Episode 38: How to Protect Your Business Legally With Sarah Waldbuesser, Esq.

Do you know how to protect your business legally? Have you taken any steps to ensure that all the hard work you put into building your business isn't wasted? 

To build a business without a solid legal foundation is to ask for trouble. Luckily, protecting yourself is easy when you've got guidance! Today, Sarah Waldbuesser of Destination Legal will share the steps you need to take at each stage of business to ensure you're adequately protected.

We discuss:

1. The two biggest mistakes online business owners make regarding legally protecting their business.

2. The #1 thing you need on day one.

3. The gut-punch test and how and when to use it.

Connect with Sarah:

Website: https://destinationlegal.com

Download the Coaches Legal Checklist: https://get.destinationlegal.com/coaches-legal-checklist

LinkedIn: https://www.linkedin.com/in/sarah-waldbuesser

Facebook: https://www.facebook.com/destinationlegal

Instagram: https://www.instagram.com/destinationlegal

EPISODE TRANSCRIPT:

[01:05] Carmen Reed-Gilkison: Have you ever had anyone steal your information or use and copy your content? Or have you ever received a cease and desist letter? What would you do in that case? 

There are all kinds of things in the legal realm that can happen to us as business owners, and when we spend so much of our time and money building our businesses, they're like our babies, and we're supposed to build them to be sustainable and profitable. But if we aren't building them on a solid legal foundation, we're doing ourselves a lot of harm, and potentially we can ruin all the work we're putting in. 

So today, we're happy to bring to you the sound and sage advice of Sarah Waldbuesser from Destination Legal. Sarah is going to share with you how to protect your business legally, what are the main things you need, and then we go a little bit deeper into some other topics as to the stage of your business. So it gives you kind of a great overview of what you can be looking at now if you're a new business owner, or if you're a seasoned business owner, what you maybe should have in place that you don't. We hope you enjoy.

[02:26] Deirdre Harter: When you're a business owner, you need to concern yourself with all the details, the most important of which is arguably making sure you're protected legally. That's why we're very happy to bring you the expertise of our go-to legal eagle, Sarah Waldbuesser, founder of Destination Legal.

[02:48] Carmen Reed-Gilkison: Many years ago, Sarah and I were in the same program. I don't even remember what it was, but I know it was around 2016 or 2017, way back when. And since then, we've collaborated a couple of times on things, and above all else, I trust and value her expertise. So she's the person we turn to when we have legal questions or when our clients do. Sarah Waldbuesser, Esquire, is an attorney for coaches and online business owners. 

After several years at a law firm and a few career jumps, she ended up falling in love with online business and loves helping entrepreneurs achieve their dreams in a smart and protected way. Sarah is also a wife and mama, a traveler, and a food and wine lover. When not at her computer. She loves hanging with her kiddos, having wine with friends, flying around the globe, and connecting with other online business owners. 

Welcome, Sarah!

[03:39] Sarah Waldbuesser: Thank you so much for having me. Happy to be here today.

[03:43] Carmen Reed-Gilkison: We're excited to bring some of this legal talk because it's one of those things. Deirdre is a CPA, so it's funny; yesterday, during our live learning, she was talking about how account-speak is kind of right up there with going to the dentist or the DMV. And probably legal speak is the same.

[04:03] Sarah Waldbuesser: Unfortunately, it is, but I really try to make it a little bit easier and simpler. And even though similar to accounting, it's not the most fun, it's definitely one of the most important.

[04:16] Deirdre Harter: Yeah, and one of the things that we talked about, and I know you do this, Sarah, because we've worked with you, and I've seen how your website is put together, but we talk about speaking your client's language and connecting on an emotional level. And when we are professionals, and we've learned all the professional terms of everything, it's so important to be able to bring that down into layman's terms.

Like, not everybody has gone to school for all the things that we did, and it becomes kind of normal for us to talk that way. But then we have to remember that not everybody has our background and hasn't been exposed to all the things that we've been.

[04:51] Sarah Waldbuesser: Yeah, absolutely. It's kind of like when we go to dinner parties with real people in the real world and start talking about our businesses. Right?

[05:00] Carmen Reed-Gilkison: Exactly. Today we're going to be talking about protecting your online business. And I can't wait to dive into this because I kind of think that online seems less real, or it can seem less real, right? We're not in a physical brick-and-mortar place. It can seem less formal, but that doesn't mean we can become lax and forget about these things. And protecting our business is so important, as I'm sure you will attest.

