’s really a lot better to work with I think, than a corporation. The S-corp is interesting thing. I’d say most of the internet gets it a little bit off. It’s kind of like a misnomer. So it’s called an S-corp, but it’s a tax election,

Henry Lopez (10:37):

A tax treatment or election. Yeah,

Wesley Henderson (10:40):

So when you’re looking at your entity, it’s an LLC is one, a corporation, is one a sole proprietor, is one a partnership is one partnership being two people who don’t have an LLC basically, and so you’re double exposed. That’s probably the worst, but then there’s tax selections that are different. An S election or S corp can be out of an LLC and often very, very often is often recommended. We’re not tax pros, but that’s the consideration there. So sometimes we’ll have people say, should I do this or that? I’m like, just get in the LLC and then you can talk to an accountant and they can file the form to get you as an S and you can sometimes do ’em retroactive. You’re supposed to do it within 90 days or some amount of days, but you can still make that election out of it. Sometimes people feel that that’s an either or. It’s actually an and it’s a big difference of the and because sometimes people get a little paralysis not knowing which one to do and I’m like, if I’m giving advice on something like this, get the LLC at least and figure that out. You don’t want to be exposed like we were just talking about.

Henry Lopez (11:46):

Agreed. Agreed. Yeah. And in my experience, obviously from a tax perspective, so you definitely want to consult with your CPA, but that’s I think just about every business I’ve had almost exception of maybe one because it was already a corporation LLCS corp treatment, which makes it a pass through entity, therefore you avoid the double taxation essentially in a simplified way. Fair. This is Lopez briefly pausing this episode to invite you to schedule a free coaching consultation with me. I welcome the opportunity to chat with you about your business plans and offer the guidance and accountability that we all need to achieve success. As an experienced small business owner myself, I understand the challenges you’re experiencing and often it’s about helping you ask the right questions to help you make progress towards achieving your goals. Whether it’s getting started with your first business or growing and maybe exiting your existing small business. I can help you get there. To find out more about my business coaching services and to schedule your free coaching consultation, please visit the how of business.com. Take that next step today towards finally realizing your business ownership dreams. I look forward to speaking with you soon.

Henry Lopez (13:02):

Now I think that also to your point, sometimes the reason we don’t necessarily have to stress about it in that first year is we probably are going to have a loss in that first year. So that kind of passes through so it can get done. Don’t overthink it. And to your point about how cheap it is, I’ve created LLCs in Texas and Florida and in the state of New York have gone to the state websites. It’s relatively easy and very low fees. Now for example, Florida has an annual fee. Texas has what they call a franchise tax even though it’s not a franchise. So yeah, there’s some additional filing fees, but it’s easy to do yourself especially, and this is something I hadn’t put on the list to talk about, but I want your thoughts on Wesley. I always advise people that when you need an attorney definitively is when you have more than just yourself owning the business. When you’re going to have to develop an operating agreement that needs to cover somebody else, what are your thoughts there? In other words, if it’s just me, I could go with a standard operating agreement. Is that fair or what am I missing there?

Wesley Henderson (14:02):

Yeah, I think that’s fair. Even out of our law firm when we have plenty of people who come to us to set the whole thing up and we’re happy to do it, but the fees are just so much lower than if there are more than one person because we just use a pretty straightforward template and I explain it to ’em, there’s nothing for us to customize because you get to make all decisions, but I say if you’re going to bring somebody else on, we need to have different conversations so that we really analyze when the voting is there. A manager managed and there are certain types of filings like term versus perpetual that have consequences, but all those consequences are typically when there’s a second person. Even on our drafted legal website, it is the multi-member. We have a clause in there that says when we’re making a certain amount of money, we’ll go get a lawyer.

Wesley Henderson (14:51):

We basically encourage people to have the big conversations, what’s our vision? Which I think helps drive a lot of it. Who owns what because you wouldn’t believe how many disputes we have come through the door in the matter of a year and there’s no paperwork that says who owns what. It is nuts. So it just kind of walks through the very basics just if people don’t have the budget to do that and they want to go play with somebody, but it still says you need to talk to a lawyer, this stuff can get really tricky later on.

