Navigating the complex legal issues that agencies face with Sharon Toerek

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build a Better Agency Podcast, presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody, Drew McLellan here from Agency Management Institute. Welcome to another episode of Build a Better Agency. Super grateful that you are here with us. I know the world out there is a little crazy, and so hopefully we can offer you some respite and some things to think about outside of the chaos that everybody is sort of managing right now.

Couple things I want to put on your radar screen before I tell you about our guest and we dig into the conversation. The first one is probably a lot of you are already aware of this, but just in case you haven’t heard, we did have to move the Build a Better Agency summit. It was supposed to be in mid May, and as you might imagine with everything that’s happening in the US, that’s not possible right now. So we’ve moved it to November 11th and 12th with the AMI family day on the 10th of November. It’s going to be a great time to be in Chicago. It’ll be all decked out for the holidays. We are still at the Westin, which is right on Mag Mile, so lots of great holiday shopping opportunities for you if you want to stick around for a day or come in a little early.

So I think it’s going to be great. I know it was not our original plan, but now what it will be is not only is it going to be an opportunity to learn, and connect, and network, but it is also going to be a huge party. A party of celebration that we survived the virus and all of the things that it did to our agency and our clients, and that we are coming together to plan for an amazing 2021 and to be grateful for the fact that we survived all of this, that we get to actually come together as a group and be in the same room with each other. So it’s going to be a celebration and a party, and I sure hope you can join us.

I know this may not be the time for you to buy a ticket, but for some of you if it is a good time, obviously tickets are on sale and you can go to agencymanagementinstitute.com and right in the upper nav you’ll see BABA. Click on that and you’ll learn more about who’s speaking, and who’s sponsoring and all the great things, and you can also register for yourself and maybe some folks at your team. We have about 100 tickets left. So if now is not the time, don’t panic, we probably will still have room for you in a few months, but if you do have the funds available right now and you want to grab your seat, we would love for you to do that, okay?

Couple other quick things. Reminder that we have a Facebook group for podcast listeners. So all you have to do is go to Facebook, search Build a Better Agency Summit in the groups category and you will be taken to the group. We ask three simple questions. One of them is, are you an agency owner or leader? And you put in the URL of your agency. The second one is, what do you want to talk about, what do you want to learn about inside the group? And the third one is, will you be nice to everybody? If you don’t answer the three questions I cannot let you in. So please, be sure you answer the questions. You don’t have to write a paragraph, a single sentence for each question is plenty, but I would love to have you join us. I’m happy to answer your questions there and expound on any of the podcast interviews that you hear or my solocast, so don’t be shy. Head over to Facebook and come join us. We’ve just started it, so there’s not a lot of people in there yet. So you have plenty of access right now, and I hope that you will help us create a community in there that helps and supports each other, so head over there.

All right, let me tell you a little bit about our guest. So Sharon Toerek is an attorney who specializes in working with agencies of all kinds. She’s been doing this for I think 15 years or so, so quite a while. I will tell you that Sharon is no stranger. If you are a part of AMI you have probably heard Sharon speak before, she’s been on the podcast. Many of you are her clients, and I am one of her clients. Now, I’ll tell you that she has literally saved me, literally, hundreds of thousands of dollars in the last six months. Two different incidents that came up where she was able to help me.

So, in one, somebody else in the agency consulting space was about to launch an arm of their business called The Agency Institute, and I happened to catch wind of it and I reached out to Sharon, and she helped me craft a note to that person asking them to not do that because we own the federal trademark for Agency Management Institute and obviously that would be confusing to folks. This person was very gracious and very quickly agreed that they would find a different name for a new avenue, a new event that they were putting together, and so it all worked out great. But if I hadn’t had her, and more importantly, if she hadn’t helped me get the federal trademark many years ago, that could’ve played out very differently and we could’ve ended up in court and all kinds of yucky stuff.

Then the second way she came to the rescue and was my hero was with moving the summit. So as you might imagine, hotels are hurting right now and they don’t want to let people out of their contracts, or at the very least they want you to pay the cancellation penalty or the penalty to move your event, and that would’ve been a six figure expense on my part, which as you might imagine would’ve really devastated my business and my family. Sharon came to the rescue, and again, helped with the negotiation with the hotel and it all worked out great and they ended up being very accommodating once we all sat at the table. I made it clear that I was going to rely on Sharon’s expertise to help me get out of having to pay a ridiculous amount of money when all I wanted to do was move the event, and obviously it wasn’t because I just wanted to move it but it was because I had to move it.

So, Sharon is a good friend of mine. She’s obviously my own attorney, but what she is most of all, she’s an advocate for agencies. She has a passion for agency and agency owners. What I love about her is she doesn’t talk like a lawyer. She doesn’t prescribe like a lawyer, she’ll say, “Well, legally here’s what you should do. Now, I know what you want to do is over here on the other end of the spectrum, so let’s talk about where in the middle it makes sense for you to land and what risk you’re willing to take.” So she is very pragmatic with her advice and her counsel to agencies, and many, many agencies rely on her on a regular basis.