[05:25] Sarah Waldbuesser: Yeah, absolutely. And I agree with you. In some ways, people do not take it as seriously until something goes wrong or until they need to. And it is very real. If there's a trademark infringement issue, the other person doesn't care if you're online or not, right? Like recently, one of my mentors won a $50,000 judgment against someone for defamation on Facebook. Completely online, right? So I think we do kind of have that feeling, and it's one of my jobs in life to make those of us working online understand that we actually are in the “real world,” too.

[06:08] Deirdre Harter: Yeah. So let's talk a little bit and start off with what do you think is the most important piece of the legal puzzle for business owners, specifically for online business owners? 

[06:21] Sarah Waldbuesser: Most of destination legal customers and clients are either coaches or service providers kind of working in that online one-on-one space. Whether they now have courses or programs or memberships, a lot of them start by working one-on-one. And the answer to this question is easy. It is contracts. 

Contracts are the number one most important thing that you need to legally protect your online business. The exact contract might differ. So if it's one-on-one services, then you are going to need a one-on-one coaching contract or one-on-one service provider contract. If you are strictly doing courses, then you need terms of purchase for your course or membership sites, group programs. So depending on what you're offering, the contract may change. But having one is for sure the most important thing.

[07:11] Carmen Reed-Gilkison: I love how you make that so easy. I love the templates. So we're, of course, going to put links in the show notes, but if anyone's looking for contracts, go there and don't do the thing that I see—and Sarah, you probably see too—in groups where someone's like, hey, do you have a contract? I need a contract for this client, can you share with me what yours is? That always makes me cringe.

[07:32] Sarah Waldbuesser: Oh my gosh, you and me both. It gives me high blood pressure for a number of reasons. One is that that's actually copyright infringement because sharing written pieces that potentially someone else wrote, whether it was a contract or an attorney or not, is risky. But also you don't know what's in that, you don't know who wrote it, you don't know if your business is the exact same as that person's business, you don't know if it has everything that you need or not. And so at that point, you're not going to be confident, you're not going to feel protected, and the whole point of having legal in place is so that you're empowered and more confident in your business.

[08:14] Deirdre Harter: And Sarah, can you talk a little bit about… I think everybody has this impression that it's one-size-fits-all, and if it's a contract for a coach and you're online, everybody can use the same thing. And I know that each business is different, but is there any difference when it comes to what state that you're operating in or incorporated in?

[08:33] Sarah Waldbuesser: So fortunately, in the US, Australia, Canada, the UK, we're all under common law. Contracts fall under common law, so they are 99% similar. Are we 100% sure that if you buy a template and you use it in Connecticut, it will be 100% the same in Florida? No, we can't be sure. But the chances of these tiny little nuances in the law are extremely rare. I've never heard of an instance where there was a contract issue because of some small state law, so you can feel really good about that. And, of course, if you purchase a template and you have any questions, you can always have a local lawyer look it over.

[09:15] Carmen Reed-Gilkison: I think that's great advice, and I think speaking back to what you talked about a minute ago, about people wanting to feel secure and confident and when they're borrowing someone else's template, and it's a false security if you're feeling secure with that. Because, just like you said, you don't know that you're covered by that contract. It's just like we talk a lot about looking at what other people are doing. Like, we, we’re big fans of doing market research and looking at our competition, but we can't look at the competition and copy them because we only see the tip of the iceberg; we don't see everything underneath. And the contract situation is the same, right? You're seeing this template, but you don't know what went into putting it together. So it, in fact, might not be giving you that security that you think it is.

[10:04] Sarah Waldbuesser: Absolutely. Because you don't know what you don't know, right? Chances are you didn't go to law school. You don't know what needs to be included. So you could actually be doing yourself more harm than good. I see contracts that have conflicting clauses in them, things that just don't make any sense. I can tell within half a second if it was pieced together or if an attorney drafted it. But that's because I've looked at thousands of contracts. And so this is one of those areas like accounting, and we are all in business because we are really good at something. When I go to… we've heard these things. I don't try to clean my own teeth, I don't fix my own toilet. I pay people who are the experts. And legal is definitely one of those areas that you don't want to mess with.

[10:52] Deirdre Harter: Yes, that is an excellent, excellent point. All right, so, yeah, legal is not DIY, for sure. Let's talk a little bit about is there different levels of business? Business owners start out. We like to say you don't need all the things to get going in your business. You need to have the most important things first, so for those people who are in those earlier stages. And then as they're growing, are there different things that they need to be looking at in the legal area?