Henry Lopez (15:19):

Absolutely, and I talk about this so much on this podcast, Wesley, because I prefer working in partnership and I’ve had partnerships that have worked out well and others that have not, but I see so many people going blindly into partnerships. They’re in that honeymoon phase even with family. Oh, what could possibly go wrong? A lot goes wrong. Anything you can imagine goes wrong, especially once money gets involved, either because we’re making it or losing it, people’s goals change. So the tightness of that operating agreement I have found is critical to either not ending up fighting and hating each other, ensuing each other and even more critically killing your business.

Wesley Henderson (15:58):

You bring up a good point as I always try to explain to people, it’s not that the person you’re going into business with is going to turn on you and start stealing money. I mean it happens, but life changes and you both may end up with spouses and family. You might have one spouse making a million bucks a year and their need for the business is different or someone gets sick and they got to move or parent just life throws a bunch of different things. So to remain in that same alignment that you have in the day you start, it is impossible. It’s impossible. So having the right conversations and being a lot of this is too just communication. When we bring people on, we force them to have some conversations that maybe other law firms that are about the business that I think just help have the right conversation.

Wesley Henderson (16:44):

There’s things that the operating agreement can do, but there’s some things you can’t legislate everything. You can’t put it all in there. So you got to have the ability to work with each other and if you don’t have that, you’re going to have trouble. And I’ll tell you, here’s what I’d normally see when we get disputes and there’s probably 70% of ’em. It’s one person thinks they’re contributing way more than the other, whether it’s through sheer hard work through more sales, through their smarter, there’s some sort of resentment that develops and I think that grows over time and a lot of that is by not defining roles right out of a business, there’s no real roles. You kind of like you do this, but as you get bigger you really need to step into your different roles and continue to work on respecting each other. And disagreeing is fine obviously, but working within that. So that’s usually what I’m seeing. If people are looking for something, if you feel that way or you think your business partner’s feeling that way, get some coffee, have the conversation now once there’s the lawyering up it becomes very expensive.

Henry Lopez (17:47):

Yeah, well said. Wesley couldn’t agree with you more of my experience personally and with clients that I’ve coached. I think that’s incredible advice to take on this point, that communication because to your point, if we wait until now, I am so mad at you that I can’t see straight, that’s hard to then come off of now my feelings are hurt, now I’m resentful to the nth degree. We got to communicate and got to realize that to your point, that alignment that we may have had upfront is going to change over time. Right? Nailed, I mean you nailed it changes in a married couple. How the heck do we think is not going to change between partners to or more partners?

Wesley Henderson (18:25):

Yeah, I think you nailed that.

Henry Lopez (18:26):

Yeah, thank you for advice on that. Alright, so speaking of common mistakes talk to you about partnership issues and the mistakes of not going with a legal entity and operating as a sole proprietor. What else do you see Wesley that are common mistakes to small business owners make from a legal perspective?

Wesley Henderson (18:42):

Yeah, I think you’re insightful on your questions early on. The entity is a big one. The partnership in terms of having that conversation and just a thorough and ongoing conversation with each other, preferably operating agreement, but again, it’s more than that. It’s more of a commitment to the business and to each other, but the operating agreement creates a lot of important conversations. So those are two big ones I’d say. People may hate to hear it, but having good contracts in place, the contracts is you don’t want to ever have to use ’em and if you do it right, you don’t ever have to use ’em when you don’t have them. We have disputes all the time and I think both sides will pass lie detectors saying, oh, they promised this and I promised that. I’m like, what am I supposed to do? I’m not a magician, I can’t recreate whatever y’all agreed to.

Wesley Henderson (19:35):

Sometimes it’s on email and sometimes there’s a text message but there’s a phone call and marketing. The beauty of the contract when they’re really well done is it protects both parties. Our contracts aren’t designed to sneak something in. Our contracts are designed to be extremely clear and say this is how we’re going to operate. I want to make sure you’re on the same page I am and it’s expectation setting. So when you lose that sort of moment where we’re like, this is it, these four corners, this is it, you lose the clarity of who’s doing what. An example of sort of a new freelancer would be, let’s say I’m designing a logo for you and you’re going to pay me 10 grand and you pay me five grand upfront and you just don’t like it and I go back and I keep working and you still don’t like it and you just never like it, but I’m doing, I’m 70, 85 times the amount of effort in, you still don’t like it so you’re like, I’m not paying you. I didn’t get a logo that I wanted compared to having an agreement where it says I’m going to do the best I can, I’m going to create a logo and then we will have two revision that will be my deliverable and upon that second revision, you owe me the remainder of the money and it’s all yours and you can do what you want. There’s a trigger point for when that final payment is owed,

Speaker 1 (20:48):

Right?

