ALWAYS ALWAYS ALWAYS look for the government website on most official and legal matters regarding the legal structure and protection of your business.

For example, a business license in your state, county, or city can generally be filled out by you online, via snail-mail, or in a government office (city hall).  These are standard forms that are not rocket science.  BUT – like most government forms, just be careful when reading the directions.  Depending on where you live, the costs are generally NOT more than a few hundred dollars (if that).  Incorporation service providers, while legitimate (not generally in the “scammer” category) require that you file thru them, often charge 2-3 times this amount, and will ask you the same information the government form does for a fraction of the cost.

As for incorporating, getting an S-Corp, LLC or LLP, the forms can also be filled out by you.  These can be a tad more complicated, but it’s completely doable.  (AGAIN, just read the directions carefully.)  Rather than going thru an ‘incorporation’ service, I recommend that you work with a trusted CPA who can help explain the tax implications to you and/or your family.  CPAs are skilled in advising on organizational structure and can provide guidance and consult if you get tripped up on the application.  (You can also work with a lawyer on this if you need legal help regarding the matter.)

So how do you find the government sites?  Rather than googling “Incorporating in Michigan” you may have to find the city website or county website and drill down from there to the business affairs office where you can find information on how to set up your business.

Trademark scammers seem to be the worst offenders.

I’ve filed 5 different trademarks for 3 different companies in the last few years and trademarking ‘services’ seem to be the biggest scams.  From the minute you search “trademark” on google you are targeted by seemingly legit businesses.  There are a gazillion businesses that will help guide you through the trademarking process for $600-2000.  Here’s a reality check: you can file the paperwork (online) for the trademark all by yourself on the United Stated Patent & Trademark Office (www.uspto.gov) website for $275.

I will whole-heartedly admit that the online forms have some language that may be hard to understand.  But, if you just read the directions clearly, use the USPTO glossary to read upon items you don’t understand, you will be OK.  The whole process takes about 1 hour and can be done in 10 steps.  (I spent about an additional hour on the USPTO site ahead of time just trying to get familiar with the terminology and requirements.  I also spent some quality time on the USPTO facebook page watching their videos – especially the ‘specimen’ requirement video: https://www.facebook.com/home.php#!/uspto.gov?sk=videos).  Google is your friend if you don’t understand any terminology.

Here’s the thing… if you mess up, the USPTO lets you know.  They give you a chance to fix it.  They will send you an “official action notice” which is your cue that you need to go back to your application and resubmit an image or write in something you left out.  I’ve even had USPTO lawyers call me to clarify something I had written.

Honestly, the process seems more intimidating than it is and the 1-2 hours of time is worth the $2000 minimum you’d pay to have someone else do it for you.

A lawyer CAN help when you do need it!

There are times when it’s good to get a lawyer to help you with this.  (I’m talking a real lawyer that was recommended to you by a trusted individual.)  If you are walking a ‘trademark tightrope’ (you’ve seen others using your company name and aren’t sure if you’ll have legal claim to get it trademark) then it’s REALLY important to have a lawyer help you with your trademarking.  (You can search the USPTO TESS system to see if anyone else has applied to use your name as a first step.)

Another time to use a lawyer during the process is if you need advice, counsel, or research, during the trademarking process.  Here’s an example… when I applied for one of our trademarks, the name I wanted was being used by another business but in a totally separate class.  I talked with Katy Carrier of Carrier & Associates to give me guidance on whether it would be a problem and how to best proceed.  It was the best use of my time and money to have her help me with this.  But, I didn’t need her to file the trademark application for me.  I just needed her mind to make the right classification choices.

After you trademark, there’s a whole bunch of other swindlers out there, ready to take your money.

