Episode 204:

Lawyers, financial planners and insurance salespeople. You joke about avoiding them at cocktail parties, but they are definitely not who you should avoid as agency owners. Many owners think of attorneys as an expense. I can tell you – the preventative investment you make with a lawyer to get a good contract and other tools is a pittance compared to what I have seen agencies lose when they don’t have those good tools.

If you are a high-risk gambler – grab a contract off the internet and use that.

That’s why I invited Jamie Lieberman, founder of Hashtag Legal LLC, to be my guest on this episode of Build a Better Agency. She has over 15 years of legal experience and specializes in helping agency owners protect themselves before they get into hot water.

Jamie brings extensive experience in contract creation and negotiation IP issues agencies face, web and mobile app terms and conditions, and influencer marketing legalities.
Settle in – she’s ready to give you a free hour of legal counsel!

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here: https://www.whitelabeliq.com/ami/

What You Will Learn in this Episode:

  • Why you need to find the right attorney for your agency
  • The absolute necessity of drawing up the right contracts for your agency and some characteristics of the ideal contract
  • How agencies can (and should) protect themselves from potentially hazardous legal situations caused by clients
  • The ins and outs of independent contractors and how to avoid legal headaches and fines
  • Navigating non-compete and non-solicitation agreements for employees and contractors
  • The importance of confidentiality agreements and defining what constitutes confidential information
  • Claiming domain names while avoiding copyright or trademark infringement
  • Why agencies owners should stay abreast of popular trends in the industry, especially in areas such as influencer marketing
“You have to have a contract that sort of lives and breathes with your business. It needs to be changeable. It needs to be audited once a year. It needs to be something that can change as your business changes.”- Jamie Lieberman Click To Tweet “You as an agency are only as good as the information your client gives you, so you have to protect yourself.” - Jamie Lieberman Click To Tweet “Just because you have an independent contractor agreement with somebody does NOT mean they are an independent contractor.” - Jamie Lieberman Click To Tweet “You need to define what confidential information is; it’s different for every business. For an agency, that’s your client list. Those are your processes. Those are your strategies.”- Jamie Lieberman Click To Tweet “I personally say that you should feel comfortable having a drink of your choice - coffee, or I like wine - with your lawyer, and you should feel cool about it.” - Jamie Lieberman Click To Tweet

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Speaker 1:

Welcome to the Agency Management Institute Community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money, and keep more of what you make. The Build a Better Agency Podcast, presented by White Label IQ, is packed with insights on how small to mid size agencies survive and thrive in today’s market. 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, with another episode of Build a Better Agency. Thanks for joining me again.

I am excited about our guest, and when I tell you what she does for a living, you’re going think, geez, Drew, you need to get out a little more. But I think she’s going to surprise you and I think she’s going to just fill your brain with good content and ideas that will actually protect your agency and save you money.

So, my guest today is Jamie Lieberman. Jamie is, I want you to hold on and please do not stop listening or put me on five times speed when I tell you what Jamie does. Just give her 10 minutes to convince you that she is no ordinary attorney. So, Jamie is actually an attorney, a podcaster, and an entrepreneur. She’s been in her own solo practice for about seven years, but has worked in many other law firms before she started her own.

She is now the owner and founder of Hashtag Legal, out of New York and Jersey, and very committed to making the idea of the legalities of running a business, a service business. She works with a lot of agencies, making all those legal rules and must-do’s and helping us understand what’s really a must-do and maybe what’s, yeah, it’d be good to do. Making all of that accessible and not so scary. I am confident that by the time we are done chatting, she will have convinced you that that’s really one of her gifts, is to really be able to talk in terms that we can all understand and help us decide what we need to do to actually protect our agency and make sure that we set up for future success.

So, right now Jamie is running her firm, she runs an all female virtual team, which is focused on providing clients with advice on a wide range of subjects. We’re going to tap into all of it, IP, influencer, FTC, privacy, general business law. I’m going to try and get as much out of her as I can in an hour. So buckle in, I’m going to try and move quickly, I have a lot of questions for her because I know you have a lot of questions around this stuff, but I’m super excited to talk to her. I think you are about to be surprised.

Jamie, thank you for joining us. Welcome to the show.

Jamie Lieberman:

Thank you so much.

Drew McLellan:

So, my job is to get as much free advice out of you in an hour that I can. That’s my promise that I have made to the listeners. So, tell us a little bit about your background and how you came to specialize in law issues that particularly impact agencies.

Jamie Lieberman:

So I’m a lawyer, I’ve been a practicing lawyer for almost 15 years, which every time I say I still cannot believe. I went the traditional law route, where I worked big law in New York City, I worked for the federal government, both were everything you think they were and not in the good way.

So I decided about seven years ago that I was going to go out on my own because I thought that there was just a better way to practice law and I wanted to figure out what that was, because I truly did love being a lawyer. I actually got my start because I had always been a blogger, of all things, nothing related to the law, I just blogged. I actually had a pretty popular blog about living in New York City. I shut that down after I had kids because I no longer lived in New York City, but I was really interested in the blogging world about seven or eight years ago when people started to make a little bit of money in that space. So I started doing some legal work for some blogging, some companies that did conferences for bloggers. One of them about six years ago said, “Hey, would you be interested in talking about legal issues for bloggers?” I thought, yeah, that’s interesting, and I did, and that’s where Hashtag Legal was born.

