Skip to content

Business Law on Vsam1040 Chicago LLC

Tien Thanh:

Hi, all. How are you today?

Daliah Saper:

Good. Thanks for having us.

Tien Thanh:

Thanks. Daliah, can you introduce a bit about yourself to our viewers?

Daliah Saper:

Absolutely. I am the founder of Saper Law Offices here in Chicago. We just celebrated our 16th year in business. My firm primarily focuses on areas of law that helps small businesses. So we help small businesses, or actually businesses of any size. Sometimes our clients start small and become very big businesses. But for the most part, we help them get set up, choose the business entity that is right for them, write the contracts that protect them, and then ultimately help them protect their trademarks, their copyrights, whatever they’re creating as a business.

Tien Thanh:

All right. Thank you. [foreign language 00:01:04]. All right. Let’s dive into our Q&A session today. What type of business planning do you do for people?

Daliah Saper:

Well, first of all, the most important planning is figuring out who is going to own the business? What is the business going to be doing as a business? And who will they be helping? Who will be helping the business that’s not a partner of the business? So are you hiring contractors, employees, vendors? We try to really map out who’s going to be involved with the business.

Tien Thanh:

All right. [foreign language 00:02:07].

Michael Agruss:

So Daliah, while we’re talking about business formation, can you tell us the difference between a sole proprietorship, an LLC corporation? And what do you normally recommend when people come to you and say, “I’d like to start a business”?

Daliah Saper:

Okay. Well, the decision to become a sole practitioner versus an LLC, or a business, is really one that involves an accounting question, which one’s the best for me from a tax perspective? And which one’s the best for me from a daily management and operational perspective? You also want to think about the legal liability shield that you get if you are an actual business entity versus just having a hobby business. And let me know when to stop, so you can translate.

Tien Thanh:

Yeah. You can go ahead.

Daliah Saper:

Okay.

Michael Agruss:

Yeah. Thanh’s good at this.

Daliah Saper:

Okay. So yeah, that’s something new for me.

Tien Thanh:

Yeah.

Daliah Saper:

Well, if you are a small business and you’re just selling let’s say greeting cards. I wake up tomorrow and I make lots of pretty doodles on paper, and I sell them to family and friends, and I don’t make a lot of money, but I make some money. I would say that you don’t need to go through the hassle of creating a whole business structure. You can be a sole proprietor. You can show up at the festivals on the weekends, sell your small crafts, and just put on your Schedule C for taxes whatever you made.

Now, as soon as you bring on a partner, or your revenue start becoming serious, or you’re doing a business that could expose you to some sort of liability, maybe I’m now selling so many greeting cards using a certain type of paper that could give people paper cuts, I don’t know, but I don’t want to get sued and then have my personal assets up for grabs by the person who’s suing me. At that point, I want to create a different business that’s not me. A sole proprietor is there is no difference between you the person and you the business, so if you get into legal trouble, you will be sued and everything you own could be up for grabs, could go to the person suing you.

As soon as you create that separate entity, whether you create a barrier, you’re saying, “I’m not the one selling the cards. XYZ business is selling the cards, and I just own XYZ business.” And then you decide, am I going to have an LLC, which has certain tax implications and control implications? Am I going to be a corporation? Am I going to be a corporation that elects to be taxed as an LLC or an S corporation? So there’s some questions that you can’t necessarily answer yourself. The most important question you can answer yourself as a business owner is, do I need this extra level of protection in order to protect my personal assets, or is it such a hobby business right now and small enough that I could just go ahead and sell on the weekends on the side?

Tien Thanh:

All right. [foreign language 00:05:27]. All right.

Speaker 4:

Daliah, when a client comes to you to discuss starting a new business, what are the three most important things that you discuss with them?