Here’s an example of one of the items I’ve received in the mail:

Now – this could be a legitimate company… but probably not.  I really don’t care.  Their ‘company name’ is trying to appear official – like it is a division of the USPTO.  (Note the word “bureau” and “enforcement”.  Looks powerful, right?)  They claim to be a trademark watch service, a company that will ensure that no one uses my trademark illegally.  They’re right – the USPTO isn’t going to watchdog this for me.  It’s up to me to do.  But, what makes me think this company is legitimate?  (I googled their name and can’t find anything.)  They are using scare tactics to make me think I need their services.  Take note of the “FINAL NOTICE” making it seem like I need to pay this now or I’ll lose my protection on my trademark.  The threat of “services will be cancelled” makes it seem like I could lose my trademark.  It’s all BS.  They want my $575.

And, so do a lot of other people that claim to be trademark protection agencies.  Many of these are from overseas claiming that they’ll protect my trademark in countries such as the Czech Republic, Croatia, etc for $2000-3000.  They are written with the same urgency and scare tactics.

Beware of these scams….

As a rule of thumb:

• never send money to any organization before doing a little research – especially if you haven’t signed up for their services
• always go to a legitimate government website (.gov) to find legal filing forms for your business
• you are better off consulting with a trusted CPA or attorney on these matters than a service that you don’t know from Adam

Have you ever seen these types of scams? What are your thoughts?

Safeguarding Yourself Upfront

The first step in getting paid is getting the terms of payment into the contract you have with your client.  You want to make sure your contract does everything to HELP YOU get paid. Katy Carrier of Carrier and Associates shared her contract knowledge with us a few months ago.  I’m going to brush up on some of the points she made in relations to getting paid.

Deposits vs. Retainers

Do you ask for a ‘deposit’ from your clients?  Time to rethink this.  Katy shares, “In the eyes of the law, the term “deposit” is generally used to describe a first payment toward the performance of services.  So, if you fail to perform the service (like because the wedding is called off a few months before the big day), the deposit would need to be refunded.  It doesn’t matter whether you call it “non-refundable” – if a court finds that you didn’t actually earn the deposit payment, that money must be refunded to the clients.  The better alternative is to use the phrase “non-refundable retainer.”  Unlike deposits, retainer fees are used both to book services for a specific date, as well as toward expenses incurred after being retained by the clients.  Those expenses can include any work done before the actual wedding day, like consultations, meetings, planning and paperwork.”

Terms of Payment

Your contract needs to be clear about the terms of payment.  If you require a 30% retainer, a 40% second payment, and a 30% balance payment, you need to listen these percentages and the corresponding amounts in the contract.  It also helps to have the actual due dates on the contract.  You’ll want to describe what forms of payment you accept (check, credit card, Paypal, etc.)  You’ll also want to describe any penalties for non-payment or for ‘non-sufficient funds’ on a check.

Recourse

The contract should specify what will happen if the client fails to pay.  Will you seek arbitration or mediation with the client?  Katy shares, “Arbitration is a type of dispute resolution that is different from a lawsuit filed in a court.  Arbitration is much less formal and more private, and can be handled either with or without an attorney, and is generally much less expensive and time-consuming than courtroom litigation in front of a judge.  A single arbitrator or a panel of arbitrators is assigned to your dispute to listen to both sides and make a binding decision.”

Tomorrow, we’ll talk about invoicing, payment reminders, and other ways to GET PAID.

Our 32nd comment came from Jeni at Seastar Arts!  Congratulations Jeni!

About Law School for Wedding Pros

Law School for Wedding Professionals is a full day of education designed to help you understand and implement policies, practices and protections for your business. The workshop, led by attorney Katy Carrier, covers topics such as selecting the proper business entity, contracts, insurance, protecting your intellectual property and legal issues in social media, and also includes practical, hands-on training, such as step-by-step instruction on filing copyright registrations, preparing cease and desist letters and filing copyright infringement takedown notices. Your one-day law school admission also includes a custom, attorney-drafted client contract, to be completed within 14 days of your attendance date. Your new contract includes one-on-one attorney counseling and drafting specific to your business’s unique needs.

Here are the cities and dates:

2011 Law School Tour

You can learn more about the workshops by visiting the Law School for Wedding Pros website.

OUR GIVEAWAY!