So, Sharon recently, and Sharon and her law firm, recently launched a research project, and what I asked her to do today is to share with us what she learned from that research project. So let’s not dilly or dally, let’s get right to it and welcome Sharon to the show. All right, Sharon, welcome back to the podcast. So glad to have you back.

Sharon Toerek:

It’s so good to be back with you. Thanks for having me.

Drew McLellan:

Of course. Hey, so what I want to talk about today a little bit is the research that you did. So you partnered with Audience Audit. So, as many of our listeners know, with our good friend Susan Baier, who is my partner, my research partner in the Agency Edge Series. So you partnered with Susan to do some research. What prompted that plan?

Sharon Toerek:

You know, I have to give the credit to Susan. Susan and I actually were introduced through you, Drew, as you know. We started talking about six months ago and she said, “You know, you ought to really talk to agency owners about the issues that they’re really facing and their businesses from a legal perspective, and the best way for you to do that is to go to market with a survey.” She said, “And we can work on it … we can design it together and it can give you all sorts of insights.” And her suggestion happened to come at a time when we were already starting to think about product development and ways in which we could help our community in other aspects of their business, and so the timing was just perfect between her suggestion and what we were thinking of doing in terms of reaching out to the agency owner community. So, that’s how it all kind of got started.

Drew McLellan:

Well, and I think it also dovetails nicely. I know you prescribed to the sales methodology that I am always touting and that Stephen Woessner and I wrote a book about, in terms of really having a subject matter expertise and selling from that subject matter expertise. Yours is around being an attorney that specializes in working with agencies and other creative service firms. So it makes sense that you would look at this research as not only insight for you, but I’m guessing it’s now also giving you a ton of little chunks of content that you can share out with your audience to make them smarter and better at what they do.

Sharon Toerek:

It absolutely is, and I have to say that this is part of a journey that I’ve been on as the owner of a law firm who wants to create new and different ways to help my client community, which is I’m lucky to say in a vertical that is fun to serve and has a lot of interesting legal issues to deal with. As a result of influencers like you and like Stephen Woessner, and teeing up this whole idea of having a content based strategy with a home base, if you will, sort of a cornerstone that you call it and cobblestones. Understanding what agency owners really think about, worry about, what they lose sleep from, where they need help from a legal perspective is the best way for us to develop our content to serve them, is the best way for us to figure out what sorts of services they’re more likely to need. It puts us in a better position to be counselors to them, so that we can help them close gaps before the gaps are noticeable in their businesses.

The rewards just go on and on, and we’re lucky to be able to do it a little bit more easily than maybe some of our peers because we do serve a narrower community in a more deep fashion rather than taking a broad approach to the kind of clients we work with.

Drew McLellan:

Yeah, without a doubt, I think the more narrow your scope, the easier it is to create content that’s really meaty, and relevant, and unique enough that people go, “Oh, I’ve never read that before, or I’ve not thought about it that way before.” It’s easier to do that when you have a narrow audience, which you do, absolutely.

Sharon Toerek:

Yeah, it is, and it’s also more enjoyable. You’re more inspired because you’re spending more time in the space first of all. Second of all, you’re talking to more people in that community and you start to see patterns.

Drew McLellan:

Right.

Sharon Toerek:

You start to see a number of them. For the purpose of the agency owners that might be listening to this, if you spend time where your clients are spending time, and you have a lot of clients in one group, whether it’s an industry or a community, you start to see patterns in the things that they talk about, and that makes your work more enjoyable too because you can connect the services you provide to the patterns you’re seeing in their businesses. So that makes the content flow a lot more easily as well.

Drew McLellan:

Absolutely. So, you guys went out into the field, you did the research, and I know one of the things that came out of the research were some of the top or most prevalent legal questions or worries that independent agencies were wrestling with. What are some of those?

Sharon Toerek:

Yeah. We talked to 224 agency leaders, most of them are owners of their agencies, and most of them own agencies that average between 10 and 25 employees, full-time employees. There were some larger than that, there were some smaller than that. Not many smaller, there were a number of larger ones, but top three legal issues that they have on a recurring basis and that they are always concerned about, client contract, negotiation, whether it’s developing the right master service agreement that they go to market with, whether it is negotiating off the client’s agreement. Working with freelancers was probably tied one and two versus master service agreement in terms of their priority level, how do they put together the right agreements to make sure that they’re safe and they’re protected in terms of working with freelance and get talent. Then third was copyright and trademark issues, making sure they understand how to help a client protect a trademark before a campaign, a branding campaign gets launched. Making sure that they understand how to properly use copy, images, graphics, making sure they own what they need to own before they go to market with a campaign. Those are the top three.