Daliah Saper:

The first would be put everything in writing, as I alluded to before. A lot of small businesses start on a handshake, they start with friends and family. And so people jump into the business and they don’t know who’s doing what and who’s getting how much. So the most important thing is, I don’t care what your business is, I want to know what you’re going to each do for the business and what you expect to get out of the business. That’s number one, the contract between you and the partner, if you have one.

Then the next one would be contracts with people who are not your partners. Like I said before, if you’re hiring someone to take photos of your product, if you’re hiring someone to create your website, to make your logo, all of those things are potentially intellectual property, things that your company should own, or just you want clarity as to what you’re going to be getting when you hire someone. So contracts with yourself. Number two is contracts with the people you are going to be hiring to do work for you, that is not part of your business.

And the third thing I talk about is taking that affirmative step to protect whatever it is you’ve created. Every business, small and large, is known by their name. So if you’re not… you’re spending a lot of time developing your brand and making sure people know you are this particular… Give me a company name you like.

Tien Thanh:

Mike Agruss Law.

Daliah Saper:

Mike Agruss Law is an okay example.

Michael Agruss:

Not a good example?

Daliah Saper:

It’s good example that it’s your last name. So, that’s great. And last names are a little iffy when it comes to protecting them from a trademark standpoint. But let’s say you gave me a name that’s Flour Law Firm, a name that you want to be known by that’s not just your last name. And you spend a lot of money and time developing that name. And that happens with small businesses. Let’s say you’re my greeting card example. Let’s say I call XYZ Greeting Cards. Seems generic and simple enough. And I sell $100 million worth of greeting cards. And a year into my business, a big company comes in and says, “We just found out about you. We’re XYZ greeting cards, or we’re XYZ paper company. And your name is too confusing to ours. People think you are us.”

So all that time and money and energy you spent building up your brand might be for not because you now have to go rebrand, or stop, or worse, defend a trademark lawsuit. So it’s important to choose the name of your business carefully to make sure it’s not going to be the same as an existing business, and also to make sure that the materials you’re using to promote your firm, your business, are not going to get you into copyright trouble. So there’s trademarks which will cover your brand, and then the copyrights which are covering your website content, the photos you use, the music you might use, the picture you took from somebody else’s Instagram page and put on your own page. Those are the kinds of things that small businesses get into trouble for.

Tien Thanh:

Okay. [foreign language 00:10:15] registered agent. All right. My follow up question for you is, what is a registered agent? And do you need one to have a business?

Daliah Saper:

Okay. A registered agent is basically the point of contact between you and the city, the state, and anyone who wants to sue you. A registered agent basically is the person who people communicate with about the business. So when you create your entity, you list a registered agent, then every year you’ll get a letter from the state that says, “It’s time to give us more money,” they’ll send that to the registered agent. Any official notices will go to the registered agent. And again, if you are ever in a position where the business is getting sued, the business will be served when the registered agent receives the complaint and the summons.

A registered agent can be a business owner himself. You list your own house and mail goes to your house or your business address, or you can actually hire a third party company to be that registered agent for you. And there’s lots of companies that do that for less than 100 bucks, or 100 bucks a year. They just act as your mailbox, as the person or the company that will get that information and then pass it to you.

Tien Thanh:

Okay. [foreign language 00:13:28] registered agent. [foreign language 00:14:13] registered agent [foreign language 00:14:35]. All right.

Michael Agruss:

The next question I want to ask deals with financial issues that come along with starting a business. And I remember I started my firm in March of 2012, and for six months I had a list, probably three times as long as this, of things that I was just checking off that I was doing. And then I launched and then I realized when I got my first settlement check in, I don’t have a QuickBooks account. I had the bank account but I did not have QuickBooks account, I didn’t have other financial issues figured out like accounting, taxes, and all of that.

So when someone comes to you with a business idea and what do I do? At what stage should people start considering accounting issues, financial issues, bookkeeping, talk to someone about taxes, and things like that?