We are giving away ONE scholarship to the city of your choice.  Simply post a comment below and let us know why you want to attend Law School for Wedding Pros and which city you’d like to attend.  The contest closes at 12pm EST on Friday, September 23rd.  Here are a few more rules:

• Comments must be submitted no later than Friday, September 23, 2011 at noon EST.
• Prize cannot be redeemed for cash value.
• The winners will be selected at random and will be announced Friday, September 23rd, 2011 at 2pm EST.

Image: Creative Commons License

This week I am sharing my tips on how to hire professionals (accountants, lawyers and designers).  Yesterday, I shared what to look for when hiring a good accountant.  Today, let’s talk about hiring a lawyer.  If you think your contracts are protecting you, think again.  You’ll want the trusted help of a good attorney on your side.

Identify Your Needs

Lawyers vary in their expertise and specialty.  Someone who may be great at giving you contract advice, may not be as experienced with trademark applications.  Make sure you are working with legal advisors specific to your business needs.

What You Can Expect

I asked Katy Carrier, owner of Carrier and Associates, a legal firm for the creative business, for her advise on what we should expect from working with legal professionals.  She shares:

“Most attorneys offer some type of complimentary initial consultation, but you should always verify this if it’s unclear. If you decide to hire the attorney, they may require that you sign a contract and pay a retainer fee, which is a sum of money placed in a separate trust account that is billed against for the fees incurred for the legal services. Once you exceed the amount in the trust account, you would get a bill for the overages.

Some attorneys, myself included, do not require a retainer for services estimated to be under $1,000. The billing might be done on an hourly or flat fee basis. Whenever working with an attorney billing on an hourly basis, it is a good idea to get an estimate for the work, and you can also ask to be notified if you hit a certain dollar amount in billable work.”

Make Sure the Attorney Understands YOUR business

All too often I see wedding pros that are being serviced by individuals that don’t really understand their business.  The advisors haven’t taken time to understand the wedding industry or how these small businesses operate.  It’s important that your legal advisor does.  This is especially important as the lawyer is assisting you in mitigating your business risk.  If they don’t understand the risks involved in your profession, it’s impossible for them to be able to provide this protection.

Katy Carrier says, “It’s important for wedding pros to find an attorney who understands what they do as a wedding professional, or is willing to take the time to be educated so that they can deliver the right kind of legal services for that specific business. In my own business, I see contracts from wedding pros that were originally drafted by attorneys (usually a family friend or relative), but it is clear that the attorney did not know about or anticipate the specific challenges faced by that particular wedding pro, be it a wedding planner, photographer, stationer, etc.”

By the way, if you want to get a basic understanding of legal policies, protections, and practices make sure to check out Katy’s Law School for Wedding Professionals, coming to a city near you!

Communicate Your Expectations

As with all professionals that you hire, you’ll want to make you are on the same page with your lawyer.  Express any deadlines you have and what it is exactly that you expect from working with them.

What has your experience been working with legal advisors?  Share with us in the comments below.

Image: Creative Commons License

QUICK – what if something happened to you today that made it impossible to work for a few weeks and you had a wedding this weekend?  What if, god forbid, you were in a car accident?  Had a horrible flu?  Had a family death?  What would you do if you were contracted to service a wedding or event this weekend and you could not?

What is your back-up plan?

Every business owner needs to have a back-up plan in case they are unable to provide services as contracted with a client.  Many of us solely operate our businesses.  We do everything in our businesses.  We are so accustomed to this that we may not be thinking, “What if something happened to me?”

Have a list of alternates.

One of the benefits of networking and knowing others in your region and in your field is that if something should happen to you, you can rely on them to cover for you.  If you have a few colleagues that you know and trust, talk to them about being your “back-up” should anything happen.  (And, offer the same to them.)  If you have day of contractors or assistants, you could use them as your back-ups.  You can take it a step further and list their contact information and keep it in a folder called “emergency”.  These would be people that are called on to help you out if an emergency arises.  They’d be able to jump in and take over to the best of their ability.

Have an emergency plan.

You can take this a step further and include basic “in case of emergency” procedures to include in this folder.  It may list basic information on your company, where to find client details, etc.  (Make sure to review our posts on client management as having operational procedures in place will make it easier for anyone to jump in, should the need arise.)  It should be basic enough to apply to any situation.