Wesley Henderson (20:49):

My job, I mean you’re wanting to make clients happy so don’t get me wrong, but you got to have a trigger for when that deliverable is met. We see this all the time with kind of new service professionals or providing a service and just kind keep working and keep working and keep working and they call it scope creep.

Wesley Henderson (21:05):

Sure. You’ve heard this term and the contracts not only it’s the end of scope creep, you can just point to it and it gives you some firmness. You can go above and beyond. I support being a hard worker for, but you got to have the line to draw when you know it’s going nowhere and you got to have the trigger that says, I’ve met my deliverables, I’ve done what I promised to do. You can’t build a business on just working endlessly over and you get two or three of those in a row and all of a sudden you’re out of money and your spouse is banging on your door, what’s going on? You spent a month on this or eight months.

Henry Lopez (21:41):

Yeah, that’s such a great example of actually thanks for sharing that because that is an example of where we think, well how do we define this? Well, you can put scope to it and you must put scope to it. And again, it doesn’t mean that I can’t go beyond that scope, but I’ve got some definition to it because you’ve got to protect yourself. There will be people that will abuse it. If you don’t, you’ve got to have something to fall on. It’s amazing to me how often I talk to clients and they have no agreements or contracts in place. I have a client right now and he’ll know who I’m talking about just because of the mention of it that had no agreements in place for a service that he delivers. And part of the idea probably was this was a business that was started by his father 30 years ago. Handshake kind of relationships. We don’t need contracts here. Our word is the value, and by the way, we let people out. It’s a month to month agreement anyway, so why have a contract that’s such a, first of all, maybe it worked 30 years ago, I don’t think it did, but in today’s day and age, we cannot afford to do that anymore, can we?

Wesley Henderson (22:38):

Yeah, I mean certainly I would love a world where the handshake was the thing, right? It is not the world that I see practicing law day to day.

Henry Lopez (22:46):

No.

Wesley Henderson (22:47):

And you’re creating these contracts not for your 95% of your clients you’re creating for that five really I’d probably call ’em one to 2% and you had no chance. You just kind of got fooled to begin with somehow and you took on a client that you shouldn’t have. Maybe your personalities were aligned. Maybe that’s just a difficult client, but there are oftentimes where I know there’s a client we don’t want to work for and it’s nothing against them, it’s nothing against me. It’s just the way I practice law. I know they’re not going to be happy.

Henry Lopez (23:15):

It’s not a fit. Yep.

Wesley Henderson (23:16):

It’s not a good fit. Certainly that takes some time to grow into That’s not what I was saying day one, I’m just

Wesley Henderson (23:21):

Trying to work and do everything I can. So you are designing for that 1%. I’m always trying to encourage people. We’re not calling everybody bad, we’re not saying everybody’s a problem. That 1% is there’s just going to be a problem and you want to have the agreement in place. There are things too as you’re growing your business that I would just point out is let’s say you’re growing some sort of agency business. Take the logo again. You’ve hired someone else and they’re doing the logo work and someone else is doing some sort of marketing or pay-per-click or some sort of thing where we’re growing off and we’ve got other people and you’ve spent five years, three years, two years developing this brand, developing a relationship, and then you got one person who’s kind of the project manager. It’s not fair for that person to go undercut you and take that client or pitch that client. So just in a simple agreement you say, look, you’re not allowed to solicit clients you worked with. It’s called a non-solicit. They apply to many things. It is a fair type of thing. The non-compete is a different kind of conversation when you’re

Henry Lopez (24:18):

Looking a lot of news lately here on the non-competes for employees, but that’s separate from a business part of a business agreement or contract.

Wesley Henderson (24:26):

Yeah, absolutely. And we represent employees on all these things. We represent employers primarily, but we see all sides of it and there’s no one, very rarely does someone say, oh, that’s unfair for me to not basically poach this kind of work. People do find there’s a different kind of conversation depending on the job, on the non-compete and someone’s ability to earn a living. It’s a little more nuanced. They’re certainly relevant and enforceable in a lot of areas. Sometimes they feel too much, but if you’re growing a business, you want to be able to protect what you’re investing into it. And so contracts can also do things like that. They can protect your trade secrets. Our business has been around 11 years now. So there’s all these things that don’t feel like trade secrets that actually are our marketing funnel. We have different marketing funnels, how we do referrals, like our internal rules on how we follow up with clients to make sure that we are providing the service. So as you develop these, if someone were to take all those and apply ’em to their own business, it’s a little bit unfair. So you just at least want to say you can go do your own thing, but I get to keep all my things.