Daliah Saper:

From the very beginning. Your best friends are going to be your lawyer and your accountant, and maybe your insurance broker depending on the risk of your business and what the business is doing, right? Some businesses have higher risk, so there’s more complicated accounting, or whatever, but you should know, and part of that discussion will happen when you decide what entity type you want to be, right? I think I talked about LLC or corporation, that’s a tax question first and also a legal question. But you want to know where the numbers are, what the numbers will look like, and who’s going to be responsible for them. And more importantly, if you don’t have a good set of accounting records, when someone inevitably sues you, because you’re going to be so successful, what they’re going to do is they’re going to sue you and they’re going to sue the business.

Even though you have this, what’s called this liability shield, by having a business, if you’re not careful and keep your accounting separate and your bank accounts separate, they might pierce the corporate veil, that’s what the term might be, it is, and they’ll say, “Okay, this business owner is buying his computer with his own money and using it for the business, or actually that money he made for the business he took all of it out and the business is undercapitalized. There’s no money in the bank account for the business. Everything’s commingled. It’s not clear who is the business and who is the business owner. Let’s just sue everybody.” So it’s important to have good accounting, know what you’re paying taxes for, know what your expenses are, and keep everything super separate, so that there’s no easy chance for someone to sue you personally, even though you have a business entity.

Speaker 4:

Do you have a tax background?

Daliah Saper:

No, I don’t have a tax background.

Speaker 4:

A business background.

Daliah Saper:

No. No. And by the way, every lawyer is not going to be good for you. You might want a business lawyer who does a lot of construction law, and knows real estate law very well. You want an IP lawyer, which is what I am also, I’m like an intellectual property attorney. So I’m really good at telling you not only how to start your business, but also what… if you’re a web-based business or… you just want to find a lawyer that has and understands your industry. There’s a lot of negotiating of contracts that depend on knowledge of that particular type of contract. So it’s okay to have more than one lawyer as a business.

People think… I get calls from clients saying, “I hope you don’t mind, but I need to use this lawyer for something else.” And I say, “No. Just like you wouldn’t hire… I don’t know. A divorce lawyer won’t know how to handle your estate planning or your personal injury case.” Lawyers are specialized, we’re not allowed to say that word, lawyers focus on different practice areas. So make sure you interview your lawyer like you would anybody else who’s going to be doing work for you. Your contractor, or your… Yeah.

Tien Thanh:

All right. [foreign language 00:18:59]. All right.

Speaker 4:

A lot of this conversation brings me back to bar study. Next thing I want to discuss is members of a business. Can you tell me what people should consider when thinking about what members should be a part of their business?

Daliah Saper:

Okay. As a transactional lawyer, I help a lot of businesses set themselves up. As a litigator, I go to court when they get divorced. So we know what normal divorce sounds like, but business divorce can be even nastier than family divorces. Why? Because the business becomes these people’s babies, right? They spend so much time with the business, there’s so much emotion invested, and inevitably, when there’s a dispute, you’re fighting about the assets, you’re fighting about decision-making. So your question was, how do you decide members? How do you decide who you should partner with? Well, I’ll tell you who you shouldn’t partner with.

You probably shouldn’t partner with a close friend, unless you have very clear parameters in the agreement, the operating agreement. Let’s say it’s an LLC that says, all right, I’m going to be responsible for XYZ decisions, and you’re going to be responsible for ABC decisions. And that way we stay in our own lands, and it reduces conflict. Or, okay, we’re going to have conflict, this is how we’re going to deal with it. We call the operating agreement almost like the prenuptial agreement, because that’s where it lays out every potential problem, but not every. But what problems could arise and how you will deal with them.

The beauty of an LLC unlike a corporation is you can write your own rules. And a corporate structure has to go by the corporate laws, but an LLC gives you wide latitude to make your own decisions. I’ll give you an example. I had three clients, there were software developers, and they didn’t know how to decide on disputes. We had in their agreement that there has to be unanimous decision, as opposed to majority decision. And those are the things you’ll also decide. If it’s a two member business, well, obviously, it’s got to be unanimous. If it’s three members, it could be majority vote gets it, or unanimous vote gets it.