So from my work with bloggers, naturally went into work with agencies and brands. That started narrowly, just in the influencer marketing space. Then pretty quickly a lot of the agency owners were thinking, well, if you can help me with this then why can’t you help me with all the other issues that I have? That’s really where the practice came from. So that small, narrow niche grew into service professionals, creatives, working with online businesses. Agencies just fall in there and I have a number of clients who either started or run agencies, and just need to know that they have an attorney in their back pocket for when things are either amazing and something new is happening, which is my favorite call, or when there’s something that goes wrong and we need to figure out how to make it right.

Drew McLellan:

Yeah, I’m guessing your world is a little like mine. I will on occasion get a call or text when everything is amazing. However, if I’m getting a call or text on a Sunday night, it is rarely about amazing.

Jamie Lieberman:

Correct, yeah.

Drew McLellan:

Yeah, it is, something is on fire.

Jamie Lieberman:

Correct, yeah. Most of the time the amazing stuff, except for the clients that we’ve worked together for a long time and they know they’ll get in trouble, they forget to call me when the amazing stuff happens. They say, “Oh my gosh, I need legal and I need it tomorrow,” or some cool deal comes in and they want me to take a look at it, I do do a lot of contract reviews. So those are the good ones, but yes, usually something is on fire.

Drew McLellan:

So most agency owners are really accidental business owners. They were really awesome at doing something inside an agency and either they got downsized or they thought their boss was a moron or whatever. Next thing they knew they were hanging up a shingle, probably much like you, thought they would be a solo practitioner. Next thing they know, they look around, they’re like, oh my god, I have employees. How did this happen?

Jamie Lieberman:

Yes.

Drew McLellan:

Right?

Jamie Lieberman:

Yes.

Drew McLellan:

So they certainly, for the most part, did not study law, did not study business law. I think a lot of agency owners are afraid of the law. It feels to them like it’s confusing, it’s in language that no human being other than lawyers understands, and it’s expensive. What are the mistakes that we make as agency owners because we hold that misperception?

Jamie Lieberman:

Ignoring the legal issues, they’re there whether you choose to look at them or not. So most of the issues that I see are the people who stick their head in the sand and say, “This will go away, this just won’t be an issue,” until there is an actual fire. So many of the issues that come up could’ve absolutely been avoided. I don’t believe in shame, so anybody who’s sitting here and is going, “Oh my god this is me,” you shouldn’t panic about that. There should not be fear, there should not be panic. You should just say, “Okay, this is something I need to put on my list as a business owner that I need to tackle.”

When you find the right partner, when you find the right lawyer, it’s not scary and it’s not that bad because the right person will understand your business and will be able to walk you through the issues without using legalese, without using those big words that are just… they drive me crazy and I’m a lawyer. There’s no need for them, it’s very simple once you get your head wrapped around it and you’re able to step back and say, “Okay, I trust my attorney. They speak my language, they answer my calls. I don’t get a bill every single time I send an email.” When you find that relationship, and we exist, I promise, the fear instantly goes away.

Drew McLellan:

So what are the mistakes that in general, okay, I’m ignoring the issues, but what does that look like in practical terms? How does that show up and bite me in the rear end?

Jamie Lieberman:

So the biggest one is the client contract. You don’t have one or you have one that your friend gave you because you’re in a mastermind and that worked for him or her. You pulled it off the internet, there-

Drew McLellan:

What? Wait, wait, wait. Are you saying that contracts that we find on the internet are not as good? Is that what you’re saying?

Jamie Lieberman:

This is our mic drop moment where we’ve just changed the world right now.

Drew McLellan:

That’s right, there we go, okay.

Jamie Lieberman:

That’s it, we’re done.

Drew McLellan:

Thanks for listening, everyone.

Jamie Lieberman:

That’s it. Contracts on the internet are not awesome. Templates are hard and I know there’s loads of people that sell them. In some cases they may work a little but particularly agency work, what you’re doing is so customized to every client that you have to have a contract that lives and breathes with your business. It needs to be changeable, it needs to be audited once a year, it needs to be something that can change as your business changes because I know that my… I mean, I can look at myself personally who’s been in business for seven years. My clients, many of whom I’ve grown up with, we laugh about their businesses have taken so many different turns. When that happens, you have to step back and say, “Are all my legal documents protecting me? Are the things that I’m doing being protected?” So, not having a contract or not having a contract that’s tailored to your business, that’s a really big one.

Drew McLellan:

So when you audit a contract, what are the kinds of things you should be looking for or what are the kind of things when you audit? Like, if I were to show you my agency’s contract, what are the kind of things you’re looking for to make sure that it’s rock solid?

Jamie Lieberman:

So the first thing I’m actually going to ask you to do is give me a brain dump, which people always are like, “what?” I’m like, write down everything you do because everybody does something different, everybody has a different practice of different policy. It’s very specific to how you conduct business. So I need information, I need to know how you specifically do business. How do you work with clients? What issues do you see? Some people want to do that over the phone where I take crazy notes myself, or some people just give me a Google Doc of a stream of consciousness. These are my services, these are what I offer. Then I parse-

Drew McLellan:

Here’s how we bill, here’s how we charge.

Jamie Lieberman:

Exactly, yes, exactly.

Drew McLellan:

These are the industries that we work in.

Jamie Lieberman:

Here’s who my clients are, exactly, and what they’re looking for from me. So and then once I take that, I’m going to look at your contract and I’m going to make sure that the pitfalls that I can see, such as, are your deliverables clear enough in your contract? You may have 100 emails with your client telling them what you’re going to do, but if your contract’s not clear about that, that’s all that matters.

There’s this little clause in contracts that a lot of people don’t know called the entire agreement clause. You’ve seen it in every contract, nobody realizes, but what that means is, if you have a clear contract and they call it in the legal world the four corners rules, you’re not going to go outside of that contract for evidence if it’s clear from the face of the contract what the deal was. So all these emails you have and you think to yourself, oh well if there’s ever an issue we’ll go back to the emails. You may not be able to go back to the emails. So putting in your contract is really important.

