So it’s 2022. A new year, new plans, new resolutions. One thing you may not have thought about is lawyering up. Why? Because we deal with all kinds of legal-related issues where we may not have even thought about getting legal help to protect ourselves. But why not? Instead of being screwed, we should lawyer up and fight for what’s ours. Here are some ideas.
1. Wills & trust
While thinking about death sounds depressing, shit happens, and we’d better be prepared. What would happen to your assets and loved ones if something were to happen to you? This year, don’t procrastinate any further; get a lawyer, get a will or trust done. This way, you can rest assured that the people you may leave behind are taken care of. Also, think about your affairs if you were, say, on a life machine? Do you want to be kept alive that way, or do you want other choices? Again, that is depressing to think about yet extremely important to make arrangements for.
2. Proper lease for landlords/tenants
Property management companies charge a lot of money, thus wiping out your already not-so-thin margin, so many landlords choose to manage their property themselves. However, do you have a proper lease in place? Don’t just copy templates from the internet. Are you holding enough deposit to account for contingencies, such as if the tenants damage your property? What about move-out arrangements if you have to sell the property? Do you have a list of the items provided to the tenants that you need to get back undamaged? To avoid getting yourself in a bad position, consult a lawyer to make sure you protect your own rights.
On the flip side, many tenants sign the lease as is and forget to even mark any damages that may already exist on the property. Also, watch out for stringent conditions for the return of your deposit. Finally, know your rights and protect yourself in case the landlords want you to leave arbitrarily with short notice. All of this can be avoided if you consult a lawyer to review your lease.
3. The not-so-happy case for a pre/postnup
If this year you are getting married, congrats! While that’s the happiest thing in life, don’t forget about protecting yourself. If you have substantial assets and/or children before this marriage, consult a lawyer to make sure your assets are protected and your children are getting what they deserve. Well, even if you already did get married, did you know that you can still protect your hard-earned assets post-marriage? It’s called a “postnup,” and the idea is similar. While negotiating with your future or current spouse isn’t necessarily the most enjoyable thing, we are just planning for the worst in the rare case scenario when bad things do happen. Especially if you are expecting a large amount of vesting stock that you have earned prior to marriage, you’ll thank yourself later for taking the extra step.
4. Should I incorporate?
Even if you have a small business or are just starting your startup, getting a proper entity is a key to protecting your personal assets. Once you set up an LLC or a corporation (see our explanation about which entity to choose from here), now the business is operating under its own entity, and you are shielded from any liability or damages. You may say, come on, I just have a truck, and I run the business myself. You’ll be shocked to learn how many people get sued personally if the trunk causes any damages to others. Consult a lawyer and set up your business structure properly; this will save you a lot of headaches and money down the road.
5. Employers and Employees
To have a property agreement in place with your contractors and employees is extremely important to protect yourself. For example, you will need to ensure they don’t steal your IP, know-how, trade secret, or go out and find a competing business with you. As you grow larger, you will need to have an employee manual and processes in place to protect your business from things such as works comp, harassment, discrimination, hiring and firing process, etc. Any of this goes wrong, and you get set back for a long time. The best thing to do is to consult an employment lawyer that represents employers.
Typically most employees sign their employment paperwork as is. However, there are things that you may want to lawyer up.
What are your equity rights? Does it contain a cliff? How about vesting? Do you need to exercise your options within a certain timeframe after you leave this company? How much do you pay per option?
Do you have the right documentation to disclose your prior IP ownership before you join the company? It’s important to keep it straight so that there is no mix-up of who invented what.
Do you have a sign-on bonus? If so, are there any claw-back provisions for it? Are they fair? A sign-on bonus is intended to motivate the employee to stay for a significant period of time. However, overly long (e.g., three years) claw-back provisions can be very onerous and limit your ability to leave if things don’t work out.
Are there other restrictions about non-solicitation, non-compete (illegal in some states), or any other restrictions such as not talking to company customers or suppliers after you leave?
6. All the other contracts and stuff in your life
Outside of the topics above, each of us enters into numerous contracts and deals with various people in our lives: our architect, contractor for that remodeling project, and hiring a person to help promote your website. Do you just sign what they give you? Do you know that if you pay them all the money upfront, oftentimes, you are left with no resources even if they do a crappy job? Not to mention they can drag out the project forever if the deliverables are not properly defined. Consult a lawyer who can advise you on how to structure the payment to align incentives, describe exactly what they need to do by when, and clearly indicate what’s considered acceptable or unacceptable. You may think this is overdoing it, but have you had people who charge you a lot of money but once and again either fail to deliver or come up with bad results? This way, you can avoid this fight altogether because everything is laid out crystal clear ahead of time.
Here at Trusli, we are here to help you get the right kind of lawyers who don’t break the bank. Lawyer up and protect yourself, don’t get screwed!