Henry Lopez (25:28):

Yeah, all your intellectual property is yours and we clearly define that. That’s the other thing. I see that mistake often because my understanding, Wesley, correct me if I’m wrong, as we kind of take a little bit of tangent, if somebody creates something for my company as a W2 employee, I believe the default is that IP is mine. Although I may need to clarify that. If I have a contractor though that’s supposed to be explicitly stated in that contractor,

Wesley Henderson (25:53):

It’s work for hire, I think that’s the right understanding

Henry Lopez (25:57):

And that’s another area where I need an agreement or a contract, right?

Wesley Henderson (26:00):

That’s right. So I mean if you’re looking at the areas I want to see agreements, it’s with your client. So service agreement probably always going to be your most important one because it clients are just the most important clients or customers are the most important part of business. That’s just the way that is. So that is in a very important agreement. And then the second one is anyone you’re working with, whether employees or contractors, and it’s things like you’re saying, it’s just how much do we pay you? Anything you create for this is mine and you’re right, so authors are the inherent owner of what they create. If I’m creating a logo, I need to still assign that to you, right? You’re right in terms of the employee, but you still want to have that in there. Anything done pursuant to this job is mine. You don’t want to be fighting a fight. You didn’t have to fight.

Henry Lopez (26:45):

So even, let’s go famously, the guy who invented the post-it note for DuPont, I think it was he was an employee. Now maybe back then they didn’t have these explicit agreement, but do larger organizations now where even smaller organizations now have clarifying agreements in place even for a W2 employee on who owns the ip?

Wesley Henderson (27:04):

Absolutely. A sophisticated business or even like you’re saying, I would be shocked if you have one, if that’s the kind of role you’re in. Absolutely. Everything is IP assignment. A lot of times it’s a separate agreement, just like a non-compete is a separate agreement to draw full attention to. Got it. That usually depends on the role, what someone’s doing there, but yeah, I mean why would they leave it a chance? That’s your opportunity to be clear. It’s like we’re paying you for this, so this is what we get in exchange and as you’re starting a business, you do want to be thinking that way. That’s not a bad way to think It’s being provided the service. I don’t want to wake up in seven years and now we have this thing that’s working and I have to litigate who owns it when it was all originated by my undertaking.

Henry Lopez (27:52):

Yeah. Alright. You touched on, obviously we talked about ip, but trademarks I know is something that you like to also talk about, so give us your thoughts on trademarks.

Wesley Henderson (28:00):

Yeah, and I know you’ve touched on this in prior podcasts, just a 2 cents on trademarks is one, you got to make sure you’re not infringing on someone, so you don’t want to start a business and find out three years later that someone in Idaho had a federal trademark and they didn’t have a good website so you didn’t find

Speaker 1 (28:18):

Them.

Wesley Henderson (28:20):

So you want to go on the uspto.gov and search your trademark and you want to search different spellings, different ways to spell it, and you just want to do a couple variations and you’re looking for people in the same industry. Sporting goods is different than restaurant, so you’re still fine there. So that’s step one. Step two is eventually getting to the point where you own your trademark so someone else can’t be, I mean the whole idea is that the consumer’s not confused about who they’re buying something from. If I’m buying and my kids are buying Nike’s, they better be Nike’s not somebody just pretending to look like Nikes. Now more often than not, they’re kind of accidental in the real world, not someone intentionally ripping someone off, but I mean even just in Charleston, it comes up in my practice at least once every couple months where there’s an issue where someone thinks they’re getting something from a different person. There’s just so many businesses, the online nature spreads the exposure. So it’s a very important thing to look into. You can also use chat GPT to run it through a chat. GPTI was telling you before, the ability to search for trademarks is like 20 times easier than it was a year ago. So I would utilize that resource for sure, and then if it’s a close call, you might want to bring in a lawyer just to make sure you’re not wasting any money. But I always say don’t fall in love with a name as much as we love naming our business. Get one that you own. That’s

Henry Lopez (29:43):

Important. Excellent, thank you for that. Alright, well last topic I want to dive into is handling objections or disputes rather, not objections, disputes, whether it’s in between partners or with a client or whatever it might be or a vendor. One of the areas of practice expertise that you have in your firm’s mediation, so lemme ask you this way, what do you see as some of the common one or two common things that gets people into a dispute and maybe we can bring it up by partnership disputes. That’s often, we’ve touched on that already, right?