So what you want to do is make sure that your deliverables are really clear, and if you do have emails and you want to reference them into your contract, that’s fine too. You can do that, you can say, “We’re going to agree to this point at a later date and we’re going to do it via email.” Then when you do it over email say, “Hey, this is incorporated into the contract. This is the timeline that we didn’t know yet,” because maybe you’re helping someone with a product launch. You don’t know certain dates, and so you may not be able to put that in your contract. That’s okay, but if you have a flexible document where you can insert that later, and make sure you insert it later, then you can cover yourself. So things like that, making sure that your deliverables are clear, laid out, and they’re detailed, including timeline.

Another one is payment. Make sure you know how your client pays you. What are the terms? Is it net 30 or is it net 90? There’s a huge difference for an agency owner.

Drew McLellan:

Right, because if you say net 30 you’re going to get paid in 90, right?

Jamie Lieberman:

Right, exactly.

Drew McLellan:

Yeah, that’s agency life.

Jamie Lieberman:

If you say net 90, it’s like six years.

Drew McLellan:

Right, right.

Jamie Lieberman:

Yeah, and so that’s really important, understanding if you’re working for a small company who’s really agile, can write you a check or throw their credit card into an invoice that’s one thing, but if you’re working for a huge corporation that has a whole accounts payable department that you have to put invoices and numbers and things, you need to know that. So you should have that noted in your agreement as well.

There are little tweaks that we make, revisions are another one. If you’re doing strategy for somebody, if you’re presenting certain ideas to somebody, if you’re doing creative for someone. How do revisions work? How many times do they get revisions? Do they get revisions on all of it, some of it, how does that work? At what point do they incur extra fees? It’s important to lay that out in the beginning because if you lay it all out, one, everybody’s happy. It’s a lot easier to go back when someone might not be happy and point, well, we agreed to this already.

Drew McLellan:

So I have 97 questions. What you are describing to me, because it sounds like you’re saying that contract is almost at a project level. In many agencies they think of that as a scope of work. So many agencies that I know have a master services agreement. So it’s like, here’s the one document I’m going to get the client to sign that does all of the, who owns what, when, pricing, if we have to sue each other, here’s the state we’re going to do it in, all that stuff. Then they have a scope of work, which I don’t think most agencies think of as a contract.

Jamie Lieberman:

So it should be exhibits. So what I usually do is I draft an MSA for an agency so that you can incorporate exhibits. That way you’re not signing this bulky document every single time.

So let’s say you have a client and you’re working on multiple projects with them and you know that. Each project can be its own exhibit to that agreement. So if after a year you’ve worked with this client and they love you so much they want to sign you on for six more projects, the way that the contract is written, it enables you to just add exhibits so that those agreements still work, and then you’re incorporating those exhibits as your scope of work. That’s the easiest way, it’s very simple to use, we don’t have a million people running through legal, but you have all the things you need in there for each project. So there’s a document we can go back to for each project and say this is what the requirements of it are. So that is usually how we would do that.

Drew McLellan:

Okay, so I’ve got a master services agreement, and then I’m going to write these exhibits that we would call a scope of work or a-

Jamie Lieberman:

Exactly.

Drew McLellan:

… [crosstalk 00:15:08]. Is that a legal document and do I have to have the client sign every one?

Jamie Lieberman:

So some people do, some people don’t. It really depends on how the master services agreement is worded. So you can make it so that you can have sign-off in a certain way so that if you don’t want to have it signed every single time, we can draft that in. A lot of people do like to have it signed just because it’s peace of mind, and I prefer that. I’m always wanting people to sign everything, but those scope of works, they don’t have to be… there’s not a lot of legalese in them because you’ve covered that in the MSA, but they are your deliverables, your revisions, things like that.

Sometimes I find ownership can sometimes go into those scope of work, because ownership can change by project, depending on what you’re doing. Sometimes, most of the time the client’s going to own most of what you’re doing but sometimes with drafts or things like that, you may want to keep [crosstalk 00:16:08].

Drew McLellan:

Or concepts they don’t buy.

Jamie Lieberman:

Exactly, and that can change. Sometimes your client wants to buy all the concepts and says, “I’m taking it all and we use it or we won’t.” Sometimes you get to keep those concepts. So ownership provisions sometimes can go in your scope of work, depending on… or you can change them in your scope of work depending on what the project is.

Drew McLellan:

So do you recommend that an agency has… and again, that they get legal counsel to do this, but they have a master services agreement that for the most part is going to work for all of their clients. They also have some sort of a template that at least says, here are the elements that need to go into this scope of work or this exhibit. Then they basically build to that recipe, if you will?

Jamie Lieberman:

Yes, exactly. I have a lot of services clients that do this, it’s not just agencies. Designers will do it, any kind of service… when you’re providing a service to someone, this is really the smartest and easiest, most efficient way to be able to do multiple projects without getting bogged down in these massive legal documents.

Drew McLellan:

Right, and so when you’re auditing, so you’ve got the information from an agency and you’re auditing. What are the big mistake that we make in our brilliantly crafted, internet based contracts?

Jamie Lieberman:

A lot of people leave out ownership or write it very strangely, where I’m like, I don’t know who owns this. The deliverables are a big one. A lot of TB-

Drew McLellan:

In terms of how specific the deliverables are?