In their case, they wanted all three partners to agree on all major decisions. So what happens if they’re-

Speaker 4:

That sounds easy enough.

Daliah Saper:

So what did they say? Let’s say the three partners can’t decide, what would be the decision-making factor? They decided they would have a turtle race. That would be what they would do. And we wrote it in the agreement. Each person gets a turtle, they put them on the floor, whoever’s turtle wins, well, that’s the decision that they are going to go with. And I have it and it’s like in our wall, it’s one of our favorite things we’ve written. But it can be that crazy, but you need to anticipate those issues and decide, will you have a turtle race? Will you have a third party mediator? Will you just dissolve the business? And who gets the assets? That can be really messy too. You’re going to have to deal with valuations and what’s the… And then you bring in other people, how much is this interest worth?

So make sure you like the person you’re working with, you have a history with them. And even if you’ve known them for 20 years, you put in really good safeguards to make sure that when things may more likely than not go south, you have a nice exit strategy. I hope you can translate that. I don’t know.

Tien Thanh:

Yeah. I think.

Speaker 4:

I have to ask, what’s the distance for the turtle race? Are you talking like table…

Daliah Saper:

I’d have to go back and look at the exact details of it.

Tien Thanh:

What’s the optimal number of members would you recommend, or do you have any?

Daliah Saper:

I don’t think there’s an optimal number, the best successful businesses are where two people with very different skills come together. If you’ve got two sales guys, you’re going to have conflict. If you’ve got the tech person or the business… Like the widget maker and then the sales guy, those end up always working out better. Because they’re not trying to compete for the same type of business activity.

Tien Thanh:

Okay. All right. [foreign language 00:24:19]. All right. How do you help people with contracts with a third party, contractors, vendors, and employees?

Daliah Saper:

Okay. As I’ve been hopefully making very clear, contracts are important, and why? Well, some of the important parts of the contract are setting forth what you’re going to pay them and what you’re going to get. What are the services? What’s the payment? But a lot of contracts people forget, what’s the termination provision going to sound like? Let’s say you don’t like the work that this person is doing, how do you get rid of them? Is it going to be a long project? Is it a short project? What happens if one side or the other side no longer is interested in working together?

Another thing we want to talk about is this concept of indemnification. What if the contractor does something that exposes the business to a lawsuit? You want to make sure the contractor will pay you for your legal fees, your legal liability. So that’s a contract provision you want to have. You also want to decide where will you be filing the lawsuit? Maybe the contractor is based in New York, or the business you’ve hired is based in California. Do you have to go to California to sue them? Can you sue them in Illinois? So you want to have a choice of law provision in your agreements.

You also want to have a section that talks about intellectual property. If you’re not having a section in there with a contractor that says you will own the work product, the contractor will. And a lot of business owners don’t know that. If I hired Agruss… Well, let’s say Mike was an amateur photographer. Maybe he is, I don’t know. And I said, “Mike, will you come and take photos of my employees for my web page?” I hire him as a photographer to take photos for my law firm. Mike, how much do you charge?

Michael Agruss:

Headshots for?

Daliah Saper:

For four people.

Michael Agruss:

$1,000.

Daliah Saper:

Okay. So I pay Mike $1,000, he gives me the headshots. Who owns the images? Who owns the photos?

Tien Thanh:

Should be your company, right? Should be you.

Daliah Saper:

It should be, but it’s not.

Tien Thanh:

All right.

Daliah Saper:

Mike actually owns the copyright to those photos. Even though I paid him for it, even though it’s for me, nothing stops Mike from taking those images, blowing them up on a billboard, and using them as part of something else. That’s the way the law works. So if you don’t have something in the agreement that says, “Mike, I’m paying you $1,000, and by the way, these pictures are going to be copyright of Saper Law,” you won’t have the right to control the downstream usage of those images, with some exceptions. The basic answer to your question is, it’s important to have a contract to outline these important provisions.