Wesley Henderson (30:11):

I would say money gets people into dispute.

Henry Lopez (30:14):

Okay,

Wesley Henderson (30:15):

Let’s say a business service. Somebody owes me money and they’re not paying it to me. You and I own business together and I’m working harder. That’s still money time. And then there’s just an ego element and a control element that always exists in the partnership. It’s kind of a unique separate thing that can be a little more resentment building in terms of the client facing, they didn’t pay the amount that was owed and that is a huge problem, especially for small businesses. That’s probably your number one problem. You can work on something we have in our drafted legal, basically a strategy laid out to minimize the chances of that happening and to give you all the power if you need to push into it to do that. The dispute thing in general, I would say if we’re stepping back, it is a preventative process. The contract itself is not the greatest thing.

Wesley Henderson (31:09):

You don’t have to be a lawyer to write a contract. Anybody can write a contract. It’s going through the exercise of asking the right questions. Did we address the things that become disputes? For example, what are the deliverables? When are they coming? When is payment owed? What happens if I don’t get paid? Who owns this? Can I steal your employee? Where am I going to sue you? There’s like 25 questions that come up over and over again and you just want to address ’em in your contract and verbally you want. One of the things we pride ourselves in our contracts is that people are proud to send them to the client. We’re not trying to send a, we hear a lot as you’ll get something offline or a chat GPT and they’re like, I don’t know what this is and I actually had this great client and I was embarrassed to send it. And so when we give ’em to ’em through our legal bundle, they become proud then because they know the client is also protected. Now you’re protected and you have to do what you’re saying, but it’s not this one-sided thing that someone’s going to look at and be like, I don’t want to work with this bozo. This is

Henry Lopez (32:08):

Nuts. It’s a bilateral agreement that the protects both parties here

Wesley Henderson (32:11):

And in a service agreement or something, it should be that’s if we’re selling a product, it’s take it or leave it and just buy it off the shelf or don’t, but you want to be on the same page and that doesn’t mean we set ’em up where you don’t have to negotiate. We set ’em up so that you’re proud of ’em and they say, okay, this is, I can work with us.

Henry Lopez (32:29):

Just so what comes to mind? I have a client that was building out a retail location, hired a general contractor, and there was language on what happens if were late on finishing the project, but no language as to what the recourse was. So then it became this unnecessary dispute. It didn’t escalate too much, but an unnecessary dispute and a lot of time and energy wasted figuring out, well, okay, what happens now that you’re late

Wesley Henderson (33:00):

And you can’t prove who’s right because in contract law you’re starting to look at materiality. Was this a material breach? So you need to just say it,

Henry Lopez (33:07):

Time

Wesley Henderson (33:08):

Is up in essence, this is a material breach and these are the consequences.

Henry Lopez (33:11):

These are the consequences,

Wesley Henderson (33:12):

X of dollars a day. And so you just don’t need to be clear, needs to be clear. Everybody needs to be able to read it so that when you and I work together, we’re excited, we’re on the same page. This will take its own journey. Every business does, every client relationship does every relationship we’ll have its own journey, but you’ve got some agreed upon rules on how we’re our expectations of each other and if there’s a deviation, there’s not that much fight to do. Somebody could come to me if there’s no contract. I’m like, you may be right, but I’m not saying we would win because of that, because you don’t know who the jury’s going to identify with. And it also means that you’re going to have to fight it for as long as the other party will. If I have a contract and the evidence shows that we did what we were supposed to, it’s not going to last that long. They’re going to hire a lawyer and we’re going to be like, all right, what can we do to get this worked out? We’ve got a strong position. We’re not trying to hammer you. We just need to be made whole. And that usually goes well.

Henry Lopez (34:10):

The court’s favor. And judges typically when it comes to these kind of things, favor what’s in the contract. Is that true?