Jamie Lieberman:

Yeah, or sometimes they’ll just say like, big project TBD, timeline TBD, so many TBDs. Sometimes I see it left out if you’re an agency who’s going to go out and get subcontractors, just being allowed to do that. If there’s NDAs involved, because sometimes there’s hush-hush products, you need to make sure that you’re allowed to use subcontractors, because I’ve actually seen that happen where the client was like, “I did not know you’d be contracting out and if I did, then they would’ve been subject to something else.” So just putting that in there if you do plan to use a subcontractor who’s maybe not your employee. I see that sometimes.

Payment terms, which we’ve mentioned already. A lot of that, limitation on liability, indemnification. You as an agency are only as good as the information your client gives you. So you have to protect yourself because what if they give you something that’s wrong or a lie or is false?

Drew McLellan:

Or illegal or whatever.

Jamie Lieberman:

Yeah, and you can’t know that. So you should really be protected in that way, making sure that you’re indemnified for any issues with say… I’m using the launch of a product as an example, but they’re launching a product and you’re involved in that, and somehow you need to make sure that you’re protected because what you’re creating is only as good as the intellectual property that they give you. That’s the other thing, if they’re giving you intellectual property, make sure they own it. So doing that, yeah, seen that happen, because you’re on the hook. If somebody gives you intellectual property that they don’t own and can’t license to you and you start using it or incorporating it. So make sure that you’re indemnified and protected in that way.

Drew McLellan:

So you mentioned independent contractors. What about the independent contractors that we pretend are employees and they have business cards for our agency? Not that any of my listeners do that, but other agencies I think probably do. What are the risks of that and what kind of documentation do we have to have with those folks?

Jamie Lieberman:

If you’re in California, you should stop listening because independent contractors almost don’t exist in California.

Drew McLellan:

I know, well, that’s a whole different country when it comes to rules.

Jamie Lieberman:

That is.

Drew McLellan:

Every time I talk to one of my California agencies, I’m like, “I have no idea how you function there.”

Jamie Lieberman:

Yeah, I actually have a California lawyer on staff specifically for that reason, because it’s like a different world. I mean, I joke about that. There was a recent ruling in California about independent contractors severely limiting who can be classified as an independent contractor. New York has some funny stuff too, but for the most part a lot of people, and many of my clients do it, I get it. Pulling the trigger to hire an employee can feel scary. It’s not as bad as you think, which is what I always tell people. The increased costs are not as awful as you expect. It’s hard when you have cyclical work because you don’t want to be guaranteeing people time you want people to work on projects.

The downfalls and the pitfalls are if you do have someone who’s working for you who you’ve classified as an independent contractor, and you’re either audited or they file a claim for unemployment and they should’ve been classified as an employee, you’re going to be the hook for some pretty severe fines.

I have other clients where worker’s comp can come into play, although that doesn’t probably come into play as much here, but really it comes down to the state where your employee is working wants their taxes. So they want… is in many people’s interests to get those employment taxes. They’re important to states and to protect employees and independent contractors because a lot of times companies want them to be independent contractors. I’m talking large corporations who should know. I’m not talking about the small ones, but they characterize them in that way to avoid benefits and things. For a small agency, that’s usually not so much the issue as they just don’t know, or they started as a true independent contractor and then it shifted. So, it’s just, you could be subject to some pretty severe fines and I’ve had it happen to clients.

Drew McLellan:

Define pretty severe.

Jamie Lieberman:

I had a client that had one independent contractor and somehow… and it’s a very long story, I can’t get into the details but it was discovered by the worker’s comp board that she was not paying her. They said she should’ve been an employee, and it was over the course of maybe a year and a half. Those fines that we had to fight were $55,000.

Drew McLellan:

Holy buckets.

Jamie Lieberman:

Yeah, it’s not small. The fines are not a joke. This was over a long period of time, I don’t want everyone to be paranoid now and start panicking because I know I speak a lot and I know there’s moments when I say those things and everybody literally has the anxiety attack where they have to hold themselves and sit down.

Drew McLellan:

Breathe in the bag, breathe in the bag, yeah.

Jamie Lieberman:

You can fix it, it’s okay. Not everybody is an employee, there are true independent contractors. So there are things, there are factors, there’s no bright-line test. I think that’s what is so challenging to people who are not attorneys. We’re really used to gray area, everything’s an argument for a lawyer which drives me crazy but is true. So there’s tests, there’s these factor tests, and it depends on the state that you’re in, which should lead me to the disclaimer that everything we’re talking about is information and may be specific to the state that you’re in, but each state is different.

Like I mentioned California, but for the most part if you have somebody who’s doing work that’s in your business, doing the work of your business, they’re required to show up during certain hours. So you say to them, “I need you to be available between the hours of 10:00 and 2:00 every single day.” You pay them hourly or on a salary. They have clear tasks and duties they can’t say no to, and that they’re doing them every single day with regularity. That person is probably an employee. They have an email address, a title, business cards. They hold themselves out to the world as being able to bind you in some way, like if they emailed a client, the client would answer them because they would think, oh, this person’s an employee. Those are some of the things you have to look at.

Drew McLellan:

Let’s take a quick break, and when we come back, let’s talk about the documentation we need with each of those entities and how to protect ourselves. So, we’ll be right back.

Thanks for tuning in to Building a Better Agency. I just wanted to take a quick second and remind you that throughout the year, AMI offers workshops for agency owners, agency leaders, and account executives. So if you head over to the AMI website and you check out under the training tab, you’re going to find a calendar of all of the workshops we offer throughout the year. We cover quite a wide variety of topics, everything from biz dev to creating a content machine for your agency, to making sure that you are running your business based on the best financial metrics and dashboards that you can. We also have a workshop on agency owner management hacks, all the best practices that agency owners are using to run their businesses well and profitably. Of course, you’re always going to find our account executive bootcamp and our advanced AE bootcamp.

