Transcript of Navigating Small Business Legal Issues in the Digital World

Transcript of Navigating Small Business Legal Issues in the Digital World written by John Jantsch read more at Duct Tape Marketing

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John Jantsch: This episode of the Duct Tape Marketing Podcast is brought to you by Zephyr CMS. It’s a modern cloud based CMS system that’s licensed only to agencies. You can find them at zephyrcms.com, more about this later in the show.

John Jantsch: Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Jamie Lieberman. She is an entrepreneur, speaker, and practicing attorney, and founder of Hashtag Legal. We’re going to talk about legal stuff today. We’re not going to talk about marketing, but sometimes these things intersect.

John Jantsch: Jamie, thanks for joining me.

Jamie Lieberman: Thanks for having me.

John Jantsch: Let’s hear your story. How did you get here to being the founder and CEO of Hashtag Legal? I suspect there’s a journey.

Jamie Lieberman: Isn’t there always a journey?

John Jantsch: So true.

Jamie Lieberman: I’ve been a lawyer for about 15 years. The first half of my career was very traditional law practice, big law in New York City, federal government. It was everything you think it was, not being that positive.

Jamie Lieberman: About seven years ago, I decided I think it’s time for me to figure out another way to practice that fit more me, so I left my job and started freelancing to try and find my way. I had had seven or eight years of legal experience and felt comfortable enough to go out on my own but wasn’t quite sure what I wanted to do. At the same time, I myself was a blogger so many years ago. I had a blog about living in New York City when I was much years past, pre-kids, and it got really popular.

Jamie Lieberman: When I stopped working at the government, I started up a blog again because I thought it might be kind of fun. At that time about seven years ago, bloggers were starting to make a little bit of money. The word influencer didn’t even exist yet. I started working for a company that ran conferences for bloggers. They asked me, about six years ago, “Hey, do you think you may want to give a talk about legal issues for bloggers?” I thought, “Yeah. That’s kind of interesting. Now let me figure out what those are.” I did, and I gave the talk, and that’s actually where Hashtag Legal came from. I started working with bloggers, now influencers, and that quickly expanded into creatives and entrepreneurs, service professionals and marketers.

John Jantsch: Yeah, so I’m guessing the name Hashtag and then thrown together with Legal, there is a focus on the online world. Would that be accurate?

Jamie Lieberman: Yeah, definitely. We absolutely have a large number of clients who live and work in the online world.

John Jantsch: All right, so what’s unique about Hashtag Legal in terms of… We’ve talked a little bit about who you serve, but is there some way in which you serve them that is different than me going to the small law office down the street here?

Jamie Lieberman: Yeah, sure. We are also entrepreneurs and creatives and people who understand what it’s like to run that business. I often think many of my clients are what I call reluctant entrepreneurs. They’re really good at something, and legal usually isn’t what they’re interested in focusing on, so they kind of avoid it. Some people don’t avoid it, but they sort of don’t want to deal with it, and some people actively avoid it.

Jamie Lieberman: We try to make legal accessible and not scary by talking about it in plain language so that it is approachable, it’s easy. We are an all-female virtual law firm. We do that on purpose because, many of our clients, that’s how they are. We come to the clients and communicate with them as best as served for them versus most lawyers who communicate the way they want to communicate and don’t really think much about how comfortable or uncomfortable their client may feel with that mode of communication.

Jamie Lieberman: I got clients who are Slacking me and Messengering me and, yeah, they’re in my DMs. We move it to the proper channels, but I’m open to that. I like to give a lot of information, so we’re really transparent. We just like to work in a way that feels comfortable and more accessible than, say, your average lawyer who is oftentimes… Many of my clients have said they feel like they don’t even understand what they do let alone being able to advise them on how to protect and grow their businesses.

John Jantsch: I think a lot of people are used to hiring an attorney when something bad happens. They get sued, somebody doesn’t pay them, whatever those things are. Are there some things that you think that more small business owners, more entrepreneurs need to be thinking about, in terms of legal, and locking down just as a matter of course?

Jamie Lieberman: Absolutely. I actually think if more people did those company audits, had a really good lawyer as a partner in their business, that there’d be less non-paying clients and less fearful calls, so I think it’s really good to sit down.

Jamie Lieberman: Every business is different, but depending on what your business is… particularly, for example, if you’re a service professional, you live and die by your contract. I don’t mean the Frankenstein contract that you got from your friend who got from their friend who then pulled seven things offline or the template you bought. I mean a lawyer who actually sat down, understands what it is that you do, and created a contract that works for you, and that’s flexible, and that can move as you need to move because everybody’s business is different. Contracts are a big one.