Then one we’re seeing increased concern about is of course privacy regulations, and that wasn’t a surprise to me because I know from talking with agency owners just anecdotally over the last 18 months that they’re getting more and more concerned about it. So, those are really the top most frequently mentioned issues. I was pleased to find out that that’s sort of equated with the experience we were already having at the firm. So it’s nice to get some scientific validation of something that you’re already feeling in your gut.

Drew McLellan:

Right. One of the ones I’m surprised, and I’m sure it showed up further down on the list, but I’m kind of surprised it wasn’t one of the top three given what’s going on in the marketplace right now is dealing with influencers, because I know that that’s a hot mess for a lot of agencies.

Sharon Toerek:

I know. I know, I was surprised too, Drew. I really thought that that would emerge up higher. My theory about that is that it’s a question of not knowing what you don’t know.

Drew McLellan:

Right. You haven’t been burned yet.

Sharon Toerek:

Yeah. It’s emerging. I did notice the audience audit team sort of segmented, and I think this was Susan’s captioning because she’s so great at this, segmented the respondents into basically three categories. The proactive and protected, the exposed and anxious, and then my personal favorite, the lawyer avoiders, lawyer avoiders.

Drew McLellan:

Yeah.

Sharon Toerek:

Amongst the exposed and anxious, influencer marketing did rate a little bit higher.

Drew McLellan:

Sure.

Sharon Toerek:

So it shows to me that they are a little bit more in tune with the fact that they need to know some stuff about what they don’t know. I think the lawyer avoiders just either it’s not on their radar or something they need to worry about, or they don’t work in that space as much as some of the other agency peers who answered the survey.

Drew McLellan:

Well, and the other thing, as I was listening to you list the top three, the good news of all of those is that the master service agreement is a once you have a good one, and by the way, that does not mean downloading one off the internet, once your attorney helps you craft one that is right for your agency, then yes, you have to modify it now and then, but it’s sort of a one and done big task. The whole idea of the trademarks and all of that, again, once you’ve gone through that process once or twice, then you sort of know what to expect and it’s not particularly onerous or scary.

Refresh my memory, what was the third one? Oh, freelancers. Again, once you have a great contract and you sort of know what the boundaries should be. So the good news for agencies I would hope in that is I’m sure, I suppose a lot of people think of, not you in particular, but people in your profession, sort of like a doctor, like I’d really rather not see or talk to them all that often because it’s going to hurt, it’s going to pinch. But as I said in my intro, you have literally in the last three months saved me hundreds of thousands of dollars because you were there to help me with some legal issues. So I guess I fall into the protected and confident category because-

Sharon Toerek:

Yeah.

Drew McLellan:

… I have a good attorney, which happens to be you, that I count on and who set me up to be successful. So I guess the good news about the worries are if people, if agency owners want to move out of the anxious and afraid category, or whatever you call them, it’s not that hard to do, right? It’s easy to move into the protected once you make the move and create a relationship with an attorney that you trust.

Sharon Toerek:

Yeah. Thank you for that, first of all, but I think what is most validating for me as a result of having gone to market with this research is that what we’ve always known in working with our agency client base is that the little hinges move such huge doors in terms of having a base layer of process and procedure in your agency when it comes to your legal issues. I’ve been teaching this for a long time to agencies, I do a fair amount of speaking, a fair amount of electronic training, and what I always say to these audiences is that having this foundational set of tools and processes in place now, it may feel like going to the dentist, but if it does, it really should only feel like a checkup initially. Putting this stuff in place now is going to save you so much time, and more to the point, so much investment in legal fees in the future that it’s definitely worth slowing down and taking the time to implement these processes.

What I was most validated about is the fact that the survey bore this out. The survey results bore out, in my mind, that this is the biggest opportunity area, you could call it a gap if you want to, but opportunity area for agencies is to just think about putting these processes and tools in place now so that they’re quicker and more nimble to deal with these common recurring evergreen situations later. The contracts are a typical example. Even if you’re going to, like I always say, sign the client’s version of a contract, the fact that you have your own version of one, it makes you smarter about negotiating, it makes the process faster, and it helps you understand whether there’s some danger level in the client’s documents that you need to know about. Yeah, one of the things that we wanted as a result of the outcome of the survey to be was to understand how to help agency owners better. So we’re taking these results and we’re going to translate them into an even better set of access points to the legal stuff that you need to set your processes up for success.

Drew McLellan:

It’s interesting, we’re recording this in the height of the COVID-19 crisis here in the US, and for much of the world right now, we’re all sort of getting through it together. Asia is a little ahead of us, but everybody else is sort of slogging through it right now. So, I’ve been spending, shoot, 12, 15 hours a day on the phone with agency owners helping them sort of navigate this. One of the points of difference that I’m noticing is the agencies that have great client contracts and the agencies that don’t have great client contracts.