Tien Thanh:

Okay.

Michael Agruss:

What’s interesting, let me jump in real quick. So for every single vendor you have, you’re making me like think of all the vendors I have at my firm, literally every single vendor, you should have a contract with.

Daliah Saper:

Yeah. Especially, if they’re creating something for you. Now, if you’re buying like widgets off Amazon, again, like pens and… certain things within reason. But I’d say any contractor who’s, and you do a lot of content creation, so anyone who’s creating content for you. Content can be web text, it can be photographs, it can be music, whatever. All of those people should be signing something, a simple paragraph.

Michael Agruss:

Got it.

Daliah Saper:

This work is being commissioned as a work made for hire, or if not a work made for hire, you’re assigning any rights to Agruss Law.

Speaker 4:

Mike needs to go make a few phone calls.

Daliah Saper:

Yeah. And you’d be surprised a lot of lawyers don’t do this. A lot of lawyers don’t have their own contracts in place sometimes.

Tien Thanh:

Okay. [foreign language 00:30:26].

Michael Agruss:

My name is Mike Agruss. I’m the founding attorney of Mike Agruss Law. Mike Agruss Law started in March of 2012. What I like about personal injury cases is each case is different, so it makes it challenging, it’s something new, it’s something exciting because you are investigating a whole new set of facts in each case that you work on.

What I like most about consumer rights cases is most people don’t know about the law. We didn’t learn about it much in law school. And if we’re not learning about it in law school, most people don’t know what their rights are. I enjoy explaining to a lot of people, it’s always refreshing to hear clients say, “I didn’t know I had those rights.” And most importantly, consumer rights cases that we handle, which are primarily financial issues, have what’s called a fee shift provision. So my fees are shifted to the other side. In other words, my clients don’t pay my fees and costs, the company we’re going after does. So it’s refreshing to explain someone their rights, you have options, and not only can we fix their problem, the other side has to pay our fees and costs. And the consumer rights practice is national, so I like the idea of being able to help everyone in the country.

What I like most about plaintiffs’ work is representing individuals. I tell people all the time, you’re either a plaintiff’s lawyer, or you’re not. From the moment I could walk, I knew I wanted to go to law school, and I always knew I wanted to do plaintiffs’ work. There was a period of time for about a year and a half where I did insurance defense work and it was enlightening and I learned a lot, and it makes me a better lawyer on the plaintiff’s side because I know how the other side is thinking, but I’m 100% a plaintiff’s lawyer. I like having individual clients, I like having someone to talk to, it’s refreshing to get that review from a client, it’s refreshing to be told you did a good job. And it makes me think that this was the reason I went to law school, was to help out individuals.

My favorite animal is a dog, we have one at home, but I’m a big animal lover. My son is six years old, and I just got him a fish tank for his birthday. And it’s probably as much of a gift for him as it is for me. So I like all sorts of animals, but I’d say my favorite animal is a dog.

The app I use the most is Waze. I feel like I’m thinking answering questions, analyzing things all day long, going through a million emails, phone calls. And the last thing I want to do when I get in my car is figure out where I’m going. I love being able to plug in an address and Waze tells me where to go.

My favorite food is pizza and sushi. I’m a big lover of deep dish pizza. So the original Unos and Dues in Chicago, I’ve been going to since I was in high school. And I’m also a big seafood fan. I love sushi. When I lived out in California for a couple of years, they have incredible sushi out there. I love it. I miss it.

My perfect vacation has always been relaxing on a beach. I’ve got two toddlers at home, and so that’s even more important these days. So 100% relaxing on a beach.

Weekends are for catching up on sleep, hanging out with my family, exercising, and most importantly, getting afternoon naps. I love napping, and on the weekends I certainly nap every day.