Wesley Henderson (34:18):

Oh

Henry Lopez (34:18):

Yeah. Unless it’s an egregious default or illegal or whatever the case might be. But otherwise, that’s what the courts are trying to do is uphold the contract. Is that fair?

Wesley Henderson (34:26):

And there’s some clauses you want to put in there that are not unfair clauses that empower you to give you more leverage. There’s things called prevailing party clauses, things like that. So that basically it gives you the ability to collect more, including your attorney’s fees. We see these, we constantly see the chat GPT, and we very much embrace the ability to feed things up. But just a warning, we’ve got a client where we’re litigating a case right now because they got some clause is not the whole thing. I don’t know where they got the rest of it, but some were written by a Chad GBT thing and it protected the opposite party

Henry Lopez (35:03):

And

Wesley Henderson (35:03):

The way that he wanted to be protected. And so while this stuff, there’s a tool that we use that runs checks on things and speeds up what we do and reduces our time into it and our cause, but it is still, the hallucinations is just still a little ways away probably from being as useful as we wish it was.

Wesley Henderson (35:21):

It gets a little wordy too and just it doesn’t have that sort of dialed in pace right now, but it certainly is an interesting thing that we embrace in trying to provide more efficient services. But it is a little bit of a word of warning in terms of it’ll pull stuff from different states, countries protect the wrong side is what I see a lot of is it flips it back and forth. And if you’re looking at an indemnity clause, it took me three years of being a lawyer before I could read those properly. Those are not easy to understand. And so you’re not going to be able to read it and tell whether it’s doing right.

Henry Lopez (35:53):

No. Or try to write it. One of the ways I’m using chat g PT now is to help me interpret. I’m still going to have an attorney before I sign anything of consequence, but to interpret it and give me some guidance, what are the general provisions here? What should I be aware of? What questions would I need to discuss with my attorney? So I’m using it that way more so than to try to generate a legal agreement per se.

Wesley Henderson (36:15):

And I think it’s really useful now. It kind of picks out the sections and you just got to be a little careful. You got to make sure, but it certainly shortens these things. It

Henry Lopez (36:23):

Does, yeah.

Wesley Henderson (36:24):

It’s helpful.

Henry Lopez (36:25):

But sometimes I’ll just take a clause, a paragraph and say, what does this mean? And it does generally a good job. Again, I’m not going to take it for a hundred percent, but it gives me some clarity. Oh, I see what they’re trying to say here. Especially in the negotiation process right before I’m going to necessarily invest in a final review by my attorney as I’m reviewing or negotiating. Alright, let’s keep moving. Thank you for those insights here. We’ve been talking about it mentally, so tell me about these contracts that you offer and how you bundle those.

Wesley Henderson (36:54):

Yeah, so we’ve got ’em structured so they kind of grow with your business. They’re there forever. When I’m talking earlier about disputes being preventative, I believe in that. I believe that when you’re undergoing the effort on the front end, it prevents the problem. You have the conversation upfront and it may mean you lose a client once every once in a while and I will have just done you a huge favor in my experience if agreed, someone’s afraid of what we’re putting in front of ’em, I just saved you. A world of time is not always the case, but it’s probably close to 80, 90% of the case. So we even have a guarantee, a full refund. If you’ve got to litigate a case, you got to involve a lawyer because of a dispute, we’ll refund your money. That’s how helpful I think this process is. So we have, I think there’s nine agreements in there. They’re tailored to about 15 different industries. If your industry is not in there, we just recommend you email just to make sure it’s not in there and then we can entertain whether we would add that in there. It’s important for it to be in your industry. The exposure is very, very different. This is actually what the genesis of creating this product was is you see the legal zooms and they’re just kind of got different names, but they’re very generic

Wesley Henderson (38:07):

And these are most written from our law firm and then kind of made a little bit more open, less tailored to that one specific. So a personal trainer for example, or fitness is very different than a graphic designer or a marketing expert. The exposure is totally different. We have ’em for podcasts and consultants and it’s very different exposure. And so as a lawyer, I’m always looking at your exposure point, and so we always make sure we address those in there. So they start off with service agreements, they’ve got waivers, examples of disclaimer clauses, so you can run those through Jet GBT, but now it’s going exactly to what you want instead of accidentally having hallucination. And then we’ve got agreements in there for workers, independent contractors, employees.