As clients are trying to ratchet back or pause work, and agencies aren’t in a position and certainly don’t have the heart to say, “No, you have to honor the contract for the next 12 months.” But even the 60 day out or the 30 day out, or making the agency hold for work that has been done to date versus the agencies that either had no contract or just had a project authorization that had no legal language in it, and those agencies, the ones who were underprepared, not that anyone was prepared for a pandemic, but underprepared in terms of their contractual language, they’re taking it in the shorts right now because they have no basis to negotiate with their clients to be treated fairly.

Sharon Toerek:

Right.

Drew McLellan:

And because they don’t have a document to start with, and again, they’re all trying to be good people, they’re trying to be understanding, they understand their clients are in a jam, but they don’t even have a place to start a negotiation so that they also are being taken care of fairly and that they find middle ground that is reasonable for both of them.

Sharon Toerek:

Yeah. I mean, you like to create some leverage points to be magnanimous if that’s what you’re going to choose to do in an environment like this, which is the right thing to do.

Drew McLellan:

Of course.

Sharon Toerek:

I mean, I am definitely of the school of thought that generosity and grace and under the current environment, as we’re talking today, is not only the right thing to do, but it’s necessary in the business world right now, because what are we going to do? All clobber each other over the heads with our baseball bats. But having said that, having a contract in place that gives you more options and leverage is going to put you more in the driver’s seat about how to negotiate the workarounds, right? So it’s just another unexpected reason why spending time and resources to put this foundation in place of legal preparedness in all corners of your agency is so important.

Drew McLellan:

Yeah, yeah. What’s happening is when they don’t have, as you say, sort of the levers to pull, they end up going all the way to the extreme of giving it all away.

Sharon Toerek:

Yeah.

Drew McLellan:

As opposed to looking generous and like a great partner by softening some of the language in the contract so that it looks like they are making concessions, because they are, but they don’t have to give away the farm.

Sharon Toerek:

Yeah. Yeah, and I think that that’s a question of confidence of the agency owner. Boy, it’s a lot easier to be confident if you have more leverage.

Drew McLellan:

Sure.

Sharon Toerek:

And the contract is one of the tools that enables you to have that sort of leverage, for sure.

Drew McLellan:

Yeah.

Sharon Toerek:

Yeah, and we’ve counseled clients over the past couple weeks as you and I are sitting here talking about providing different ways of work around things like impossibility clauses, force majeure clauses, pause clauses in contracts, and it’s a lot easier conversation and it’s an easier position for me to be in as someone who counsels agencies. I don’t know if this has been your experience, but if they’ve sat back and taken along your view when they negotiated these deals, they’re definitely calmer about the position they’re in now, even if they are hurting financially. I mean, I’m not going to lie, I’ve got some clients that represent companies in vulnerable industries right now and they’re definitely taking a haircut, but some of those people have been some of the most confident owners I’ve talked to over the last two weeks because they’ve got a plan, and they’ve stretched that muscle of planning and thinking about what their other opportunities are.

One of the untapped opportunities revealed in the survey and that I’ve had a couple of conversations with clients about this past week are where can you look in the corners of your agency to take the assets you’ve already created and monetize them, whether it is creating online learning opportunities, whether it is taking an experiential event completely online, whether it is doing teleconsulting, whatever it might be, and almost 100% involves protecting and licensing and properly using your intellectual property. That’s something agencies create every day and have always created every day but have never really … Many of you listening out there have never really had to take the time to figure out how you can monetize that to create additional revenue streams. Now is the time to do that, and putting some process in place can make it easier for you to go to market with it.

Drew McLellan:

So, one of the things as you were talking that I’m wondering about is, how has the pandemic do you think, how will it change language in contracts? For example, at AMI we hold a lot of little events, little workshops and peer groups, and of course we had the Build a Better Agency Summit on the docket for May, and in none of those contracts was, and even in the force majeure language was the word pandemic, or countries shut down, or any of the things that we’re actually all experiencing now. I’ll tell you what, the guy that negotiates our contracts for us with the hotels, I was like, “I don’t want you to show me another contract that doesn’t have that language in it.” Because I’m not going to get caught in this hot mess again. So how do you think contracts … How do you think this moment in time might change contract language for agencies?

Sharon Toerek:

Gosh, it’s a great question. I can tell you from a personal experience that I had writing a new agreement for something that’s going to occur next year, that we certainly broadened the definition of force majeure and impossibility in that agreement, and we’re certainly going to look at our standard master service agreement recommendations and address this there, whereas it’s something we never really had thought about because in all the years I’ve been practicing, and I’m certainly not new to this game, but I have to say even in the recession, even after 9/11, well I wasn’t really practicing after 9/11 much, but we never had to address this particular issue in the contract of impossibility of performing.

Drew McLellan:

Right.

