#171 Legal Secrets every creative MUST know
In my business, I work with a lot of creatives to set them up for success and protect their ventures through well-crafted legal documents. Over time, I've noticed that I have the same recurring conversations and answer similar questions from my clients. So today I’m revealing the answers in one spot so you too can know the legal secrets that every creative entrepreneur must know.
The Power of Tailored Client Service Agreements
Your client service agreements, when customised for your unique business, can be the most powerful tool in your arsenal. Don’t use templates, copy someone else or cobble something together from Google searches. Instead, invest the time and resources to have these documents tailored specifically for your business. Engage a business lawyer who understands your industry and the unique risks you face. This will ensure that nothing is overlooked and you are properly protected.
Your Processes and Systems are Important
Having tailored legal documents is only part of the equation. Your processes and systems are equally vital to ensure that these documents are implemented and executed correctly. This includes how you issue your client service agreements, proposals, and quotes. It also involves the sequencing of these documents and the proper wording in your correspondence with clients.
By developing robust internal processes and systems, you not only set yourself up for success but also manage client expectations and compliance with consumer law. If you get the process wrong, you might not be able to rely on your agreements at all.
Your Intellectual Property is Your Gold. Protect It.
As a creative, your intellectual property (IP) is one of your most valuable assets. This is why it's imperative to protect your IP through your client service agreements. Clearly define who owns the IP in your creations, the scope of any licenses granted, and the terms of those licenses.
Consider the importance of trademarks if exclusivity over certain aspects of your business is crucial. However, understand that trademarks can be complex and not everything is trademarkable.
Build from Solid Foundations
Many business owners overlook the importance of a solid business structure. Although not the most exciting side of business, having the right legal business structure is foundational to your success. This involves understanding your options, from operating as a sole trader to incorporating as a PTY LTD company.
As your business evolves, make sure you reassess and adjust your structure as needed, consulting with your lawyer and accountant to ensure your structure aligns with your current needs and goals. The right structure provides confidence, flexibility, and clarity, allowing you to focus on building your business and sharing your genius with the world.
Know Your Risk Mitigation Strategy
Reducing risk in your business is crucial, and there are three main components to focus on: your business structure, insurance, and legal documents. Of these, insurance is often the most misunderstood. Many creatives ask if they really need insurance, and the answer is a resounding yes.
However, not all insurance policies are created equal. Whatever you do, don’t buy insurance online - you won’t understand what's covered and what's excluded. Instead, work with an insurance broker who can guide you in selecting the right insurance for your unique business needs.
I hope you find this episode helpful and if there’s anything further you’d like to discuss, please don't hesitate to reach out. I’m always here to help.
Full Transcript:
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[00:00:00] Tracey: In my business, I work with a lot of creatives. My core client base comprise coaches, creatives, and consultants. And I work with these business owners to set themselves up for success and to protect their business via their legal documents so that they don't need to call a lawyer like me later when things go wrong.
[00:00:42] Because we've got safeguards in place, we've thought about things, we've got the right documents to do the right things. What I am having at the moment is the same conversation with my creatives on repeat. Over and over again, the same questions are coming at me, and I'm giving such similar advice so frequently that I wanted to record.
[00:01:05] these conversations and this advice in this podcast episode to help even more of you out there who listen along to know where to focus and to know what's really important. So in your creative business, there's some legal secrets that I want to share with you that you must know to set yourself up for long term success.
[00:01:27] The first is the power of your tailored client service agreements. When used properly, these agreements can be the most powerful tool in your business. Hand on heart, I say that with absolute certainty because I know the impact these documents can have and I know what they can do. When I'm talking tailored legal documents, I'm saying to you, take the time to have your client service agreements tailored for your business.
[00:02:00] Don't use templates. Don't copy your friends. And don't put something together yourself based on your Google research. Don't do that. That's not going to serve your business because we don't know what we don't know and you don't know if what you're using does what it needs to do. And that's okay. You're not supposed to know.