Wesley Henderson (38:54):

May take you a time to get there, but as you get there, you want to have ’em and they’re all sitting in this dashboard and then sponsorship, you’re getting ads on, you got an Instagram account, that sort of thing. That’s one where you actually do want it very heavy handed in my opinion. And ours is written that way because sometimes because if you’re putting your brand exposure there based on someone else advertising with you, you need to be able to control that. If they start going against the character of your business or against your audience in a way that’s having a negative impact, I want to have you to have control over that and you can negotiate with that, but you certainly want to have content control, you want to have some more control there. So we have ’em all there for you and it grows with you. They’ve been a real hit and I think really helpful. They kind of came on organically out of our business as we’re pricing people in through our law firm. Just the amount of time it takes to meet and interact, it just doesn’t make a ton of sense for a lot of people starting out. And so we’re sensitive to that and so we pivoted here to make sure everybody’s got a good option they can rely on.

Henry Lopez (39:58):

Alright, and you’ve got a special offer for our listeners, correct?

Wesley Henderson (40:02):

Yep. We’ve got a code for you, for anyone in your audience. The code is how to you put that code in and you’ll get 15% off the legal bundle. And then I’ll also give you a 30 minute, just ask me anything, won’t be your lawyer, but if you got a question about a clause, should it be in there, should it not, I can help guide you through that thought process. Excellent. Got a question.

Henry Lopez (40:22):

I mean that alone, I mean the value here is four or $500 easily with that

Wesley Henderson (40:28):

Out of our law firm, if you’re getting a consultation to listen and talk to you, it’s at least $400. So yeah.

Henry Lopez (40:34):

What’s the website I go to for this?

Wesley Henderson (40:36):

It’s drafted legal.com and you’ll see the legal bundle up top and you can purchase it from there.

Henry Lopez (40:42):

Excellent. I’ll have that also on the show notes page of this episode in case you’re listening somewhere where you can’t write that down. And so just go to the how of business.com, find this episode, search for Wesley and I’ll have links there as well, as well as that promo code, how to take advantage of that offer. We appreciate that, Wesley. Alright, let’s wrap it up. We’ve talked about a lot of different tactical things, but if you kind of boil it up and think about a small business owner from a legal perspective, what’s one or two key things you want us to take away from this conversation?

Wesley Henderson (41:13):

I had say three big things. Get an LLC, make sure you’re building a brand that you can own and use contract. Just get comfortable with ’em. Nobody cares. They take you more seriously when you do, they’re agreed more professional. So just if you’re going to start a business, take it seriously.

Wesley Henderson (41:30):

There’s some advice I heard recently talking about doing how doing the right thing is more important than just doing things. And it really sits with me because doing the right thing goes so much farther than just being busy all the time. We’re always busy all the time doing this and almost just, oh, I got to be doing, it’s important to make sure you’re doing the right thing. And so the contracts are a real good manifestation of that, have the right type of contract. And I mean you may have saved yourself $50,000 or in my world, you’re talking about seven figures of mistakes that go on. These are big time mistakes and you’re talking about a thousand bucks on contracts or less than that for your audience.

Henry Lopez (42:08):

Yeah, the liability protection is huge, but you make a great point as well that I think sometimes we don’t stop to think about is that our clients see us more professional, they want it as well to protect them so that there’s clarity. So it goes both ways. And I just had a client recently who’s looking to sell their business and they didn’t have agreements in place for some components of their business. And the prospective buyer was, you got to get that in place first because otherwise, what am I buying? So it serves that perspective as well. Alright, tell us again where you want us to go to learn more about your practice and where I find the contracts.

Wesley Henderson (42:41):

Yeah. Drafted legal.com is where I’ll send you and you can, the top of the page, there’s a link to the legal bundle

Henry Lopez (42:48):

And if somebody wants your legal services, I’m sure from there they can link to Henderson. Henderson.

Wesley Henderson (42:52):

Yeah, you can find it if you type in my name, Wesley Henderson, law firm’s Henderson and Henderson, and you’ll be able to find it. It’s hh law sc.com.

Henry Lopez (42:59):

Wesley, thanks so much for sharing with me today, being so open to all my questions and giving us all this practical guidance, which is what we always look for on this podcast. Thanks for taking the time to be with me today,

Wesley Henderson (43:11):

Henry. Thanks for having me. I really enjoyed it.