Sharon Toerek:

No, so not in this way for a global health emergency or a pandemic, certainly if we were at war or things like … That’s the kind of stuff you’re used to seeing in those clauses. So we’re drafting them more broadly and more carefully, but I think the global answer to that is going to be largely based upon what the insurance carriers decide to do about their coverage language, and I don’t think they’re going to be a friend to most business owners who pay premiums because they’re not in the business of paying claims, that’s not how they return money to their shareholders, right?

Drew McLellan:

Yeah, right. Yeah, I’ve had a lot of agency owners call their insurance company to see about business interruption insurance, and they’ve all been saying, “Sorry, pandemic doesn’t count.”

Sharon Toerek:

Yeah, yeah.

Drew McLellan:

Yeah.

Sharon Toerek:

Well, and they’re certainly not going to add it into their coverage, unless they’re somehow pressured by the government to do so, which I don’t see happening.

Drew McLellan:

No.

Sharon Toerek:

So, we’re going to do the only sensible thing we can do as drafters of these agreements and broaden the language so that contractually between the parties. How enforceable it’s going to be in the future I think will be largely dictated by case law interpretation. We’ll see a lot of cases within the next 18 months I’m sure of attempts to interpret that language and it’ll ultimately I think come down to whether there’s insurance coverage for a broadened definition, which I’m not hopeful for, at least not right now.

Drew McLellan:

But again, as we were talking about earlier, if it’s in the contract, even if there’s some ambiguity to the language, it gives you a point of discussion and negotiation.

Sharon Toerek:

Absolutely.

Drew McLellan:

If it’s not in the contract then guess what? There is no negotiation, right?

Sharon Toerek:

You have no option, right.

Drew McLellan:

Right.

Sharon Toerek:

Yeah.

Drew McLellan:

So I want to talk a little more about what you learned about in the survey and how agencies, if they are, helping their employees, especially their accounts service people who deal with clients every day, how they’re getting their folks more attuned to legal issues, and I also want to learn a little more about the segments that you found and sort of see if we can self-identify ourselves in those segments

Sharon Toerek:

Okay.

Drew McLellan:

But first let’s take a quick break and then we’ll come back and we’ll chat more about the survey results.

Sorry for the interruption, but I wanted to make sure you knew that for a limited time, probably till the end of June or so, we are offering all of our on-demand courses at 50% off. I know that all of you are trying to maximize any spare time that you or your team have, and this may be a great time for you to think about biz dev, get your AEs tuned up, or think about how you’re going to manage the money inside your agency. So we have those three courses. We have the AE Bootcamp, we have the Agency New Business Blueprint, and we have Money Matters, all on demand and for now all at 50% off. All you have to do is head over to agencymanagementinstitute.com online-courses. Again, agencymanagementinstitute.com/online-courses and you will see the description for all three courses and you can register there. All you have to do is register and it automatically calculates the 50% off. I hope it helps.

All right, welcome back. We are here with my friend and my attorney, and AMI friend, Sharon Toerek, talking about all things legal and what she learned in the research she did recently with Audience Audit and Susan Baier. So, one of the things that we certainly do in the Agency Edge Series is we too sort of categorize and segment out the audience based on their responses, and I know you guys did that too. So, what did you learn about the three groups? What was sort of telling to you about the three of them, and maybe give us a couple characteristics of each of them so we can sort of self-identify where we might fall in the categories.

Sharon Toerek:

So, the three categories, so it was very interesting to me, were proactive and protected. About 29% of the agency leaders who responded sorted themself into that category. We got exposed and anxious, and that was about 31% of our respondents, and then you got the lawyer avoiders, my personal favorite, at 41%, which I guess I personally could get a little depressed about, but it’s the minority if you take the other two categories and add them together, so.

Drew McLellan:

Yeah, or the flip side of that is they have these preconceived notions of what an attorney is and what an attorney does for them, and I think one of the things you are doing with your content strategy, and your podcast, and all the things you’re doing to freely educate agency owners is hopefully busting some of the myths that those people have about attorneys.

Sharon Toerek:

We hope so, and we hope that some of the solutions that we end up creating to help agencies manage and navigate their legal issues will help some of the avoiders as well because they’ll feel safer accessing the solutions. So I mean, most of the lawyer avoiders, a common characteristic there or two were that some of them had either had a negative experience in the past working with counsel, whether it was a result of the amount of fees that they ended up spending, or whether it was not getting the desired result in a dispute or some sort or another, or whether they just are not true believers in the nature of being proactive from a legal perspective in your business. They tend to be, as you might guess, more comfortable with risk assumption, right? They’re a little more comfortable with a DIY approach when they need to be, and just in general access the legal talent that they need infrequently.

The exposed and anxious it’s funny because they are quite sophisticated, I would say, about the issues that their agency might face or has faced, and they do access legal help. They are just more convinced than the other two segments that self-identified that there might be something they’re missing or that the nature of the discipline of marketing is dynamic, and so things might change. So, we might be covered today but we don’t know what’s coming around the pike. Privacy is a great example of that, influencer marketing is a great example of that. Then proactive and protected, they are not shy about accessing the legal help they need early and often the owners of those agencies also tend to spend their time more focused on fewer areas within the agencies so they can really take a deeper dive.