Make it legal.

You’ll want to ensure that your contract has the proper language for making a substitute.  You should have something that gives you authority to make a replacement should an emergency arise.  (We are not legal advisors.  We recommend wedding pros talk to Katy Carrier of Carrier and Associates for proper treatment of this in their contracts.)

Tell me… what’s your back-up plan?

This week we are featuring a series of legal posts from Katy Carrier, founder of Carrier and Associates.  Learn about Katy and her firm at the end of this post.

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My last post addressed some important client contract terms and clauses, and today we’ll cover some additional clauses that should be contained in your contract.

Force Majeure:

Force majeure is a French phrase meaning “greater force” or “superior force”.   Some people call this the “Acts of God” clause.  It basically functions to excuse the parties from obligations or liability under the contract if an extraordinary event beyond their control occurs that prevents them from performing their contractual obligations.  This clause generally covers natural disasters like earthquakes, fires and floods or events like wars and riots.  The clause does not include mere bad weather or personal matters like illness, the death of a family member or the desire to attend a funeral.

Say it’s the wedding day and while you’re on your way to the venue there is an earthquake (I live in Los Angeles so this is within the realm of possibility), which rips up the road making it un-drivable, and the phone lines and Internet are down so you are unable to communicate with the bride and groom.  The force majeure clause would cover you in this kind of scenario, and prevent the bride and groom from going after you for monetary damages for failing to perform your services at their wedding.

Incapacitation:

This is another clause relating to your inability to perform your duties under the contract.  This could mean that you develop a serious and debilitating illness six months before the wedding, or that something happens on the wedding day itself, like a car accident on the way to the venue.

This is where you can spell out in your contract how you would handle such a situation, such as by stating that you will find a suitable replacement for yourself if possible, but that if it is impossible for you to locate a replacement or facilitate a transition, you will return a reasonable percentage of the monies already paid by the clients.  The amount to be returned would depend on each specific business and the services or products provided, as well as what point during the term of the contract the incident occurs (i.e. eight months before the wedding vs. one day before the wedding).  For some businesses, it may be the full fee that should be refunded, while others may be able to refund less (or nothing at all).

A quick note on indefinite or infinite incapacitation (i.e. coma or death) – morbid, I know, but some of you may be wondering what happens if you become comatose or pass away before performing all of the services specified in your contract.  Can your clients come after your estate or your family for repayment of your fees?  The answer is no if it is a contract for services to be performed by a specific individual, like a wedding planner, photographer or videographer.  In these types of contracts, coma or death would discharge the contract and its obligations.  If the contract is for something that does not require performance by a specific person, like furniture or photobooth rentals, the contract would probably stay in effect.

Confidentiality:

Most likely you do not have a confidentiality clause in your current client contract.  Typically relegated to non-disclosure agreements for employees and independent contractors, confidentiality clauses protect your business’ proprietary and confidential trade secrets.  Depending on the services or products you provide, your clients may be exposed to your business’ trade secrets while working with you. For example, wedding planners may give their clients the unique timelines, schematics and other planning documents they have developed over the years through hard work and fine-tuning of their techniques.  You may decide that the inclusion of a confidentiality clause is overkill for your client contract, but I urge you to consider the idea.  If your former client decides to become a wedding planner after her wedding, you may find your years of hard work serving as the basis for her new business.  Or a bride might decide to share these documents on a wedding planning forum for the benefit of her fellow brides-to-be.  In order for trade secrets to remain protected, you need to take proactive steps to ensure that confidential information actually remains confidential.  For a more extensive discussion of trade secrets and your business, you can read this post.

Thank you again to Kelly and Michelle for the opportunity to serve as a guest blogger on Sage Wedding Pros!  If you have any questions about these posts or other topics relating to your legal rights and responsibilities as wedding professionals, feel free to contact me at info – at – thelawforcreatives.com.

