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The Scene: A small town saloon in the wild west, in the late 1800s. A rancher and a farmer sit around a table discussing their businesses – the rancher’s herd is growing and he needs more grazing land. The farmer has been unhappy with some spots of his acreage that haven’t performed well and agrees to let the rancher’s herd graze there for a fee. The matter discussed, the partners stand, look each other in the eye and shake hands. Agreement.

Fast forward about a hundred years to the same location to now find a bar in the place of that saloon. Once again, we find a couple of potential business partners discussing matters around a table. One has a brilliant idea and a lot of enthusiasm, the other has money and connections. They get along well and each see merit in what the other can bring to the venture. The matter discussed, the partners stand and look each other in the eye. Then the investor turns, delves into a bag, and produces a small library’s worth of documents. “These are the standard forms and agreements I require when I invest. My attorney has already filled in the basic details of this deal. Have your people look over them and let’s try to get this settled as soon as possible.” The partners shake hands on leaving, but it’s not the same.

I probably didn’t really have to hark back to a simpler time to find a deal done on a handshake – to find an agreement based on honor, trust and mutual reliance between partners. One of the points of friction in many companies, large and small, is that “legal” or “accounting” are holding the deal up. Randy Komisar, in his book The Monk and the Riddle, describes how it felt to be the attorney in a side room going over papers, verifying all technicalities, while the management players were in the board room after an acquisition, shaking hands and celebrating. Many yearn for a simpler time, when deals could be done on a handshake, but the evolution of experience and a complex legal liability landscape have changed the rules of the game. That said, for the intents and purposes of many entrepreneurs and small business owners, agreements often may not need to be as long or incomprehensible as our attorneys may advise in order to be effective.

Nearly everyone who has ever needed to review a business contract has become familiar with the term “boilerplate“. It refers to language which is considered to be more or less universal in its application and non-negotiable. Although in many applications, it is universally applicable, much of the boilerplate is drafted to favor one party’s position. As I mentioned in a previous post, lawyers are paid to be pessimists, and to plan for when the deal goes bad, not if it goes bad. And where Sales and Marketing think through where they want to drive a deal, lawyers are asked to think of all the places a deal could go off into uncharted territory and provide for a safety net. That safety net takes the form of an agreement with a whole host of “What ifs,” including the ever-popular what happens in the event of an Act of God, an unforeseeable and unpreventable natural disaster? In the event that particular crisis does hit, you’ll be glad that language is there, but it does make agreements bulky, imposing and harder to understand. Luckily, it can be minimized as you develop a legal strategy for your company. I want to break this up in an effort to make my posts less long and more readable, so I’ll continue to explore this over my next post or two, which should also help me post more often.

Just a short follow up to the email post of a couple of days ago. I found a site that has a short walkthrough on setting up other email accounts to run through Google. Rather than trying to put one together myself, I thought I’d just point you to that post. It’s on a site called googletutor and can be found here. One thing that I forgot to mention that does take some getting used to is that GMail is apparently incompatible with folders. I generally like to tuck things away and have a clean inbox, but Google’s approach seems to be more “Google”-ish, letting you search through your email by keyword instead of in folders.  I guess that is a very “Google” way of thinking about email folder organization!

OK, so my last post was a little long. In the interest of mixing it up and blogging more often, I decided to post today on something a little lighter. Making your email communication more simple and effective.

Life is complex and multi-faceted. Often, so is your email situation. As an entrepreneur, you may have a number of email accounts you need to keep track of. One for your primary communication, another for correspondence from your company website or for other ventures you are involved with, one just for orders, and so forth. Many colleges are now offering lifetime email to their alumni to help them keep track of each other.

In addition, to more easily thwart spam problems that can arise, I recently followed the advice of a friend to create separate email addresses for areas where they might be posted on the internet and risk attracting the attention of spammers. I have done this with Linked In, for example, as well as a specific address for my resume. I also create separate email addresses for church and community roles. This way, if I ever get a bad spam problem on any one address, I can just create a new address to circulate to that limited group of people (minus whoever got me on the spam lists!!) and kill the old address. The problem is the time and frustration involved in checking all of the different accounts.

Google recently made my life simpler in this regard. I don’t mean to over-favor Google, and I am sure that there are other quality competitive products out there, but I have really been impressed with Google’s GMail. I have had a gmail account and address for some time. Then, I downloaded Google Talk to chat with a couple of friends that also use it. Now, I have GMail pop my email from three non-GMail accounts into my GMail interface. It is very easy to set up, all you need is the username and password from your other email accounts. With Google Talk running, I also get an instant update when I receive a new email.  I have also set it up so that it labels each email with the account it came in on (i.e. a personal account from my blog domain), and when I reply, the reply goes out from the account it was sent to, not my GMail account. It also means that all of my accounts can have access to a single address book. 

The other nice thing about using GMail this way is that you can check it anywhere you have an internet connection, even with a mobile phone. Previously, I had been using Thunderbird for my non-work emails and Outlook for work emails. I had been using a web client provided by my hosting service to check emails when I was away from the computer with my Thunderbird and Outlook clients. However, I consistently had problems with the IMAP connection with Thundebird and the web clients just weren’t as user-friendly as GMail is, especially when I had to log into and out of each one. Now, it’s all in one place and I get a notification when new email comes in. I still use Outlook for my primary work-related emails.

Anyway, just a quick tip that some of you will hopefully find useful.