Drew McLellan:

So they’re spending more time working on the business, probably not in the business.

Sharon Toerek:

Exactly.

Drew McLellan:

Yeah, yeah.

Sharon Toerek:

And they focus on whether or not somebody’s implemented or integrated processes, or systems, or procedures whereas some of the agency owners in some of the other categories of agency. It had nothing to do with the size of the agency, which was a surprise.

Drew McLellan:

Oh no, nope, nope.

Sharon Toerek:

They didn’t segment out … We didn’t find a noticeable difference in any of these segments based on the size or the revenue of the agency. Our average agency revenue for the survey respondent was around $3 million, and the three to five million category was the largest band. Most of the respondents had revenues in excess of a million dollars in their agency. So, no difference based on number of full-time employees, no difference based on size of agency. A little bit of difference based upon the numbers, the areas of service that they provided. The more services they provided, the more they tended to be exposed and anxious or lawyer avoiders.

Drew McLellan:

Interesting. I think a lot of it is … I mean, really this is a choice, right? Do I choose to engage with an attorney? Do I choose to download a contract from the internet? Whatever that is, so it really does boil down to in a lot of cases the owner’s sort of attitude about and belief system around protecting themselves. I would bet that they would fall into sort of the same kind of categories around insurance and other things too, right? That preventative type things, and I think that’s one of the things that Susan and I have found in our research too, is that the categories that you think would identify people differently, size, gross revenue, number of employees, things like that, rarely do.

Sharon Toerek:

Right.

Drew McLellan:

It’s the underlying things, not the obvious demographic kind of things.

Sharon Toerek:

It was a surprise to me that neither number of full-time equivalent team members or total revenues made a statistically significant difference in the responses. I was kind of surprised about that. I’m also kind of encouraged about it, because it means that there’s room to level the playing field and also to improve in agencies of all types and sizes. It’s also made it really clear to me that the more, I don’t want to say diluted, but D-I-L-U-T-E-D, not deluded.

Drew McLellan:

We’re not judging them, there’s no judging.

Sharon Toerek:

The more your focus as a leader of an agency is scattered, if you will-

Drew McLellan:

Yes, right.

Sharon Toerek:

… amongst different things and responsibilities, the less time you have to focus on this deeply and so the more ways we can step in and help you, whether it’s traditional one-on-one attorney client counseling or whether it’s creating some more self-serve and accessible solutions for getting the tools and stuff that you need to manage your legal issues as an agency.

Drew McLellan:

Well, I mean, this sort of spotlights something that I’m harping on all the time, which is if an agency owner is spending too much time in the business doing everybody else’s job, there’s no one else in the shop that can do the agency owner’s job.

Sharon Toerek:

So true.

Drew McLellan:

And so if they’re a point of contact for clients, or they’re the CFO and they’re running the books, or they’re fill in the blank, whatever it is, if they’re doing work that somebody else inside the agency should be doing, this is the kind of thing that doesn’t get attended to.

Sharon Toerek:

Right.

Drew McLellan:

Yeah.

Sharon Toerek:

That’s so true.

Drew McLellan:

Yeah.

Sharon Toerek:

Yeah, and it’s not the kind of thing you have the space to do any deep thinking about, right?

Drew McLellan:

Right, right.

Sharon Toerek:

If you’re trying to do 10 different other things in your business, and there’s a good case to be made that as the owner of the agency, maybe you’re not the one who should be focusing on legal issues. What I always say though when I get a chance to talk with agency owners about putting their foundational process in place for legal management is it doesn’t have to be you, but it should be one person in your agency. If you’re the best person for that, then it should be you. If there’s somebody else who is equally or better qualified, as long as the process is centralized, consistently utilized, and forced, and is easy to access for the people who need it, like your AEs, for example, who will just take the last contract they see in the system and cut and paste some things into it, or worse, they’ll take the contract they used in at the last agency they worked at, will cut and paste. If you don’t give them an alternative and have a culture in place where this is a process and this is a system we use, then yeah, you’re going to have some headaches and some babysitting, but if you’ve got somebody who can centralize the process, this doesn’t have to be hard, it really does not.

Drew McLellan:

Right. What surprised you the most out of the data?

Sharon Toerek:

I was surprised that there were as many exposed and anxious agency owners, I guess. What surprised me even more than that I would have to say is the inconsistency between the categorizing themselves as exposed and anxious. I mean, we picked the terminology obviously, they didn’t, but them identifying that way but they also had the most process in place and they also used legal resources more frequently than any of the other segments. So, it’s a really interesting psychological study for me. I don’t know the reasons for it, that’s the expertise of Susan Baier and her team, and she would probably be able to better explain it than I do, and I suppose you can anecdotally explain it by the fact that the more exposed you feel, the more you’re going to do to probably close that gap, maybe that’s part of it, but that surprised me.