So go ahead and check it out on the website, and hopefully one of those will meet a need for you and your agency. We’ll see you soon. Let’s get back to the episode.

All right, we are back. Now, here’s what I’m going to say to all of you. I am betting you money when you heard my introduction and you heard that my guest was a lawyer, you were like, oh, you’ve got to be kidding, Drew. Now you’re like, I want to hear more from Jamie. So there, first of all.

Secondly, okay, Jamie, when we took the break, we were talking about the difference between independent contractors and employees. I asked you, what kind of stuff, what kind of papers do I need for each of those to protect myself and the agency.

Jamie Lieberman:

So, independent contractors are a little easier, an independent contractor agreement. So anytime you hire anybody to do anything for you, just make sure you have a good independent contractor agreement. That governs the terms of the work that they’re going to do for you. Much like I said with the client services, make sure the deliverables are clear, make sure the ownership is clear of who owns the work that the contractor’s creating. Designers in particular, there’s a lot that goes into their ownership, particularly when you talked about drafts and concepts. Some of my most complex agreements are for designers. A lot of designers will have their own, which is great. So if you’re hiring someone on a contract basis, see if they have a contract, if they don’t, you should provide one. So, understanding the ownership, understanding when things are due, how you pay that contractor. Make sure you have a non-solicitation clause in there, meaning they can’t solicit your clients.

Drew McLellan:

Or your employees, right?

Jamie Lieberman:

Correct, yes, clients and employees, exactly. Those in most states are enforceable. I know there’s a lot of question about non-competes, things like that. You can have exclusivity provisions in independent contractor agreements, where they’re doing work exclusively for you and if you’re paying for that, you want that during the time they’re working for you, it’s something you can bargain for. You have a little bit more flexibility with independent contractors.

I will say this because a lot of people thing that this is true and it’s not. Just because you have an independent contractor agreement with someone does not mean they’re an independent contractor. So that’s not definitive, you don’t get to decide, the government does.

Drew McLellan:

Whoever wants your money gets to decide.

Jamie Lieberman:

Exactly, so that is frequently the first thing that someone says. They’re like, “Oh, we’re fine, we have an independent contractor agreement.” I’m like, well, I wish it worked that way but it doesn’t. So yeah, so that is important to note, but you do want to know. Put a clause in there that they are an independent contractor, you’re not partners, you’re not joint ventures, things like that.

So there’s also indemnification. Same thing I was talking about before, if somebody’s creating for you, you can’t know that they’ve created it. So you need to make sure that you’re covered for whatever they’re creating for you, that they didn’t just lift it off the internet.

Drew McLellan:

Right, right, where all good things come, apparently.

Jamie Lieberman:

Exactly, for employees it’s a little bit different. It’ll vary state by state, it will also vary based on the number of employees that you have. Generally speaking, you can do an offer letter and you can do a nondisclosure agreement, which is really important. That’s also important, confidentiality provisions for your independent contractors, and in your client agreement too. So while I’m thinking back about it. Nondisclosure agreements, non-solicitation, non-competes, some states they’re not enforceable at all, some states they are. You just have to make sure that if you are going to go down that road, you talk to an attorney who knows and knows how to draft them because they’re very specific to being enforceable, how they’re drafted. But non-solicitation, that’s different. That, you can enforce in most states. You have to make sure obviously it’s drafted correctly. So for employees, you’re going to want to make sure that you have all that.

Some people want the work for hire, invention assignment. So if somebody’s working for you and they create something using your company resources, you own it. So some people will have that. Some people do a full fledged employment agreement. I have certain clients who want an employment agreement. The important thing with an employment agreement is to make sure you don’t come out of what we call at-will employment. That means you can hire and fire the person as you wish, as long as it’s not for a discriminatory purpose. So some states, if you put certain language into an employment agreement, I’m blowing everybody’s minds with boredom in lawyer-ness. You can pull yourself out by accident of the at-will employment relationship. So just talk to a lawyer to make sure that you’re drafting things correctly, particularly if you’re hiring employees.

Some people do employee handbooks, I think those are great for setting the tone for your staff. If you have one employee, you may not need to but as you grow, it’s something to think about.

Drew McLellan:

So I just want to make sure I am tracking with all the language. So a non-compete is if I fire you or you quit, you can’t go work for a competitor for a period of time. What you’re saying is, some states you can do that, other states not so much?

Jamie Lieberman:

Yeah, and there are also two things that go into a non-compete, which are the geographic and time limitations. So if I were to say, “You can’t go work for any of my competitors in the entire United States for the next five years,” that probably would not be upheld because you can’t at its core, at its policy, prevent someone from making a living. So that’s really what you have to think about. It sounds to a lot of people like you have to think about, what is driving these rules? That’s what that is.

But if you’re an agency that has a very strong local presence and you say, “All of my clients are local in this five mile radius. I don’t want you to go work at another agency in this five mile radius for the next six months,” depending on the state, you might be able to enforce that because you’re not really stopping someone from working but you’re protecting your agency. You’re protecting your client base.

Drew McLellan:

So what if I’m an agency that is not geographically based? Let’s say I’m an agency that works with AG clients. Can I put in there that they can go work for another kind of agency but not another agency that specializes in AG?

Jamie Lieberman:

You can try, it would really depend on the state and it would-

Drew McLellan:

Or could I list specific competitors?