If I was not a lawyer, I don’t know what I would be. I knew I wanted to be a lawyer since I could walk. Having started my own firm, I also like the aspect of running a small business. So I would be a small business owner.

My favorite book, surprisingly I don’t read much. I would say in high school my favorite book was Catcher in the Rye. The most recent book I’ve read that I love and I just started doing audiobooks is Ryan Serhant’s book, Sell It Like Serhant. He is on Million Dollar Listing New York. I love all of the real estate shows on TV. I read his book. And whether you’re an attorney, a real estate agent, no matter what you do, if you’re a small business owner, the book’s applicable. I loved it. So currently, my favorite book would be Sell It Like Serhant.

My favorite movie when I was young was Breakfast Club. I watched it every weekend. I’ve probably watched it hundreds of times. There was a point where I knew the first half by heart. Recently I would say my favorite movie would be… I’ve got a couple of them. I really enjoy The Hangover. Anytime it’s on TV, I always watch it. I also like current war movies. 13 Hours was a great movie, and Lone Survivor was a great movie.

Working at Mike Agruss Law is fast-paced. We are high volume. It is a healthy amount of stress. Every day is new, it’s different, constantly getting phone calls and emails, talking to clients. Working at Mike Agruss Law is collaborative, it is very open door. We all talk together throughout the day, whether we’re discussing a potential case, whether we’re discussing a current case-

Daliah Saper:

Well, yeah, you’d… Sorry.

Tien Thanh:

All right. [foreign language 00:37:50]. All right.

Michael Agruss:

So Daliah, while we’re talking about business formation, what do people need to consider about transferring or selling ownership in the business as they’re forming the business?

Daliah Saper:

Well, as you’re forming the business, I wouldn’t say you have to worry so much about selling the business. I mean, the goal is to build the business. But there comes a time where either the business is no longer making money for you, or you want to retire, or you want to move to Fiji, whatever it might be, or you’re approached by somebody else to sell your business, then you think about two things. Am I selling the actual business entity, or am I selling the assets of the business? What’s the difference? Well, let’s say you have a really good lease, and it’s for five years, and your location is amazing. And the person who wants to buy your business doesn’t really care about your business, they want to be able to take over your lease. And the lease says only a subsidiary owner, or this business is the only one that can own it.

So in that case, for example, whether it’s a business license or the actual lease, the purchaser might want to buy the entire entity. All right. Let’s assume that that’s fine. Well, in that case, there’s going to be a lot more due diligence around the operations of the business. How are your employees getting paid? Are there any taxes owed? Are there any liabilities that the purchaser needs to know about?

On the other hand, a more straightforward and sometimes a little less complex scenario might be you’re closing up the shop and the only thing that’s of value really is the physical assets. The Xerox machine, I don’t know. I’m trying to think of something. The restaurant, maybe the fixtures, or in a service business, certain business lists that you’ve developed over time. Maybe your brand is really strong. They don’t really care about your business, but they want to buy your trademark. They want to buy XYZ cards, and they don’t want to operate your business, but they want to put XYZ on their line of products.

So you have to decide, am I going to enter into an asset purchase sale, asset purchase agreement, or is it going to be a total business transaction, where I sell the whole business? And then you’re going to call that accountant that you made friends with in the beginning, call that lawyer that you’ve been friends with from the beginning, and with their guidance, you will go through the due diligence checklist. You’ll make sure that you’re now not going to be liable for the actions of the purchaser.

Let’s say they’re using XYZ, your trademark, and then they get into a lawsuit. You don’t want to be sued. So you’ll have that indemnification provision that says, buyer will indemnify seller and vice versa. Those are some of the considerations. And then you also have to think about, what is my business worth? How do I value what I’m going to be selling? And then you’ll get an accountant or a third party to help you make those financial evaluation decisions. But those are some of the things that a business owner seeking to sell their business should think about.

Tien Thanh:

Okay. [foreign language 00:40:58] due diligence [foreign language 00:42:25]. All right.