I am surprised and a little disappointed that there aren’t more agencies who see the potential in developing different streams of revenue or expertise with the IP that they create because I know they could be making money doing it. So, I’m wondering if one of the outcomes of the current environment we’re in, where we earn money in one way might be right for them taking a harder look at. It’s an industry that creates so much intellectual capital. It moves the needle.

Drew McLellan:

And we probably take it for granted and don’t realize the value of it.

Sharon Toerek:

I think that’s so true. I think that’s true and I also think that the nature of being a fee for service business is that you are constantly focusing on the next thing you’re building for a specific client and you don’t always have the luxury of taking a step back to see the patterns in what you’re doing or what you know, or what you’ve learned.

Drew McLellan:

Or the thing that you’ve built to make things easier for your shop might actually be beneficial to others, right?

Sharon Toerek:

Right, yeah. White labeling is another huge opportunity for sure.

Drew McLellan:

One of the things I want to make sure we’re clear about is we keep talking about the respondents as though they selected their buckets, and that’s not the way that works, and I know that’s not what you mean. But just for the listener’s clarification, basically the way the research works is people just answer questions and the pattern by which they answer these questions ends up sort of forming these clusters of people that have a shared set of beliefs that then Susan and her team call a segment, and then as you said early on, then Susan names the segment based on some of the common traits or characteristics of that segment. So it’s not like people are saying, “Oh no, I am …”

Sharon Toerek:

Exposed and anxious.

Drew McLellan:

Yeah, they’re not saying that. They are just answering questions that cluster together to, and then Susan and her team put the label on.

Sharon Toerek:

Correct, and that’s spoken like a true veteran of a number of research projects.

Drew McLellan:

Yes, right, right. I think we’re on number six now, and Susan’s certainly done …

Sharon Toerek:

I’m showing my true rookie status as a-

Drew McLellan:

No, that’s all right.

Sharon Toerek:

… surveyor.

Drew McLellan:

That’s why we have Susan on the team, right?

Sharon Toerek:

Yeah, she’s awesome.

Drew McLellan:

So, I asked you what surprised you the most. What horrified isn’t the right word, but what is the most worrisome of the results for you? What makes on behalf of, because I know you have a big heart for agencies and you want us all to be successful and not get into legal trouble, so of the results, what had you worrying for us the most?

Sharon Toerek:

I think that what had me worried, I would say two things. First of all, taking a DIY approach is one thing, but taking a DIY approach without some guidance about which tools you might be able to adapt, and you may not come up with a perfectly beautiful answer or beautiful tool, but I understand how entrepreneurs like to DIY it sometimes, but what worries me is that the Frankenstein monster you end up putting together as a result of the DIY approach combined with the fact that the same person doesn’t DIY it every single time you take that approach as an agency. That worries me because I’m worried about the outcome if something goes bad on a situation like that. So, I’m worried about that.

I would say the other thing that probably caused me the most concern is sort of the lack of understanding about intellectual property and how many corners of your business it really touches. It touches not only your client contracts, it touches your freelancer arrangements, it touches your revenue, it touches just every single thing you do and I have a big heart for making sure agencies understand how IP works and how valuable it is. So that’s, I don’t know if I’d call it a disappointment or an opportunity area, or maybe both, but those I think were the two things that stood out the most to me.

Drew McLellan:

So, now you’ve got all this research and I know you’re going to use it in your content creation.

Sharon Toerek:

Right.

Drew McLellan:

What marching orders did this research give you? What did it make clear that your audience, small and midsized independent agency owners, what did it make clear that they need that maybe you and your team can, if you don’t today, provide in maybe a newer, different way? So, what was sort of an aha spark moment for you in the research?

Sharon Toerek:

Well, what I hope that most people who embark on a research project like this is that the aha that it created to me was the opportunity that we have at the firm to create solutions to help more agency owners is really within our fingertips. So, we have an opportunity to not only educate but provide accessible solutions that can help agency owners in some of these areas that they identified that they need help in or that they don’t have a resource for. To the extent that price sensitivity is a factor and in the current environment we’re in right now that’s going to be many agencies in the near future. We know that there are ways that we can help them and the survey is helping us to understand what that might mean in terms of creating tools that are accessible online on a self-service basis, creating education modules that agencies can share with their entire teams at a really reasonable to no cost. So, we’re putting these solutions together and throwing them into a model that we want to design for agencies to access electronically and with little to no daily or regular interaction with the fee-for-service model that they’re always concerned about from a cost perspective.