Jamie Lieberman:

That is something that people will do, is there are specific places you can’t go to for this certain finite amount of time. Like I said, there are some states who would say no, but yeah, the more narrow you get, the more you’re thinking correctly. The more you’re thinking to yourself, my true purpose is not to stop this employee from making a living, my true purpose is to just protect myself. We work so hard, we built these businesses, we have these client relationships, and then you hire someone and all of a sudden your staff has relationships with the client. That’s panicky, I live that. I get it, I have staff too, and they interface with my clients, they have to or I can’t scale. So yeah, this is the ways that we can protect that.

Drew McLellan:

Okay, so that’s a non-compete. The non-solicitation is if you leave, you can’t approach a client or one of the employees, right?

Jamie Lieberman:

Correct, yes.

Drew McLellan:

Okay, and then obviously in every agreement, we’re going to want to have a confidentiality clause or agreement or something that is, we keep our secrets.

Jamie Lieberman:

Yes, those are important and they should be pretty detailed. Just saying you keep our secrets confidential, you need to define what confidential information is, it’s different for every business. For an agency, that’s your client list, those are your processes, those are your strategies, those are-

Drew McLellan:

Probably financial information, yep.

Jamie Lieberman:

Financial, exactly. Yes, but it’s different. That would be very different than say a large product based company. That might be their patents, their products, things like that. So it just varies based on the industry that you’re in for agencies. You want to make sure it’s defined because then it’s more enforceable. If your confidentiality provision is way too broad and tries to knock in the kitchen sink, you run the risk that it’s not an enforceable confidentiality clause.

Drew McLellan:

Okay, all right. So our contract need a little bit of work. We need to make sure that we are documenting our relationships with independent contractors and employees properly. One of the things you and I were laughing about before we hit the record button was this idea that I think a lot of agencies… and again, probably no one listening, but other agencies I know, that when they’re building a brand for a client or they’re naming a product or a thing or whatever it may be for a client, that in today’s world it’s all about the domain name. So, if we go to GoDaddy and the domain is available, the assumption is sometimes made that that means that the name can be legally used. I’m guessing that’s wrong?

Jamie Lieberman:

Wrong, yeah, it is. Names are fraught with peril, I have to say. This is the other really big area that I see issues. Domain law is very different than trademark law. So it’s really important not to [crosstalk 00:34:18]-

Drew McLellan:

Is there domain law?

Jamie Lieberman:

Mm-hmm (affirmative), yeah, yeah, there is. It will put everyone who is not sleeping now, you would be asleep. However, basically, it’s like cyber squatting. So you need bad faith, generally speaking. So it’s different, you can actually own a domain and do nothing with it and you’re not infringing on someone’s trademark because you’re not doing anything. Because let’s say I bought a domain, somebody had a registered trademark, but I launched a product that wasn’t even remotely in the same world as that trademark. It likely wouldn’t be trademark infringement because there’s a lot you have to look into, but clearance of names is really important. A quick Google search, even if you search the trademark database, it’s hard to read, you don’t know how to analyze it.

Drew McLellan:

Is that TESS?

Jamie Lieberman:

TESS, yes.

Drew McLellan:

Yeah, right, okay.

Jamie Lieberman:

A lot of people search TESS and that’s great. I’m thrilled when a client comes to me and says, “I’ve searched TESS.” I was like, that’s amazing, you’re beyond what a lot of people can do, but I subscribe to these incredibly expensive databases that have all these algorithms in them that I can read and see because it’s not just the same name but it’s also a similar name and it’s also not just the same class of goods and services, but it could be similar. The things that the trademark office finds similar is sometimes shocking.

There’s the other thing that people also don’t realize is, there are some trademark owners that are just more aggressive about prosecuting their marks. So they will go after anybody.

Drew McLellan:

Like my beloved Disney. It’s one of the things I don’t love about them.

Jamie Lieberman:

Yeah, and so even if they have such deep pockets, even if there may not be infringement, they’re going to protect their mark, and I understand it. There are famous marks out there, people work really hard for those marks. Sometimes companies can veer into bullying and so but if you’re a small company or a small agency and you got the cease and desist from a name that everybody recognizes, that’s panic inducing and you don’t want to be in that situation.

Drew McLellan:

Even worse if you’ve named something for a client, if that gets out in the wild and then you get the letter. I mean, that’s about as bad a day as an agency owner’s going to have.

Jamie Lieberman:

Correct, yeah, exactly. So sometimes the agency owners will give certain names and say, “I’m not representing anything about whether these are trademark-able.” Same with logos, you probably don’t want to provide that service, but note that. Note that in your agreement that I’m might be naming something but it’s up to you guys to make sure that you can register the trademark for it and the logo. So that’s important as well, to make sure that your client understands that. Most agency owners are not going to represent that.

Drew McLellan:

Yeah, I have several agency owners that basically in that kind of work, where they’re either naming something or they’re creating a mark. In their documentation, they acknowledge that they have not gone through the proper trademark process, that they are happy to provide a referral to a trademark lawyer or a specialist if they would like, or they can use their own. But they’re like, no tag for me. This is not on me.

Jamie Lieberman:

Correct, but I feel like one of the ways that you can be a more effective agency is if you do know some of those basic searches. That way you know how to run TESS at least, you know how to do that Google, you know how to at least say, “Okay, well I’m done.” You’re not representing anything, you’re not telling them you even did that, but the worst thing would be is if you presented a name, you didn’t run it through the system at all and it is a blatant registered trademark, that there’s an issue. It doesn’t make you look great. So it is good to have an understanding, a basic understanding of trademark law so that at least you know what goes into that analysis and you’re able to discard ideas that maybe you wish you could have but you realize pretty quickly it’s not the best idea.