Speaker 4:

What do you tell clients or people who want to do the business planning on their own, or using a service like LegalZoom?

Daliah Saper:

Okay. There’s a place for things like LegalZoom, and it’s not always bad. If you’ve got a very small business and you’re trying to save some money, and if it’s just you, it’s not the worst thing in the world to use a LegalZoom. But what happens when business owners try to make their own contracts or use these services, is inevitably, by using a robot or a form to create your business, you will run into problems later that weren’t contemplated by the first service you used online. It’s like using an accountant to prepare your taxes and understand your situation, versus using like a TurboTax, or some sort of online place. So I’d say if you’re small enough, it’s a single business, and you just need something quick and easy, go ahead and use a LegalZoom. But if you have a business partner, or you have a business that has some complicated issues, or you hope to expand or bring on other people, then it’s a lot more economical in the long-term to get it done right with the help of a professional, as opposed to try to save some bucks in the beginning and have a shaky foundation for your business going forward.

Tien Thanh:

Yeah. [foreign language 00:44:00].

Michael Agruss:

So Daliah, when business disputes do arise, do you also handle litigation?

Daliah Saper:

Yes. Lawyers are either litigators, or people who write the things and contracts. And we’re actually a law firm that does both. I actually go to court, and I actually write the contracts. And that’s helpful. Why? Because when I’m writing the contracts, I can anticipate what the judge will think about a certain section of the agreement. You should do everything possible to not go to court. And it seems good, like I’ll sue you, I’ll see you in court, or I’ll file a lawsuit. No one wins. No one wins when you file a lawsuit. And even if you win, you have to pay us lawyers so much money, that more often than not, it’s not helpful to file a lawsuit.

Having said that, sometimes lawsuits are inevitable, and you have to file a lawsuit to get your contracts paid or to protect your assets. Let’s say an employee leaves and steals your client lists. Having said that, you want to make sure that if you are filing a lawsuit, you know why you’re filing a lawsuit, you have strong paperwork that supports your case, you’ve got the right contract to rely on to make the process as painless, even though it will be painful, as painless as possible.

And in fact, sometimes in our contracts we say, if we have to file a lawsuit because you didn’t pay us or because you didn’t do something you were supposed to, then we have the right to sue you and get the fees and costs associated with suing you if we win. The United States unlike some other countries, doesn’t cover your legal fees. Other countries say, if you file a lawsuit and you win, you automatically get the costs of filing the suit. That’s not the case in the US, and so if the contract doesn’t say you’ll get your lawyer’s fees, you won’t get your lawyer’s fees most of the time.

Tien Thanh:

Okay. [foreign language 00:47:40]. All right.

Speaker 4:

Let’s discuss trademarks, copyrights, and advertising. How do you help businesses with these areas of the law?

Daliah Saper:

Okay. As we discussed earlier, the trademark protects the business brand. In order to get protection for your brand, you just need to start using your trademark. As soon as you start selling your product or your service, you have a common law trademark. However, if you don’t have a federal trademark registration, if somebody in a different part of the country or somewhere not here in Chicago wants to use the same name, you will not be able to stop them. So if I’m XYZ Greeting Cards and I sell cards in Chicago, and I have yet to sell anything outside of Chicago, and Bob in California starts a company called XYZ Greeting Cards, I can’t stop him.

However, if I go through the process of getting a federal trademark registration, and I’m successful in getting the circle R not the TM, you use the TM until you have a circle R, then I can stop him. I can send a letter that says, “I have the nationwide right to use this brand, your mark is the same as mine, or confusingly similar to mine.” Confusing means the consumer, not the business owner but the consumer, can’t readily tell if you’re the person selling XYZ or Bob is the one selling this XYZ brand. So trademark, well, is all about consumer protection, consumer confusion. So you get the nationwide trademark to protect your business, but really to indirectly or directly protect the buyers of your business and services.