[00:02:19] That's why you have your business lawyer.
[00:02:22] Then I say work with a business lawyer who knows your industry.
[00:02:27] Work with somebody who is familiar with the risk that your business is typically exposed to, that knows the ins and outs of your operations, that understands how things work in your industry, and who can take the time to get to know your pain points. If you work with somebody with those expertise, you can have absolute confidence that nothing's being missed.
[00:02:45] This person gets you, gets the business, gets the industry, knows what needs to be included, You can rely on the advice when you're working with them to tailor your beautiful client service agreements to your unique business.
[00:02:57] And the 3rd thing I want to say about the importance of having your client service agreements tailored is to beware of unfair contract terms. This is so important. I know it's not sexy. It doesn't sound exciting, but gosh, it's important. I talked more about unfair contract terms on episode 167 of the podcast.
[00:03:19] So if you haven't listened to that one, dive in and take a listen. It's really important that when you are designing your documents for your business. important to make sure they don't have clauses that in there that the law is likely to consider are unfair because that can bring the whole thing unstuck and we don't want that.
[00:03:36] So the power of your client service agreements should never be underestimated. The second legal secret that I want to share with you is that your processes and systems are so important. In your business, and it can be the difference between enforceable client agreements and those that can't be used your processes and systems are so powerful in supporting your legal documents.
[00:04:00] It is no good having your legal documents tailored for your business. But not having processes and systems to implement and execute them. Your processes and systems are going to be as unique to you as your tailored agreements are. So think about things like, how do you issue?
[00:04:19] Your client service agreement, your T's and C's. Do you issue them with proposals or quotes or scope of work? What CRM do you use? What's the sequencing? Are you issuing agreements? Do you need a signature on proposals to move forward? What emails do you send?
[00:04:34] And what wording are you using in your correspondence with your clients? When you're issuing these agreements, you need to know how to use the agreements. So taking the time to develop internal processes and systems that work is priceless. Not only are you setting yourself up for success, managing your client expectations and knowing that you can deliver what you're promising, you're complying with your legal obligations under the consumer law to make sure that your clients are getting access to your terms or your T's and C's of your agreements in the right order.
[00:05:08] So that they've got an opportunity to consider them before they decide to engage you. If you get that wrong, the consequence can be that you may not be able to rely on your agreement at all. So processes and systems, whilst not sexy to some, certainly very exciting to me, are really important. And shouldn't be underestimated.
[00:05:26] The third legal secret that I want to share here for creatives is that your intellectual property is your gold. You know it, I know it. Take the time to ensure that your intellectual property in what you're doing is protected. And you do this in your client service agreements. You need to make it clear to your clients who owns the IP in what it is that you're creating.
[00:05:53] What is the client paying for? Is there a license? What are the terms of the license? What can the client use it for? What can't they use it for? And what are the implications if the wrong thing is done? This is all protecting your IP.
[00:06:08] When we're talking IP, I just want to flag here the importance of considering trademarks if exclusivity over something in your business is important. Now, of course, we can't trademark everything just because we want to. It needs to be trademarkable. There's a lot to unpack when it comes to trademarks, and I'm not going to dedicate this podcast to diving into that.
[00:06:28] What I will say is that if trademarks is something that you've been thinking about or something you'd like to know more about, dive over to the website, the links in the show notes, and you can check out masterclass 2 in my legally empowered masterclass series, which shares with you exactly what you need to know about trademarks, trademarking process, what you can and can't trademark, all the things to help you make a decision as to whether this is important for your business.
[00:06:52] But legal secret three here is intellectual property is your gold. You need to know how to protect it. Legal secret four is build from solid foundations. This is something that is overlooked too often. Get your legal business structure right. Again, it doesn't sound sexy. It doesn't sound exciting, but gosh, it's powerful.