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Katy Carrier is the founder and principle of Carrier and Associates.  The company is a full-service law firm addressing the needs of event professionals and creative business owners.  We here at Sage Wedding Pros have had Katy advise on a few legal issues and we are very impressed with her knowledge, expertise, and professionalism.  Check out her blog, The Law for Creatives and keep up with everything law-related for your biz.

This week we are featuring a series of legal posts from Katy Carrier, founder of Carrier and Associates.  Learn about Katy and her firm at the end of this post.

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There is no such thing as a perfect, one-size-fits-all wedding client contract.  Every business is unique and has individual requirements, concerns and potential liabilities.  But there are certain clauses and terms that can help protect every wedding business from encountering potential problems down the line.

Deposits & Retainers:

Do you require a “non-refundable deposit” to book your services?  If you do, it’s time to update your contract, especially if you are a vendor who performs a large portion of your services on the day of the wedding.  In the eyes of the law, the term “deposit” is generally used to describe a first payment toward the performance of services.  So, if you fail to perform the service (like because the wedding is called off a few months before the big day), the deposit would need to be refunded.  It doesn’t matter whether you call it “non-refundable” – if a court finds that you didn’t actually earn the deposit payment, that money must be refunded to the clients.  The better alternative is to use the phrase “non-refundable retainer.”  Unlike deposits, retainer fees are used both to book services for a specific date, as well as toward expenses incurred after being retained by the clients.  Those expenses can include any work done before the actual wedding day, like consultations, meetings, planning and paperwork.

Counterparts:

A counterparts clause is typically a simple sentence stating that the parties to the contract are allowed to sign the contract on different copies or through different methods of transmission, like using an electronic signature, a fax or scanning and emailing the signature portion of the contract.  Under the counterparts clause, all of these different signatures and methods of transmission are considered to be part of one unified contract.

Arbitration:

Arbitration is a type of dispute resolution that is different from a lawsuit filed in a court.  Arbitration is much less formal and more private, and can be handled either with or without an attorney, and is generally much less expensive and time-consuming than courtroom litigation in front of a judge.  A single arbitrator or a panel of arbitrators is assigned to your dispute to listen to both sides and make a binding decision.

I believe that including an arbitration clause in your client contract is a smart decision.  You can allow for exceptions to a mandatory arbitration requirement, such as for unpaid fees owed by clients.  If a client owes you just $1,000, it would make more sense for you to sue them in small claims court to recover the unpaid fees, since the costs of arbitration would be greater than the small claims court filing fee.  But if a client sues you for breach of contract or personal injury, you’d be much better off going to arbitration rather than being subjected to a costly and time-consuming lawsuit.

Next up we’re going to cover some additional clauses that are important elements of your client contract.

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Katy Carrier is the founder and principle of Carrier and Associates.  The company is a full-service law firm addressing the needs of event professionals and creative business owners.  We here at Sage Wedding Pros have had Katy advise on a few legal issues and we are very impressed with her knowledge, expertise, and professionalism.  Check out her blog, The Law for Creatives and keep up with everything law-related for your biz.

This week we are featuring a series of legal posts from Katy Carrier, founder of Carrier and Associates.  Learn about Katy and her firm at the end of this post.

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I am honored and excited to serve as a guest blogger for Sage Wedding Pros this week!  I actually attended the very first Sage Wedding Pros The Simple Plan workshop in Seattle back in November 2009, and I am a huge fan of Michelle and Kelly’s amazing business insight and advice for wedding professionals.

We’re going to be discussing the topic of client contracts this week.  If you’re like most wedding industry professionals, you have a written client contract you use when booking new business.  If you don’t use a written contract, it’s time for a change!

You Need a Solid Contract

It doesn’t matter what type of vendor you are – everyone benefits from a written contract as evidence of a mutual agreement.  It’s fine to reach an agreement verbally, but in the event that you ever find yourself in a dispute you’ll be faced with a ‘he said, she said’ situation, and it’s very hard to prove the terms of an agreement when your only evidence is conversations that were not recorded, multiple email chains and scraps of paper with handwritten notes.  Once you reach a verbal agreement, those terms should be formalized in writing, and you should also include additional clauses that protect you and your business.  We’ll discuss specific clauses in the next post in this series, but I want to start by talking about important formalities of contract formation.  In addition to the value of a written contract, the way you handle the signing of a contract is also important.