In an effort to try and put up some content that might be useful to small businesses, I thought I’d write today about something close to home. Lawyers.

Are they really necessary? Do we really need them? The answer, I would say perhaps unfortunately, is yes. Lawyers help us anticipate and plan for problems in the future, and also help us sort out the messes we sometimes find ourselves mixed up with in the present. I have advised many friends and clients who found themselves on the receiving end of a legal matter without even quite being sure how they ended up there. And once someone has threatened or initiated legal action against you, justly or unjustly, you have to be prepared to take action to defend yourself, and that may end up costing you money out of pocket for attorney fees and expenses, even if you end up winning the legal battle!

What’s that, you say? I can end up being in the right and win in court and still have to end up paying some lousy lawyer out of pocket? Now I REALLY hate lawyers! And you wouldn’t be alone. Many lawyers are dissatisfied with our system of justice. For all its strength and effectiveness, it has weaknesses, and one of those weaknesses is its complexity. In order to be able to account for as many variables as possible, it has to be complex, but that also means that it requires an expert to help navigate it. And that expert, like an expert in any other field, needs to make a living. However, there are ways to manage that expense.

First, since you have to have a lawyer, get a good one, appropriate for your size and industry. Your primary counsel will likely be a transactional attorney. This attorney will help you make sure that you are organized correctly and performing all necessary corporate maintenance activities for your entity type. He or she will also help you review contracts, figure out how to hire and fire people, and act as a resource for finding specialist attorneys as necessary. If your industry relies heavily on intellectual property, you will also want to develop a strong personal repationship with an IP attorney. Both of these attorneys should know your organization and operations very well so that they can help anticipate your legal needs. A good attorney will usually be willing to invest some amount of his or her own time in getting to know your company at the outset, and your relationship will deepen over time.

Take some time and interview a number of different attorneys to make sure you find one that you feel comfortable working with, and that has the right experience for your industry. It is also important to resist the urge to automatically select the attorney with the lowest per-hour billable rate. Often, low per-hour rates translate into larger bills because of extra time spent making up for a lack of expertise, or even worse, a poorly (but inexpensively) written contract exposes your organization to considerable liability. Some attorneys are also willing to offer flat fees for some services with long-term clients, or even enter into a retainer agreement where a certain suite of services are provided, some months more, some months less, for a set monthly fee. Feel free to explore creative options with the attorneys you are interviewing and set yourself up in a position you feel comfortable with.

Second, budget for legal expenses. I know nobody likes to pay the lawyers, but as you grow, so will your need for legal services. Getting this into your budget early on will help you keep legal concerns in your strategy, and that will ultimately help you keep legal costs to a minimum in the long run. Exploring some of the alternatives I’ve described above will help to put a relatively constant face to that figure.

Third, remember that an ounce of prevention is worth a pound of cure. It gets annoying paying five hundred dollars to review a contract that may only be bringing in to your company twenty or thirty thousand dollars worth of revenue. On the other hand, that five hundred dollar review will seem like a bargain when you are facing a lawsuit or regulatory agency action whose expense may outweigh the value of the contract itself. Contract reviews are definitely an investment worth making. The good news is that there are ways to reduce this expense as well. You can do much of the legwork yourself. You know the deal you want to make better than anyone. Start with a template agreement of the type you are entering into (e.g., product sales, trademark licensing, employment, etc.). You can get such templates from your attorney, or if he or she does not have any available, on internet sites (such as www.findlaw.com). Try filling in the blanks and putting in minor modifications to describe the arrangement you want. Try not to change sections that do not seem to deal directly with the terms of the deal you are making. These are usually “lawyerly” provisions, are necessary, and are best left to be amended by the lawyer who authored them. Once you have put in the terms you want, have your attorney review it and explain any changes he or she wants to make with you. This will let the attorney shore up any problems, and will make sure you are both on the same page. You will also have saved the expense of the attorney filling in the terms of the contract on billable time.   

Finally, and this hearkens back to a comment above, keep legal in your strategy. There are many ways to do this all along your path. The cheapest way to do this in the beginning is to have a lawyer friend. I know the risks that may run to your reputation, but they are generally considered more entertaining than accountants, and there is an inexhaustible supply of jokes to be told about them behind their backs, or even to their face! I often answer basic legal questions for friends and acquaintances. Short of having a lawyer “friend”, small businesses can develop relationships with attorneys interested in their industry through participation in industry associations. Lawyers often join these associations and attend their functions in order to further their industry knowledge and to network. This networking is an opportunity to develop a relationship with them and to get general advice and answers to basic questions. If you are a startup that is short on cash but long on value, you may consider asking an attorney to join your board and/or provide legal services in exchange for a percentage of ownership in the company. And finally, once the number of legal concerns your company is addressing accumulates to the point of becoming a real distraction from running the company, it may be time to consider hiring an attorney to work in-house. If you are still small but feel like you are on the edge, try finding one that can wear a couple of hats and perform additional functions for the company, or see if you can get a practicing attorney to dedicate a certain amount of his or her time to you for a flat fee. 

Most importantly, put your innovative spirit to work in establishing your relationship with legal counsel. Lawyers stand behind us and make sure that we can at least feel like we are doing business on a handshake and a smile in the boardroom, while they are tightening everything up behind the scenes. Legal counsel is a necessary, but minimizable, expense that will put a small business ahead of those who do not pay attention to it. Following these guidelines will help to ensure that you are always using the lawyers, and not the other way around…