[00:07:15] Know your structure options, understand your options, and be confident in the choice that you make and know that things change and that's okay. So if you started your business thinking, I'm just going to be a sole trader to see whether or not this business takes off to see whether this is a thing.
[00:07:31] That's okay. A lot of people do that. But if you've gotten to the point now where you've realized, actually, this is, I'm going to go all in. This is a thing. This is my thing. This business is my purpose now. And this is what I'm doing. That means it's time to reconsider whether or not you've got the right structure in place.
[00:07:48] You might, great, know it, be confident in it. But if you need to consider alternatives, like incorporating, for example, to operate as a PTY LTD company, now's the time to have that conversation with your lawyer and your accountant and make the change if you need to. Don't think it's too late. It never is.
[00:08:07] Have the right team of advisors around you to give you the support you need to make the decisions that suit you on your business journey and building from solid foundations in your business means having the right business structure in place for where you're at now.
[00:08:24] This can mean so much going forward. It gives you confidence. It gives you flexibility. It gives you clarity on what it is that you're wanting to achieve in your business. The right structure means that you can continue going forth and building and sharing your genius with the world with a structure that works and serves you and that is going to support you, achieve your goals, your objectives, and your vision.
[00:08:49] And the fifth legal secret that I want to share with you relates to risk mitigation. So if you're a long time listener, you know that I talk about reducing your risk a lot. You hear me say time and time again, that in business prevention is better than cure, and there's no substitute for preparation.
[00:09:06] So know your risk mitigation strategy. What is your risk mitigation strategy? Just quickly, the risk mitigation strategy for a small business is going to comprise your business structure, Your insurance and your legals. We just touched on business structure. I talk about legals all the time and the very first nugget of gold I shared with you is the power of your client service agreement, which is your legals.
[00:09:32] What I want to say here to you is yes, you need insurance. I get asked this question a lot by my creative clients. Tracey do I really need insurance? Yes, you do. Full stop. It's that simple. The question is not, do I need insurance? It's what type of insurance do I need? So insurance goes to protecting you. We want to set our business up for long term success.
[00:09:57] We don't want something unexpected, bringing us unstuck in our business or compromising the entire integrity of the business. You need insurance. There are several different types of insurance and what you need will depend on your unique business, what you're doing, your industry, and your level of exposure.
[00:10:15] What I'd like to say here is please don't buy insurance online. You do not know what you're getting and you do not know what's excluded. Please talk to a broker. An insurance broker that can support you is worth their weight in gold in business. So knowing your risk mitigation strategy means being across your structure, being across your insurance, and being across your stellar legal documents.
[00:10:40] Those are five real nuggets of gold that I wanted to share with you because this is legal gold that creatives must know this comes across my desk weekly, multiple times a week where I'm having this conversation. So I'm hoping that you've gained something from this that perhaps you didn't know before.
[00:10:59] So to recap the legal secrets that I want you to know as a creative is one. Your tailored client agreements can be the most powerful tool in your business if used right. Two, your processes and systems in business are important and they can be the difference between having an agreement that's enforceable and having an agreement that's not.
[00:11:23] Three, your intellectual property is your gold. Protect it. Four, Build on solid foundations. There's no shortcuts here. Get it right. Get your structure right. And five, know your risk mitigation strategy. If you're across all of those things, you are set up so well, and you should have such peace of mind in your business that you've got all your little legal ducks in a row, and that you're doing all the right things, you're able to sleep at night without having that sinking stomach feeling thinking, gosh, have I missed something?
[00:11:52] Or what if something unexpected happens? Or what if something goes wrong? You don't need to have that feeling anymore because you've got yourself set up properly for success. I hope you've enjoyed this episode. I've loved sharing it with you. As always, if you know any business friends or colleagues or somebody in your community that you think would benefit from listening to these tips as well, please, it would mean the world if you would share the podcast with them, because that's together how we get the podcast into the ears of even more business owners. Thank you so much for joining me. I'll catch you next time.
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