Drew McLellan:

Right, so I’m curious about the relationship that you think a client, an agency owner should have with their attorney. So I think most agency owners think, I have an attorney or I know of an attorney, maybe I don’t even have one. I think everybody should have one, but I have an attorney and I call him or her when something is broken or I have a question or whatever, but it’s not like the dentist. It’s not like I go see my attorney twice a year and get a checkup. Should I?

Jamie Lieberman:

I think a yearly check-in is a good thing, just a quick, yearly audit, even if it’s 30 minutes of your lawyer’s time where you just say, “Hey, here’s all the things that are happening in the business. These are some of the things that we’ve done, this is some of our plans. Do you think there’s anything we need to do?”

Drew McLellan:

What kind of things would I be telling you about?

Jamie Lieberman:

New products, new clients, changes in your services, new employees. Any real big change to your business, if you’ve changed the way you do business, if you’re no longer offering services but now you’re offering content. There could be lots of different ways that your business can change. I think, or if you had a bad situation with a client where something happened and you’re like, how can we fix the agreement so it doesn’t happen again? Even if you were able to get out of that, negotiate your way out of that and figure it out, bringing those to your lawyer’s attention is not a bad thing because they can tweak the contract just the littlest bit so then you don’t have to do that again, because that’s the last thing you want when you’re in the services profession. You just absolutely do not want to be having those terrible conversations. You want it to be all happy and it should.

So I personally say that you should feel comfortable and happy about having a drink of your choice, coffee or I like wine, with your lawyer. You should feel cool about it, and you shouldn’t feel scared that every single time you shoot them a quick email you’re going to get a large bill. You should feel like they understand your business, they know you, they know what you’re doing, and that you don’t dread when you have to call them. So that’s the kind of relationship that I want to have with my clients, it’s why I travel a lot and do a lot of speaking and appearances because I like to have those connections. I think they’re very, very important, they make us all human. It’s really easy to fire off a nasty email to someone you maybe have never met before, but when you put a face to it, it’s much easier to have a little bit of empathy and to just have that. It should be a true relationship.

I joke that I’m in your back pocket, so that you know that when you have that fire on Sunday night, you’re not Googling the answer or a lawyer or sending furious messages out to people saying, “Oh my god, I need a lawyer.” Just find one, see someone who’s comfortable to you who gets you. They should do, I personally think, all… and I do this and I’m going to get some pretty angry lawyers if anybody’s listening. I do a 15-minute consult with almost everybody who walks in the door who may need some help. They need to get to know me and I need to get to know them. So I can’t give legal advice on that, but I want to hear about your business and I want to tell you a little bit about my firm, because I can’t be everything to everybody. I may not be a right fit for everybody, but for the people that I am, they stay. That is the type of relationship that it should be.

Drew McLellan:

Sure, and it’s better business for you. That’s no different than our world. We want clients that stick around and stay with us for years and years. As you said in the beginning of the conversation, that you can grow up together.

Jamie Lieberman:

Yeah, exactly. Yeah, it’s all service and I think the reason why so many people have so many issues with lawyers is because people hold them up on a pedestal instead of looking at us as partners which we should be. Lawyers think this of themselves, I will be the first to say this. I’ve practiced long enough, we’re not, we’re equals, we’re partners, we’re in it together. We rise and fall together, we’re only as good as the work that we do together, and I’m only as good as the information that you give me. So as long as we have that relationship where you’re truly working together, those are the most successful. Frankly, your bills will be the lowest.

Drew McLellan:

I think that’s one of the reasons why people don’t do the check-ins or the whatever, is because if there is a joke on the planet about someone being super expensive, the punchline is a lawyer, right?

Jamie Lieberman:

Yeah, for sure.

Drew McLellan:

So everyone’s like, oh my god, every time I call my lawyer it’s going to be $300, whatever they multiply [crosstalk 00:42:44].

Jamie Lieberman:

Shouldn’t be that way, yeah.

Drew McLellan:

Right, right.

Jamie Lieberman:

It’s silly, I personally don’t practice that way because I think it prevents the better relationships, it just does. I don’t want someone to feel scared to shoot me an email. I will tell you if what you’re asking me is going to take me some time and I do need to charge, but I’m not just going to charge just because I can answer something in five minutes. That’s silly.

Drew McLellan:

Yeah, I find even on the agency side of my world, because I own AMI but I still own my own agency. When we used to bill by the hour, which is eons ago, clients would never call when there was a tiny little fire in the wastebasket, but when the whole building was on fire, they would call.

Jamie Lieberman:

That’s the problem.

Drew McLellan:

Then it costs them so much more money than if they had just called when there was a tiny little fire that we could’ve put out in a heartbeat. So, I hear what you’re saying.

With all of the changes that are happening with privacy and influencer and all the new channels and all of that, what are some of the things that maybe aren’t on our radar screen today because they haven’t had to be, that all of a sudden we need to be thinking about?

Jamie Lieberman:

I really think that influencer marketing is something that a lot of agencies ignore. They push it off, it’s going to die, it’s a fad, it’s not.

Drew McLellan:

No, it’s been around forever, we just called it something different, right?

Jamie Lieberman:

Correct, exactly.

Drew McLellan:

We’ve just redefined what celebrity is.

Jamie Lieberman:

Correct, and in the right way, it can be really powerful. So I think instead of dismissing it, I think it’s important to look at it, evaluate it, see if it makes sense, because it doesn’t make sense for everybody but if you do do that, make sure you get it because I think a lot of people just jump into it saying, “Oh, I’m going find a bunch of bloggers, I’m going to send them a bunch of product, it’ll be fine.” That’s when things go terribly sideways.