I’m so excited about it because first of all, I get to put my money where my mouth is, right? I get to take the expertise that we’ve developed from all of the agencies we worked with, including I hope some of the folks that are listening to this, and I we get to create this accessible set of solutions and provide access to it for an investment level that we think is going to be virtual for everybody. So, that is the biggest outcome from a helping perspective that emerged from the survey.

We already have a toolkit on the market for agencies, and it’s a nice resource. The challenge with it is that it’s a lot of stuff all together in one package, and it’s not always easy to understand that you’re going to need it all at any one time.

Drew McLellan:

Right.

Sharon Toerek:

So we sort of swung big with that, and the folks who have acquired it have really found it helpful, but we think there’s a way we can make tools accessible in a more dynamic way and in a more flexible way for agency owners and for their team members so that they’re not deciding between Frankensteining a document up or going without, which is even worse.

Drew McLellan:

Right.

Sharon Toerek:

Instead, they’re accessing some help that’s prepared by somebody who understands their industry.

Drew McLellan:

Yeah, that’ll be awesome. I know some of it you already have, I know some of it is underway.

Sharon Toerek:

Right.

Drew McLellan:

So I look forward to sharing it with our audience when you’re ready.

Sharon Toerek:

Yeah, we’re excited. I mean, the current economic situation that coronavirus is creating is giving really fuel to this urgency of ours to get these tools out there so that we can help as many agencies as possible.

Drew McLellan:

Yeah. I hear you. As you know, that’s our battle cry as well.

Sharon Toerek:

I know, I know.

Drew McLellan:

So if folks want to learn more about you, if they want to find out about the toolkit that you mentioned, if they want to start consuming the content that you’re creating, which is super helpful for agencies, where is the place they should go to get all of that?

Sharon Toerek:

Well, thanks Drew first of all for having me on. Our firm is Toerek Law, and you can reach us there at legalandcreative.com. My email is [email protected]. You can feel free to drop me a note directly. Find me on LinkedIn. I’m also on Twitter. If you’re interested in looking at some, there are some free downloadable education tools checklist videos at agencylegalprotection.com, which is also where you can access the information about the toolkit if you’d like to learn more about what’s in it. That is probably the real estate we’ll use when we go to market with the subscription service that I can’t say too much about yet, but I’ve already alluded to what it’s going to feel like from a user perspective, so stay tuned about that. But legalandcreative.com, agencylegalprotection.com.

Drew McLellan:

Yeah. We will include all of those links in the show notes. So, if you’re on a treadmill or biking, clearly a safe distance away from all other humans, and don’t have a pencil with you, don’t worry, just come over to the show notes and you can grab all of those. Sharon, as always, super grateful for you. I’m grateful that you took the time to be on the show, but my gratitude goes far beyond that. You serve so many AMI agencies and you are a calming voice for them when they are in crisis. You help them avoid crisis in the first place by giving them the tools that they need, and you certainly have served them well, and as I said in my introduction, you certainly have served me and my companies well as well, and to boot, as I also alluded in the introduction, you’re just a great friend, so thank you for all of that.

Sharon Toerek:

It’s my pleasure. Thank you as well for always being such a great bridge between wonderful agency owners and our firm. It’s much appreciated. You did legit launch my podcasting career by having me on as a guest here previously and also by helping me launch my podcast, which I don’t think I mentioned, but it’s the Innovative Agency and we talk about innovation topics in the agency world. That was as a result of your leadership and your influence on me. So back at you, thanks so much for having me today. I really enjoyed having the conversation with you.

Drew McLellan:

Me too. All right, guys. This wraps up another episode of Build a Better Agency. Sharon gave you a lot of things to think about, so if you recognize yourself in one of the categories and you’re not happy with the category you recognize yourself in, there’s a pretty simple solution to that. Whether it’s Sharon or an attorney you’re already working with, I always sort of think of my attorney relationship as, and Sharon kind of alluded to it, to the dentist analogy. I would far rather get my teeth cleaned every six months than have a root canal. Anecdotally, as I told you, Sharon has saved me from several root canals in the last six months. So, do not dilly-dally around legal issues because proactive is much better than reactive.

I’ll be back next week with another guest to get you thinking a little differently about your business. A huge shout-out to our friends at White Label. White Label IQ is the presenting sponsor of this podcast. They make it possible for us to come and hang out with you every single week. As you know, because I’ve been telling you for a while, they’re an amazing resource for white-label PPC, dev, and design. They have a special deal for you at whitelabeliq.com/ami. Some free hours of their service are available for you through that link, and I’m just grateful for their partnership and how well they take care of our listeners. So thanks to them and thanks to all of you. I know that this is a crazy time and I am grateful that you gave up a little bit of that time to hang out with Sharon and I today. I’ll be back next week. Talk to you soon.

Thanks for spending some time with us. Visit our website to learn about our workshops, owner peer groups, and download our salary and benefits survey. Be sure you also sign up for our free podcast giveaways at agencymanagementinstitute.com/podcastgiveaway.