[11:24] Sarah Waldbuesser: Absolutely. As we're building a business, I like to think of kind of legal as your foundation, and then you add to it as you grow, so that you're building a really strong business and you have the foundation to support you. So exactly when you're starting out, you don't need 85 contracts and five trademarks, right? 

I always say the absolutely only things you need to start a business are a way to get paid and a contract—that's day one. You don't need an email list, a website, all this fancy stuff. Those are the only two things that you need. And then, as you grow and your offers change and your need changes, your legal needs will change as well. So typically, you are going to have a website, your home - your online home, and that needs legal protection as well. So after you have your one-on-one contract in place, typically, the next step is to get your privacy policy, your website terms and disclaimers in place so that your website is fully protected. 

And then a few months later, a year later, you might add on a group program or an online course, or a mastermind. So at that point, you need to add on terms of purchase for those services and offerings. After that, maybe another six months, you might decide to host a live retreat. For that, you need a retreat contract because if you're doing anything in person, your risk of liability just doubles - triples from working online. And then, when you decide it's time to hire team members, you need to have a contract for independent contractors, service providers, so that you are onboarding people and doing all of that correctly. And then a couple of years down the road, you might have an affiliate program or be entering into some partnerships, and you need to have contracts in place for those. Anytime you are being paid or paying somebody, you want to make sure that you have those things in writing. 

And then, along the way is when you add in trademarks. So trademarks allow you to own your brand and own the name of your programs or signature course and things like that. You probably don't need that on day one, but after you've been in business for a couple of years and you are using the same names and programs time after time, you want to think about protecting them as well.

[13:40] Carmen Reed-Gilkison: That's such a great outline of how you just explained that. I think that makes a lot of sense. What would you say is the biggest mistake that you see online business owners make regarding legal?

[13:53] Sarah Waldbuesser: Two, really. And not surprisingly, the biggest is just not having a contract in place. Even to this day, I get emails and DMs at least weekly from people that running into some kind of issue with a client. And my first question is always, what does the contract say? And I'm still shocked by how many people tell me even that are paying tens of thousands of dollars don't have written contracts in place. So that for sure is the biggest mistake. Whether you are providing a service or getting a service, you want to make sure that you're signing a contract. 

The other is not taking trademarks seriously enough. And, by that I mean, sometimes people are like, well, I don't need a trademark. But they don't realize that other people are getting trademarks. And so they're branding themselves. They're investing thousands of dollars in branding and in building a program, and then they get a cease and desist email for trademark infringement because somebody else took the name that they've been using for three years, because they just didn't think it was a big deal. And so then they have to spend the time and money again to rebrand and come up with a new name. Whereas had they just kind of thought about that earlier? I've seen this happen a lot with people and their name, their podcast, or their signature course, and then when they realize the trademark has been taken, they're devastated because it's a major part of their business, and at that point, there's not a lot you can do. So I would say those are kind of the two big pieces.

[15:25] Carmen Reed-Gilkison: Destination Legal is a great place to go get templates for all those kinds of contracts. And I know that someone can hire you to do trademarking. Do you also work if someone needs to have legal consultation, do you provide that as well?

[15:47] Sarah Waldbuesser: Yeah, so it depends. I am always happy to jump on the phone and help someone work through what they need in consultation in that manner. Whether or not I'm the one providing the actual service really depends on what it is. As my business has got, I used to say yes to everything. I no longer do that, right? So if I'm doing one-on-one stuff, it's very on a limited basis. But if I can't help someone or don't want to help someone, then I always do my best to point them to a resource that can help them.

[16:19] Deirdre Harter: One last thing on Trademarks. And what I'm thinking about is you said that people don't think that they need one and all these kinds of things when it comes to legal. And I've noticed the same thing when it comes to accounting and the work that I did as a CPA. And now that I'm in the business coaching market, that people like to push that stuff off, right? Like they're buying all the other stuff, they're spending money on different things in their business, but it's like they're pushing off all the legal and the tax and all that kind of stuff and think, oh well, I'll get to that later. Or maybe they're thinking, oh, I'll do that when I'm bigger. So do you run into that? Is there like a mindset thing around that?