Jamie Lieberman: Intellectual property, particularly if you are a creator or a creative, understanding what it means when you create for others or if you are putting information out into the universe, what that means in order to protect the information that you’re creating is important. That’s your intellectual property.

Jamie Lieberman: Also your trademarks, your names. A lot of people pick a cool name and then, couple years later, think, “Maybe I should look into this and see if I can use it or register it for a trademark,” and then somebody else has it or… There’s a million stories. Those are some good examples of ways that you can get around the, “Oh, my gosh,” scrambling phone call.

John Jantsch: Particularly since you talked about working with creatives, in a lot of cases, they just… A hug is a contract. Right? Again, I know I’m being facetious, but I mean contracts can actually not be very customer-friendly or not feel very-customer friendly. I mean how do you balance that? I mean the traditional law firm that you used to work for probably had contracts that were basically 100% one-sided to screw anybody who signed it. I mean, unfortunately, that’s reality. How do you balance the, hey, this is good for all of us?

Jamie Lieberman: I think that’s how all contracts actually should be written. I find it really frustrating and unnecessary when they are so one-sided for no reason. I read a lot of talent agreements or book deals. Book deals, ugh. It can be the bane of my existence, particularly for a first-time author, because they are often incredibly one-sided, and they don’t need to be.

Jamie Lieberman: I find that, when sitting down to talk to a business owner about their contract, I talk to them about, “What are your deal-breakers? What are the ones that you cannot give on?” We make those the ironclad… We’re not going to negotiate those, but there are some other clauses, to that particular business owner, that may be a little more flexible. Maybe we can make them a little bit, I’m not saying one-sided, but we may be able to negotiate them with clients who care about that particular position, or maybe we just make it straight down the road.

Jamie Lieberman: Contracts don’t have to be these awful documents that make you want to throw up when you have to look at them with two columns and font six, and it’s a single-spaced, and it’s 75 pages long. It’s overkill and unnecessary, and there’s no reason for it. We just try to create contracts that our clients understand and can read themselves and explain to their clients so that they understand why they have that clause. There’s no unnecessary language.

John Jantsch: Do you find that there are certain, I don’t know what we want to call them, but certain places where small business owners get tripped up, I don’t know, gotchas or something that come back and maybe bite the majority of people in the… that don’t address them. Are there certain things that you definitely ought to be a little worried about as a business owner?

Jamie Lieberman: That’s a great… You mean within the context of a contract? I-

John Jantsch: Not necessarily a contract, so just-

Jamie Lieberman: Oh, generally.

John Jantsch: Just legal in general.

Jamie Lieberman: Yeah, sure.

John Jantsch: What are the ones that, if you’re going to have trouble, here are some of the ways that [crosstalk 00:09:02]-

Jamie Lieberman: [crosstalk 00:09:02]. Non-paying clients is a big one. That’s a tough one. The scope of work is also a tough one. The TBDs that everyone likes to put into contracts and then nobody actually TBDs it, so they’re just vague. Revisions when you’re creating for somebody else. Those are the common ways that I see that there starts to be an issue.

Jamie Lieberman: Not having clear boundaries around termination. How do you terminate? What happens when a contract gets terminated? Because the fact is not every relationship is going to be perfect, and there may come a time where you either one-sidedly or mutually agree, “You know what? We just need to part ways. This isn’t a fit.” That’s okay. It’s business. It’s not personal. Having clearly written out guidelines for what that means in terms of ownership of work product and payments and refunds, that’s a big place that I see, a lot of ways, if it had been done well upfront, there would be nothing to argue about.

Jamie Lieberman: Partnership agreements is another one, partners that come together and don’t put agreements in place. Everybody’s really happy when a business starts, but when a business ends, it is probably the number-one most expensive thing that can happen in a business is when two partners split and can’t amicably resolve it. Those litigations can go on and on, and they are so expensive.

John Jantsch: I’ll tell you, in the online world, I would also say kind of the opposite. We were talking about a business owner protecting themselves in dealing with folks, but I can’t tell you how many ridiculous agreements I’ve seen that small business owners have signed for their website, which [crosstalk 00:10:44].

Jamie Lieberman: Oh, gosh, yes.

John Jantsch: It’s like, “No, we’re going to get a new…” It happens all the time because my company comes in and helps them fix their website, and then we learn that, “Nope, that company owns it. If you’re not going to pay us anymore, everything’s ours. You signed that deal.” It’s heartbreaking.