BOTH the Bride and Groom Should Sign the Contract

If you are a wedding planner, photographer, videographer, caterer, venue, DJ, musician, florist, invitation designer, cake artist, rental company, lighting technician or transportation provider, you should have both the bride and groom sign your client contract.

I know if can be hard to nail down that bride or groom who is traveling constantly for work, or maybe you’re only dealing with one or the other so you think it makes sense to have that one person sign on behalf of the couple.  Don’t do it.

You need to remember that you are dealing with two separate and distinct people in the eyes of the law.  And you must consider that they may or may not even make it down the aisle, or may end up divorcing soon after the wedding.  You need to ensure that both the bride and groom understand the terms of the agreement and are ‘on the hook’ for all of those terms and conditions. That unpaid balance for your services?  They both need to be responsible for payment and subject to any applicable late penalties and interest.  How about a claim for personal injury by the groom?  If only the bride signed the agreement, a court may not hold the groom to the terms of the agreement that were supposed to protect you from certain liabilities, effectively leaving you wide-open to any kind of lawsuit and legal damages.

For certain contracts, like beauty services for just the bride or bridesmaids, it’s fine to have just the bride sign, but I really would only make an exception for those types of personal services contracts dealing with only one person from the couple.

How to get them BOTH to sign

So how do you get your contract signed by both the bride and groom when they are so hard to pin down?  To start, you need to make this a non-negotiable element from the beginning and inform the couple that they both need to read, understand and sign the contract.   You do not need to have everyone sign on the same piece of paper.  If you have a clause in your agreement dealing with counterparts, you can have each party to the contract sign a different copy of the contract and it will still be binding on everyone.  We’ll discuss the counterparts clause in my next post.

A great way to secure client signatures quickly and easily is by using an electronic signature service, like EchoSign or DocuSign.  Sage Wedding Pros just had a great post last week explaining EchoSign.  E-signatures may not be right for every client, but it is a great option for those clients that make signature-wrangling your full time job.

Whether you sign the contract on paper or electronically (or both), you need to maintain every copy that is signed by the parties, including yourself.  And you should keep a copy of all client contracts in your files even long after the wedding date has passed; you never know whether you’ll need it as evidence down the line in the event of some sort of dispute or issue.

In my next post we’ll cover some important language and clauses in your client contracts.

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Katy Carrier is the founder and principle of Carrier and Associates.  The company is a full-service law firm addressing the needs of event professionals and creative business owners.  We here at Sage Wedding Pros have had Katy advise on a few legal issues and we are very impressed with her knowledge, expertise, and professionalism.  Check out her blog, The Law for Creatives and keep up with everything law-related for your biz.

Get Contracts Signed Quickly

Echosign is an online tool that allows users to upload their contracts, email them to clients, and have them virtually signed.

What I LOVE about Echosign:

I’ve noticed I get contracts back much quicker by having clients sign them virtually instead of having them print, stick in an envelope, and snail-mail.  It also makes following up easier for me since I can easily send reminders.

I also love that I can prepare documents more quickly. I have a few template contracts that I don’t have to recreate each time.  (I’ve inserted a few fields that are updated with client info: name, date, etc.)

Another thing I love is that the contracts are filed online.  This has cut down on all of my printing, printing, printing and filing, filing, filing.

Limitations to Echosign:

You cannot customize contracts that were previously uploaded to the Echosign.  Once you upload your contract (in word, pdf, other) it is final.  (An “image” of your contract is created and you cannot ammend text.)  You can paste custom fields as mentioned above, but you cannot re-write entire sections.  If you have custom contracts, this tool is limited.  What I’ve learned to do is have my standard contract on here and then upload a separate “term sheet” for each client if there are specifics to the specific client.

The lowdown on Echosign:

Echosign is incredibly affordable at $14.95 / month and there is a free trial for your first 5 signatures.  You can find out more at www.echosign.com.