[17:04] Sarah Waldbuesser: Yeah, I run into that a lot. And then I get people that are pretty upset and mad at themselves for not taking it more seriously, especially around trademarks, because trademarks are actually a pretty emotional thing when you think about your business or your branding or your signature course or program, and you found a name that you love, right? And the thing about trademarking is it can be done on day one, or it can be done on day 1000. So the way I kind of tell people to think about it is I use something called the gut punch test. And so if you're thinking about your name or your Signature Course name or process, imagine that the next tomorrow you got an email cease and desist that you had to stop and rebrand within the next ten days. How would you feel? Are you like, oh my gosh, devastated? You feel that gut punch, like, mad at yourself for not trademarking sooner? Or are you just kind of like, oh, I don't mind, I'll just rebrand. That's a really easy way for people to figure out if it's time for them to trademark. But I would say yes. Not thinking about these things, thinking it's not going to happen to me, I'm never going to be that big, it doesn't matter, is just wrong. And legal is a mindset thing. We are all business owners, right? Even if you're brand new, if this is something that you want to build and you really believe in it, then you need to take it seriously and implement legal from the beginning. And as we said earlier, that doesn't mean everything. It just means start building your legal toolbox and keep adding things along the way. And what's great about legal, and I feel this way about accounting, once you have legal in place, once you know your numbers, these are things that actually bring you confidence and make you feel more empowered in your business.

[18:56] Carmen Reed-Gilkison: I agree 100%. And then talking about trademarking, I know that you offer trademark services, and I know that there's ways that people can DIY that. Can you kind of talk about the pros and cons? Is it risky, quote unquote, to DIY trademarking?

[19:15] Sarah Waldbuesser: It is. And there are statistics to support that. So if you have an attorney or destination legal, for example, you have an 85% to 90% chance of approval. If you try it yourself, that drops to 50% at most. And that's because there are some nuances that if you aren't an attorney or a trademark attorney, you're just not going to know. Right? There's 45 different classes of goods or services. You have to pick the right one and you have to use the right language, and then you have to include the right specimen. And USPTO comes back with a question, an office action that an attorney would know how to resolve very quickly. Well, a layperson sees that and gets scared, and then they just abandon it when actually you probably could have gotten it through. So I have so many people come to me that tried it themselves and messed up, or they tried legal zoom and had a nightmare experience. So it's one of these things that if it is an investment and if you're at that place in your business, then don't mess with it because it is a business asset. It is something that your business will own, that you could later sell or trade, and it is just one of those things that is worth investing in.

[20:30] Deirdre Harter: I love the parallel, Sarah, between what you're talking about with Legal and it's very similar when it comes to your finances is that people think that, oh, I don't have to worry about any of that until there's an audit or until they're getting a letter from the IRS, because I can't tell you how many times I've talked to people and they're like, I had no idea I was supposed to even do that. Or I didn't know I needed this kind of a number. I didn't know I was supposed to register for that. So it is the same thing and it's like, yeah, you can play the odds. That not a huge chance that it's going to happen to you, but there is a chance yet. We don't think twice about getting insurance, right?

We insure everything, our house and our cars and our health and everything else. And I think these things just go right along with it.

[21:13] Sarah Waldbuesser: Absolutely. Because the chances are that 99% of your clients are going to be amazing, but the 1% won't be. And with legal, it really and accounting to it's not a matter of if it's when there's going to be some sort of legal issue that pops up.

[21:31] Carmen Reed-Gilkison: Yeah, that's such a good point. We've talked about a lot of things that I think are really excellent advice, but if you could give one piece of advice to our listeners, what would that be?

[21:43] Sarah Waldbuesser: It would just be not to hide from the legal and there are a lot of resources out there these days. There are online attorneys that know the online industry and we try our best to make it easy for you. So I would say just don't hide from it. Put on your big girl or big boy pants and just get the things in your business that you need. And that's always starting with the contracts.

[22:07] Carmen Reed-Gilkison: That makes sense to me. I know that you have a free checklist for people called the Four must haves to legally protect your coaching business and I'm going to drop the link to that in our show notes for everybody. And I hope everyone first of all, I hope everyone is already legally protected. But if you're not, I hope that you consider checking out destination legal and the work that Sarah does because she makes it really simple and she is on our side is how I've always felt. And so I really appreciate that about you, Sarah, and we really appreciate you coming here and sharing your expertise with our audience.

[22:42] Sarah Waldbuesser: Well, thank you so much and I appreciate it as well because part of what I do is just try to spread the word and so I thank you for helping me do that.