So number one, we help clients assess what is a strong trademark, what will be the best way to get that mark registered. And then after that, enforcing the trademark, making sure that somebody doesn’t use your brand and dilute the value of your brand. So those are the things we do with trademarks.

With copyrights we consult clients and what might be protectable copyrightable business assets. That could be photos, could be website content, it could be videos, it could be marketing copy, it could be business processes, if you have written a plan, it could be the arrangement of factual information like menus or the way you present information. And then also a lot of clearance work. Let’s say you want to use somebody else’s copyright in your materials, we negotiate and draft licensing agreements. I hope that wasn’t too much.

Tien Thanh:

Right. And so what about the advertising? [crosstalk 00:51:08]-

Daliah Saper:

And then advertising there’s all sorts of new, not so new laws, but there’s laws that say, you can’t hire a friend to talk about your product, or incentivize people. Like, I’ll give you 100 bucks if you go on your Instagram and say, “XYZ Greeting Cards are the best. I bought a million of them.” You need to have that affiliate marketer, that friend, disclose in their post any material connection they might have with you. They have to say, “I got paid $100, but even though I got paid, I still think these cards are great.” So it’s all these FTC disclosure guidelines that govern bloggers and influencers. They can’t just get paid lots of money and promote a brand, and not let the consumer know that they were incentivized to make those kinds of comments about, or endorsements about your services or your products.

Other things you want to worry about are contests and sweepstakes and the way you run promotions online on various social media platforms. What else? We also counsel clients on negative reviews. Everything that happens on Google Reviews, or Yelp, or pick your website of choice, we counsel them on how to respond to negative reviews and when it makes sense to actually file a lawsuit over a defamatory review.

Tien Thanh:

Okay. [foreign language 00:52:34]. All right. We’re approaching the end of the show, and I’m sure that a lot of viewers are interested in knowing the fees, cost structure when hiring someone like you to advise them on business planning starting out their own company.

Daliah Saper:

Sure. So how much does a lawyer cost? Depends what law firm you go to.

Tien Thanh:

Sure.

Daliah Saper:

Like everything else, you can go to a very, very big law firm and they’re going to have lots of different lawyer rates by the hour. You can get some of the costs, $1,000 an hour, or someone that’s a lot more reasonable. You can go to a smaller firm and they might have more reasonable rates, because they’re not paying for the overhead of a bigger firm. So you should interview lots of lawyers to see who you like, first and foremost. Because all these, like lawyers like me, we’re going to have a range that’s all within $100. So it’s very important to not only shop for a lawyer based on how much you can afford, but also on a lawyer who understands your industry and who you want to work with.

My law firm charges $3, not $3, $350 an hour for hourly work, but we do a lot of things on a flat fee basis. What is a flat fee basis? So for trademark, we just tell you $1,000 for a search report, or $500 for the actual preparation of the filing. All of those fees will be outlined in an engagement letter, so just like I talk about the importance of contracts, the first contract you sign is with your lawyer, because your lawyer will say how much their fees will be and what your obligations are. In that engagement letter should be very transparent, clear, statement of how much you will have to pay them. Some lawyers ask for retainer, which means that they’ll ask for money upfront and bill against it. Others might just say, “This is the fee for this service. Give us that fee.” So it’s a big range, just depends. I would say make sure you really interview the lawyer and ask those questions before you make that hiring decision.

Tien Thanh:

Okay. [foreign language 00:56:53] Mike Agruss Law [foreign language 00:58:19]. Thanks all for joining our show today.

Michael Agruss:

Thank you.

Daliah Saper:

Thank you.

Speaker 4:

Thank you.

Submitted Comments

John
2 years ago
I have a business law matter I need assistance with, Kindly confirm if you are available to handle such matters. Thank you, John
Michael Agruss
2 years ago
Hi John, I would need to speak with you to get some more details about your business law matter to determine if my office is capable of handling your situation. Give me a call at my office at 888 572 0176 and we can discuss this further. Thanks, Mike