Jamie Lieberman: I’ve seen so many of these SEO companies that come in, and there are these hidden clauses that essentially give them an ownership piece even after termination. I’ve seen some crazy stuff in some of those contracts, and a lot of people don’t. In my opinion, it is so rare that you would actually ever sign the first draft of an agreement. There’s always a back and forth. There should be a negotiation. So many small business owners don’t feel like they have the power to do it, and so they don’t. I definitely agree. That’s a great point.

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John Jantsch:  We haven’t talked about employees. Again, I know you’re working with maybe a lot of solopreneurs, but so maybe if it’s even the virtual, part-time employee, where do you see employee issues coming up in the legal space?

Jamie Lieberman: It’s funny. We have clients that have as many as 80 employees and some as many as they’re just their own, so we see a wide range of employment issues. In this space, in particular, virtual workforces can get really complex the larger you become.

Jamie Lieberman: I have a client who has employees in, I’d say, 40 states, and so we’re navigating 40 different state laws for employment issues. That can be really challenging.

Jamie Lieberman: The other thing that really comes up in a lot of people, particularly now with California’s new law, is contractors versus employees, people who want to pay someone as a contractor when, in fact, they probably are an employee. I’ve seen clients rack up crazy fines from a state for a mischaracterized employee. That’s another issue.

Jamie Lieberman: Theft of clients, not having an employment agreement in place when you do, either a contractor or employee, to make sure that you don’t… It’s not a non-compete, because a lot of people think, “Oh, non-competes are not enforceable.” That, as a blanket rule, is actually not true. There are ways you can make, in certain states, enforceable non-competes. Where you can really protect yourself is non-solicitation clauses, meaning you can’t solicit my clients, you can’t solicit my employees, and you can’t solicit my contractors.

Jamie Lieberman: There’s ways that you can protect yourself. I think a lot of employees’ employers are either afraid to approach it because they don’t want to lose talent or they think they just can’t when, in fact, you can.

John Jantsch: All right, let’s get really geeky. Are you dealing with any GDPR and CCPA issues?

Jamie Lieberman: Privacy laws, my friend. Yes, we do a lot. We spent a ton of time on CCPA. I mean we still are.

John Jantsch: Maybe unpack that a little bit. There’s a lot of scary-sounding things about being… billion-dollar fines. Where is the typical small business who has a website, does email marketing to their clients. I mean where are they really exposed in that?

Jamie Lieberman: Really, you have to look at whether or not it even applies to you. That’s going to be looking at numbers. The 50,000 residents is usually… If you’re selling data, which some companies do, then there you go, but sale of data doesn’t necessarily have what you think of as a lay person. It means something different under CCPA. Digital ads are sale of data, and so if you run a website that creates content and has digital ads, then you are likely involved in the sale of data, so it is important to understand.

Jamie Lieberman: This is what I say about privacy in general. It terrifies people because there’s about 1,000 laws that could potentially apply. There’s no one law, right? When we have to pay our taxes, we go look at the tax code, but for privacy, there’s like 50 laws. Some of them may apply, some of them may not. States don’t agree with states, and California does everything first. Federal governments, they’re not involved. They have some stuff.

Jamie Lieberman: Really, my recommendation to every business owner who collects data of any kind… That is email addresses. That could be IP addresses. That can be the heat map that’s on your website if you’re using certain plugins, if you have lead pages, for example, things like that. Do an audit. Sit down and look at the back end of your site and really understand what every single plugin and provider is doing, and what data they’re collecting, and what permission you’ve given, because as the website owner, as the business as defined under CCPA, it’s your responsibility to tell your users what data you’re collecting, if you’re selling it, and what you’re doing with it. That’s not a bad thing to know that about your business.

John Jantsch: Yeah. The first thing you need to do is breathe, though. Right? There…

Jamie Lieberman: Yeah, take breaths. There should never be panic. There really shouldn’t. Everybody freaks out. I’m like, “No, just take a breath. You’re going to spend two hours. You’re going to time block on your calendar. You’re going to take two hours. You’re going to look at your plugins,” or find someone who’s a good privacy lawyer and have them do it for you.

John Jantsch: There’s a whole subset of just privacy technology people that understand what is happening when your website [inaudible 00:16:53]. That can be another place to look.

John Jantsch: I remember when GDPR had this deadline. I mean people were like [inaudible] sleep. Like you said, I’m glad you said that first. In a lot of cases, it didn’t really apply to them that much.

John Jantsch: All right, let’s end up with I have some podcasts listeners, and I suspect that there probably are some legal issues that podcasters, little old people like myself, should be thinking about. What are those, in your estimation, that apply to podcasters?