So I think that just educating yourself a little bit on what influencer marketing actually is, what it can be, how it can incorporate into a greater strategy for a client, because it shouldn’t be the only strategy. There should be multiple layers. I don’t need to tell you that, you guys are the experts, but just, I go into agencies and brands all the time and talk to them about, how do I start an influencer program? What do I need to know? What do I need to understand? Having been on the other side, I worked for a company that ran an influencer agency so I know what that looks like. This was many years ago, and I see how quickly that particular area has changed and continues to change. It can feel overwhelming to stay on top of it, but just do a little bit of research. I think that is something that is slowly being… I’m seeing it incorporated now more into very large agencies. They’re getting an influencer section and somebody will take it over, who’s maybe been doing it, but some of the smaller agencies either completely specialize. I have clients right now who are just solely influencer marketing agencies, it’s what they do.

Drew McLellan:

Some of our listeners are that for sure.

Jamie Lieberman:

Yeah, yeah, I have a bunch of those. Then I have some others who don’t do that, do some of that. Then some who dipped their toe in and went, oh my god, what did I get into?

Drew McLellan:

Right, well I think with the whole FTC thing and all the dos and the donts, I think again, it can be complicated. So, yeah.

Jamie Lieberman:

Yeah, just a little information I think goes a long way. So sometimes people will just ask me for an hour of my time. Tell me what I need to know. When you’re sitting in the middle of a relationship between a brand and an influencer, there’s contracts going both ways. You have to have a contract with the influencer, you have to have a contract with the brand. You’re in the middle, there’s a lot happening. So that’s there’s… when you have multiple contracts, multiple relationships, there’s more times that things can go on their side.

Drew McLellan:

Yeah, so last thoughts. When you think about your agency clients, if you could wave a magic wand and they would all stop doing something, they would all start doing something, they would all do something different. If you could fix the legal woes of agencies all over the planet, what would be the one thing we should all think about doing?

Jamie Lieberman:

I’d wave a wand and have you all find an awesome lawyer that makes you feel good, that’s really it. It’s just finding the right person. Sometimes you have to interview a lot of people, that’s totally okay. You should, you should have high standards for who you work with and make sure you can trust them, but just finding the right person.

The peace of mind you will have, I mean, the number of times I get off a call with a client where they’re like, “Thank you,” I didn’t do anything yet. We just talked.

Drew McLellan:

Right, but I knew who to call and I knew they would help, right?

Jamie Lieberman:

Yeah, yeah, exactly. It’s off their plate, they don’t have to worry about it. Sort of like the backend of my website which scares the living daylights out of me, I don’t want to think about it, someone else does that for me.

Drew McLellan:

Right, right, well and I think it’s also a, I’ve handed it off to somebody. Well, first of all, you didn’t freak out when I told you what happened. You weren’t like, “Oh my god, lock the doors.” So A, that’s comforting, probably B, that you’re going to take it and run with it and make it go away or make it better or whatever needs to happen.

Jamie Lieberman:

Exactly.

Drew McLellan:

[inaudible 00:48:09] reassuring, yeah.

Jamie Lieberman:

Yes, a calm lawyer is a good lawyer.

Drew McLellan:

There you go, it’s probably personally because of the wine, don’t you think?

Jamie Lieberman:

I think so.

Drew McLellan:

Yeah, all right, if people want to learn more about you, if they want to start listening to the podcast or any of those things, how can they track you down?

Jamie Lieberman:

So my website is hashtag-legal.com, that’s all the info. You can email me directly if you want to ask a question or say hi. I’m Jamie, which is J-A-M-I-E, @hashtag-legal.com. My podcast is the Fearless Business Podcast, and we talk about all the things that many business owners are scared of but shouldn’t be. Not just legal, but lots of other stuff. So yeah, you can find us anywhere that you listen to podcasts.

Drew McLellan:

This has been awesome, thank you for sharing your expertise and thank you for having a passion for agencies and the owners. They are a rare and special bunch, and so I always love meeting other people who love them as much as I do. So, thank you.

Jamie Lieberman:

Thank you.

Drew McLellan:

All right, this wraps up another episode. See, that didn’t hurt at all, did it? So first of all, Jamie gave you a lot of things to dig out of the file cabinet, if you still have one of those, or out of your Google Docs folders or whatever, but go and look at the things that she talked about. Make sure that you have that in alignment, if you don’t and you love your lawyer, then great. Talk to them, if not, I think her advice is a good one. Find somebody that you trust and that you feel comfortable with because this stuff can cost agencies a ton of money.

I unfortunately talk to many agency owners that find themselves in a jam because they didn’t dot the I’s and cross the T’s. So please do not put yourself in that position.

A big shout out and thank you to our presenting sponsor, White Label IQ. They are amazing wholesalers to agencies, if you need design, dev, or PPC help, check them out. They have put together a very generous offer for our podcast guests. So head over to whitelabeliq.com/AMI and check that out. I highly recommend their work, good people, and amazing work, so, at an amazing price. Can’t beat that combination. So, thanks again to them for making the podcast possible.

I will be back next week with another guest to help you think about your agency differently. Just a reminder, we still have some spots open at the 2020, I know it seems really far away, but it is not. The 2020 Build a Better Agency Summit, our very first conference. Amazing two days of speakers and breakout sessions and food. Remember that the night we’re all going to go out together, we’re combining alcohol and darts, and I don’t think really you can go wrong there at all. So, we’re going to have a blast and I would love for you to be there. So, head over to the agencymanagementinstitute.com website and check that out, the Build a Better Agency Summit. I’ll talk to you next week, if you’re looking for me, shoot me an email or head over to the website and fill out the contact form and I will get right back to you. All right, see you next week, thanks for listening.

That’s a wrap for this week’s episode of Build a Better Agency. Visit agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening.