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This business coaching lesson helps business owners avoid a lawsuit.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: If you operate a business long enough, you will get sued. Most small business owners don't even look for an attorney until they are being sued. (Bad idea)
  • Disadvantages Of Larger Firms: 1. Bigger overhead, more costs.
  • Disadvantages Of Larger Firms: 2. Often more formality in communication.

lynda.com of legal, time management tips

[MUSIC PLAYING]

-My name is Caleb Taylor, and today I'm going to be sitting down with Clay Clark, the very pale, very wise CEO of Thrive15.com, the online platform that provides training on time management tips, sales, marketing and more. And he's going to be explaining to us why it's important to get an attorney before you're being sued.

As you might have heard us say before, we believe that knowledge without application is completely meaningless. So please listen to us.

You must apply what you hear today in these episodes to your business and your personal life. If you don't, today could be more meaningless-- not the whole day-- maybe just the episode could be more meaningless than a tanning bed for a vampire. Don't even try.

Clay?

-Yeah?

-You know, I love sitting in these green chairs next to you. But if the viewers haven't gone and seen the teaching that Dr. Zelner's done, I wish we had thrones like that, man.

-Well, in the Jedi culture--

CALEB TAYLOR: Yeah.

-They would have a throne like that.

CALEB TAYLOR: Really?

-Yeah. They would just have the light sabers and they would-- voom, voom. And that's the kind of things a Jedi would have.

-Good! Well, I want to jump into this topic with you.

CLAY CLARK: Yeah.

-And pick your brain. I know you talk about Clifton being your Yoda. And I like to think of you as mine, OK? A pale, taller version, but still a Yoda.

And we want to hear and pick your brain about this topic of finding an attorney before you get sued. I know I heard you talking with Dr. Zoellner-- Dr. Z-- when you were in the thrones. And you guys were joking back and forth about how it's humorous almost.

-[LAUGHING]

-'Cause you're sued all the time as an entrepreneur, are you not?

-All the time.

-All the time?

-All the time. If you own a business and you continue operating it--

CLAY CLARK: Like, successfully.

-Successfully, you're going to get sued. Because here's the thing. There's a group of people on the planet-- and I don't want to get too off track here--but there's a group of people on the planet who are leeches.

CLAY CLARK: Hmm.

-They are parasites. They are carp. They are the person who-- remember in high school when you had to do a group project and they're the one who didn't do anything and you had to do it? Maybe you're the person who didn't do the job and then you were the leech.

-Yeah.

-I know I've been a leech on a couple projects. But there's people that that's all they do.

They are ambulance chasers. They're looking to sue you. They're looking for ways to get money without working. You're going to have people that are going to sue you to try to take what's yours all the time.

-So the key is to be prepared.

-Be prepared.

-I know you've always said-- I've heard you say it-- if you're being sued, then it's too late.

CLAY CLARK: Yes.

-You don't want to wait til that point. So you're suggesting we get an attorney before we're getting sued.

-Yeah. Most small business owners won't even look for an attorney until they get sued.

CALEB TAYLOR: Hmm.

-They'll just wait until something bad happens.

CALEB TAYLOR: Right.

-And they'll be like, I don't know what happened. I don't know what happened! I was in business and then I got sued.

And it was like, I don't know what happened. I don't know. I don't know. I don't know what had happened. I don't know what had happened.

-You don't know what had happened.

CLAY CLARK: [LAUGHS] I hear it all the time though!

-You don't even know what had happened.

-I hear it all the time! I talk to people who are 30, 40, 50-- I just don't know.

CALEB TAYLOR: They don't know.

-I don't know what had happened.

CALEB TAYLOR: What had happened. So you've got to know what had happened. You gotta prepare for what might happen, right?

-Yeah. You always say what had happened.

-[LAUGHS] So you're going to get sued. Just find an attorney.

CLAY CLARK: You're gonna get sued! Smile about it! Smile! You're gonna sued for a while, OK?

-OK, so if I'm going to get sued, then I'm going to get an attorney. Clay, how do I do that?

CLAY CLARK: Sued, you will be. You will be sued.

-[LAUGHS] How do I do that? Practically, what do I need to do here?

-You need to go out there and find an attorney right now.

-A big firm or a small firm? What do we need?

-Well, this is where we get into some debates here.

CALEB TAYLOR: OK.

-Or debates. And I'm going to go over this with you, because this is really a critical issue that we discuss this.

CALEB TAYLOR: OK.

-Because this is an issue where a lot of people, myself included, have made some stupid decisions. And if we don't hear this with clarity, we're going to make some stupid decisions with finding our attorney.

CALEB TAYLOR: Well, I just want to pause real quick and emphasize again, that's the beauty of what we're doing here at Thrive. Again, you're not learning from somebody who studied theory. You're learning from somebody who's lived it out.

And so you said you've fallen in certain areas, you've made mistakes, you've learned from them. And now he's bringing it to you. So listen closely 'cause I mean, he lived it.

-So here we go. If you go with a larger firm, they have big overhead. They charge you $200 an hour. They charge you $400 an hour. They have more costs.

CALEB TAYLOR: OK.

-'Cause you walk in their lobby and it's legit.

CALEB TAYLOR: Right.

-Nice chairs, nice furniture, nice reputation, nice website, nice team, nice track record. Nice, nice.

-So the bigger overhead, the more cost. This is a disadvantage of a larger firm.

-Yeah.

-OK. What's another one?

-The second is that they often have more formality in the way they communicate.

CALEB TAYLOR: OK.

-No casual. No like, I'll call you around 2:00 tomorrow. I'll call you around tomorrow. Let's maybe connect.

CALEB TAYLOR: Is that a disadvantage or an advantage?

-It's a disadvantage.

CALEB TAYLOR: Hmm.

-Because you find out that these big companies, they want to be like, well, I can meet you at two o'clock on Tuesday.

CALEB TAYLOR: Right.

-These big firms. And at first, you say man, that's kind of tough. I have an emergency right now.

CALEB TAYLOR: Right.

-Well, you'll find that the bigger companies generally are more proactive.

CALEB TAYLOR: Sure.

-They have a set schedule. So at first, it might feel like they don't care about you. But they have a set

system.

Are you looking for time management tips?

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Advantages Of Larger Firms: 1. Usually have all the legal skills you need "under one roof".
  • Advantages Of Larger Firms: 2. You're buying clout. Getting a nasty letter from a "big time" law firm is a lot more intimidating than a nasty letter from a solo practitioner.
  • Advantages Of Larger Firms: 3. Intangible benefits: Connections, introductions & references.
  • Advantages Of Larger Firms: 4. Less risk that they won't deliver.
  • Disadvantages Of Smaller Firms: 1. Must refer you to specialist
  • Disadvantage Of Smaller Firms: 2. Less clout
  • Disadvantage Of Smaller Firms: 3. Very little intangible benefits: Connections, introductions and references.
  • Disadvantage Of Smaller Firms: 4. Bigger risk that they won't deliver.
  • Advantages Of Smaller Firms: 1. Less overhead = less expensive
  • Advantages Of Smaller Firms: 2. Often more personable and less formal.
  • Lesson Nugget: If your sales are less than a million dollars annually, start with a small firm to avoid spending all your cash on legal fees.

-So what are the advantages then of going with a larger firm?

-Well the advantages they have are overwhelming and I'm going to give these to you, OK?

-OK. Talk to me.

-Is one, they have all the legal skills under one roof. A lot of times, if you talk to an attorney, he can't do a patent law. Or if you're getting sued, he can't handle that. Or if you're dealing with workman's comp, he can't handle that.

-They'll have different areas of specialties than smaller ones.

-Within one roof.

-Cool.

-Where if you're with a smaller company, they have to delegate to all different people.

-Right.

-The second is you're buying clout.

-Hmm.

-If you get a letter from an attorney that the other attorney knows-- if you send a letter to this guy over here, and his attorney gets the letter and goes, oh man, you're getting sued from this firm. You're done.

-He's scared.

-The clout factor. It's when you're getting sued, when you're getting a letter from a big time firm, it means a lot.

-Yeah, it makes a difference.

-OK. When you're getting sued by an attorney or a law firm with firms in 30 different states--

-Yeah.

-You start to feel like hell fire is descending upon you.

-Right.

-OK. The third thing is intangible benefits. You have these connections, introductions. How cool is it when your attorney is the same attorney who works with some mega client that you want to get. You share the same attorney. What if you can get introduced to a big venture capital fund by your attorney? What if your attorney is connected to a megawatt celebrity and can make that introduction.

-Those are huge benefits.

-What if you can get a letter of recommendation written by a huge firm saying, such and such does a great job. That's awesome stuff.

-Yeah.

-And there's a little less risk that they won't deliver.

-Because they've proven it.

-Yeah, consistently. That's why they charge big fees.

-That make sense. All right so what are some disadvantages now, if we move into the smaller firms?

-If you go in with a small firm, you're going to always get referred to specialists. So you're always going to be having three or four different attorneys you're working with.

-Hmm.

-One guy for your litigation for your business, one guy for one for your home, one guy for your patents, one guy for you're--

-Right.

-It's just different attorneys everywhere.

-OK. So there's nothing cohesive about that whole process. OK, is that the only one there?

-You get less clout.

-Sure.

-Sometimes if you get a letter that's like a hand written in crayon. It says, (IN CHILDLIKE VOICE) you're being sued by Barry. Barry. Barry is suing you.

And you're like, come on, Barry is suing us? I'm not even scared.

(IN CHILDLIKE VOICE) Be very scared. I'm suing you.

It's hard sometimes to take it seriously--

-Yeah.

-When (IN CHILDLIKE VOICE) Barry's law firm is suing you.

-I mean, handwritten notes are great in certain moments, probably not that on.

-No, and a lot of times I'm joking. But a lot of the times, small law firms will do crazy things.

-Really?

-Their letterhead looks crappy, their letters look crappy. Everything about them just looks (IN CHILDLIKE VOICE) very, very weak.

-It is not intimidating at all.

-No.

-Yeah. And it also probably doesn't give you much security.

-No, it doesn't make you feel very good.

-No. OK.

-Also they have very little intangible benefits a lot of times. They don't know anybody, there's no connections--

-Sure.

-There's no one. I'm telling you, I have worked with a mega attorney who's introduced me to at least a dozen big time connections that have blessed me financially. Where he's like, hey why don't we go out to lunch tomorrow with this person?

-Hmm.

-You know who this person? Yeah, he's one of our clients.

-That's huge.

-Boom.

-That's huge.

-And the other thing is that there's a bigger risk they won't deliver.

-Right.

-I mean, what if they go out of business, they disappear.

-Yeah.

-So if had to vote right now, and I was totally just out of cash, and I was going, gosh I'm starting a business. I don't even have a lot of capital. If it's a small start up company, I would recommend you use a small firm.

-OK.

-Now if you're a mid-level-- mid being about a million dollars a year of revenue or more--

-OK.

-I would go with a big firm and not use them unless you absolutely need to use them.

-Use them sparingly, sure.

-But when you do, bring out the hammer.

-OK.

-You want to enforce a non-compete? Bring out the hammer. You want to file a lawsuit? Bring out the hammer.

-Good.

-You want to win sometime? Bring out the hammer.

-OK so we--

-Or the light saber.

-What are some of the advantages then with the smaller ones, the smaller firms.

-The smaller firms, the biggest advantage you're going to have is there's less overhead and they're less expensive.

-Hmm. OK.

-They have less costs, therefor they charge you less.

-That makes sense.

-And they're often more personable and less formal. They'll be like-- you call your attorney. Big firm, you get the secretary who will tell you, well, Mr. Smith would like to talk to you on Tuesday at 4:00.

-Right. And they can't engage--

-You call a smaller firm, what up dog?

-Yeah.

-And they're like, attorney, sir? Yeah, yeah. Barry and I-- we're hanging out, we're golfing.

-Right.

-Awesome. So you and Barry are golfing? Yeah. We'll just meet you in just five minutes, bro. So it's like, wow, you and Barry are reachable. So I don't want to give the bad impression to the small firms--

-Well you suggested, if you've got a smaller company, they're the right ones to use probably.

-A million or less, I would recommend you start there.

-Good.

-Because you can't get off the ground if you spend all your cash on legal fees.

-Right. Those are the practical steps for you, and he's given you a number even to base it off of. You got to have somebody to help, you gotta do before you're getting sued. So if you're under a million dollars per year, be sure to go with a smaller firm.

-But if a guy named sounded like that, I would probably use the small firm regardless, if I could talk to a person like that.

-Oh I mean, I think the tone of his voice is strange. The fact that he's drawing with crayons. I think that should have been an action step, honestly. If it gets to the point where your attorney is writing in crayons, just to stop.

-Just cut it off.

Featured Coaching Excerpt - Notes & Transcript, Part 3
  • 3 Questions To Ask The Attorney: 1. How long have you been practicing law? 2. Give me five references 3. Final cost to represent you in the given area
  • Executive Compensation: The team here at Thrive15 is collection of honey badgers and grinders, thus this was literally recorded up until 4 a.m. We now realize that this is a bad long-term strategy and apologize for the end of this specific training.
  • Lesson Nugget: Be sure to find out specifically how much the firm's fees are and what your total cost will be. If left unspecified, your bill may be ridiculously higher than you expected.

-And so how do we go about finding these attorneys?

-Rule three.

-OK.

-Rule of three. You're going to hear me say it lot on these Thrive episodes.

-Yeah. You live by it.

-You need to start out with three options for everything. So you need to go ahead and call three attorneys. You can find three in the phone book--

-But I just need one.

-Did I say phone book? Do we even have phone books? What's a phone book? You can get it out of a tablet. No, here's a thing-- like a stone tablet.

-Yeah, no a--

-Or an iPad. You can get it from a stone tablet. But the point is you get it from the internet-- just look for some attorneys in your area-- or better yet, call somebody who you know is successful.

-Good.

-And ask them, hey who are three attorneys that you would recommend for us?

-That makes sense.

-You know?

-And how do you decide who then, I guess?

-Well you always ask them the three questions.

-OK.

-Always ask the attorneys three questions. One, how long have you been practicing law?

-How long you've been practicing law.

-How long--

-Have you--

-Been practicing--

-Law.

-That's awesome. We're like Run DMC.

-That was great. We finished each other's--

-That was awesome. OK. So the second thing that you want to do, is we want to go ahead and we want to get five references.

-OK. Five. I already told you.

-No, no, this is good man. We've got to get five references. I got it.

-I need to stop for a second.

-OK.

-Cool.

-Now the second thing you want to do you, is you want to get at least five references.

-OK. Actual numbers and names?

-You've got to call these people and say, are you happy with the service that this person's provided? And the final thing-- I'm talking about if this doesn't happen, you have to go into full like-- you know when Anakin turned to the dark side?

-Yeah.

-And he just got a little crazy--

-Of course.

-And he goes to the Jedi temple.

-Yeah.

-I think. And he gets little crazy, bad things happened--

-Yeah.

-That's how crazy you need to get in your mind. Not physically, but you want to get that light saber out--

-Get it out.

-You want to get really crazy. You want to find out what are the final fees?

-OK.

-What are the final fees going to be?

-And so, [LAUGHTER] when you're getting the fees-- when you're getting these fees, man.

-And the file thing is you want to get the final cost of what it's actually going to cost for them to represent you.

-OK.

-In that given area. Because attorneys are notorious-- and if you're watching this right now, I will be happy to-- Here's a commitment I'll make. I'll be happy to have the Thrive team occasionally email this out to some people like you if you want to see these bills. We'll just kind of black out some stuff. They literally will charge you $250 for 10 minutes on the phone.

-Yeah. If you're not careful, if you don't have that clearly defined from the beginning--

-I've saved some of these things so that I can remind myself about crazy it is when someone does that because you just want to get a little--

-Yeah.

-Intense with them.

-Right.

-So I'm telling you, you've got to get the final bill otherwise you're going to get a massive bill and you're not going to be happy about it.

-So you're saying that I have to have a clearly defined. I mean, you have to have them say, this is the number, right? This is the real number. [LAUGHTER]

-And you have to be very serious with these people though. Because if you don't, what's going to happen is-- and I saw this happen over and over in my business-- I call the attorney. He says, oh call me anytime, bro. I'm here to help you.

-Well that's wonderful.

-Small firm. Every time I talked to him, he was billing me $250.

-And he didn't even tell you?

-Hourly charge. And he rounded up a seven minute call to an hour over and over. You want to start to see me get upset?

-Yeah.

-That's when I get that light saber out and I want to get a little crazy with my attorney.

-So you're saying that you actually have to get a real number from him. A real number?

-A real number and a firm number.

-Not just an estimate. [LAUGHTER]

-So you've got to get that real number. I mean, you've got to get a hard number from him that he can't back out of and trick you into paying some ridiculous fees.

-You have do this, otherwise your business is headed for financial peril. You're going to find yourself getting all these bills you can't afford to keep up with. And it's going to frustrate you, and it's going to financially just deplete you, and it's going to put you in a bad situation. And we have to find this law firm before we get sued. This is the point.

-Right.

-To find a good one before we get sued. And you can find if they're not a good one in advance if they won't answer that call.

-And if you're getting billed that much per call, that's going to raise the temper. That's going to frustrate you. I can't even imagine-- I can't even imagine what that would be like. Getting paid that much money. $250? Per phone call? That's ridiculous, man. That's crazy.

-All right, that makes sense, Clay. I understand now the importance of getting that lawyer before you're sued. And you pay, for Thrive, for those practical action steps. We've given them to you. We've even told you that if your business is under a million dollars right now, go with a smaller firm. There's benefits and there's disadvantages to both. But when you do get to a certain point, invest in a larger firm because this is definitely worth the money. Right?

-Absolutely. You want to invest in a quality lawyer before you get sued.

-Boom. Thank you, Clay. I always appreciate your time, I really do. I love that you've been through this before and you know what you're talking about.

-I also appreciate you.

-This guy. So kind.

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