Jamie Lieberman: Podcasters have the same… Naming is a big one in the podcast world, whether or not you’re going to, one, pick a name that you can use or, two, you want to trademark protect that name.

Jamie Lieberman: Releases from your guests. If you ever want to repurpose the content that you’ve created, getting a release from your guests when they join is much easier than having to go back to them and say, “Hey, I’m writing this book, and I want to include you.” That’s often a place that podcasters overlook. I do a lot of podcasts, and most people don’t ask for them. It’s fine, but sometimes they come back and they’re like, “Can I use that?” Then they have to go down the route. It is helpful to have releases from your podcast guests.

John Jantsch: Yeah, which, on that note, if you’re going to try to use it in a book and you have a mainstream publisher, they’re going to ask for it anyway, so get it ahead of time. Fortunately, I work in the marketing world, and all the people I talk to are thrilled if I write about them, and so it’s like it’s usually-

Jamie Lieberman: Right, exactly.

John Jantsch: But, but-

Jamie Lieberman: But not everybody-

John Jantsch: But not everybody is.

Jamie Lieberman: … has a marketing podcast. Music is a big one, a really big one, and use of just anything of someone else’s. When in doubt, get permission. Make sure you have a license. Make sure the license that you have allows you to use whatever it is that you’re using of someone else’s in the way you want to use it.

John Jantsch: Yeah. I wasn’t going to ask this, but you just reminded me of the stock photo sites-

Jamie Lieberman: Ah, yes.

John Jantsch: … that decided that they couldn’t sell photos anymore, so they were going to go extract fines. If you get that, “Oh, gosh. There’s a picture from some stock photo site on my website, and they’re telling me I owe $700,” what do I do with that?

Jamie Lieberman: There’s a few things that you can do. One, you want to investigate whether or not the company that is sending you this letter has a copyright registration. If they have a registered copyright and you used the photo without permission or you used the photo without a license in some way, then you may be on the hook.

Jamie Lieberman: However, my recommendation is, anybody who downloads images, just save the license next to the image in a folder. That way, if someone comes back to you a couple years later, you can say, “Oh, I downloaded it, and here’s the license that I had when I downloaded it.” Then, if you have that proper license, they’ll go away. If you don’t have a license, if you took it from somebody’s website because, five years ago, you didn’t know any better, you may have to pay a fine. Try to negotiate, though. You don’t have to pay the first thing.

Jamie Lieberman: Most places like [Picsy] and a lot of those places, they’ll negotiate down with you. They aim high expecting you’re going to pay less, but if they have a valid copyright registration, if you’re infringing on it, there’s not much you can do. It doesn’t matter how many people saw it, if you made money off of it. There’s pretty strict liability when it comes to copyright infringement, so don’t do it.

John Jantsch: Well, totally. I think it’s really more the people that get that surprise letter. I’ve seen 10… No. I think the highest I’ve seen is somebody wanted like $1,500 when you could go license that same image for eternity for $4 on the site.

Jamie Lieberman: I’ve seen six figures.

John Jantsch: Oh, wow. Yeah. There, again, I think that’s one. I mean I may be wrong, but it looked to me like they weren’t really trying to protect their copyrights so much because those pictures really had no value anymore. They really were just trying to extract a new revenue stream, but again-

Jamie Lieberman: Yeah. There’s many websites that do that. I think that, from a policy perspective, copyright laws, the way that it is for a reason, but it also allows people to exploit it. That stinks, honestly. Sometimes I get these letters and it’s just… There’s photographers that do this for a living. They take a lot of photographs, they batch register them, and then they put them up, and then they do reverse Google searches. They have lawyers who are on contingency who just send letters and letters and letters and letters.

Jamie Lieberman: We came across one. They ask for a minimum of $10,000 if not more, and the lawyer doesn’t care. He’ll file lawsuits. They’ll go, and they’re very difficult to deal with and very hard to negotiate with. It’s unfortunate, and it’s true.

John Jantsch: Sorry I took us down that rabbit hole. Let’s end on a happy note, shall we? Tell people where they can find out more about Hashtag Legal and the work that you’re doing, Jamie.

Jamie Lieberman: Sure. Our website’s hashtag-legal.com. I also have a podcast. My podcast is The FearLess Business Podcast. We talk about all the stuff everyone’s afraid of in their business but shouldn’t be. We try to make it easy and accessible. We’re on Instagram, hashtag_legal. You can contact me directly. Jamie is J-A-M-I-E@hashtag-legal.com.

John Jantsch: Awesome. I appreciate you stopping by and, hopefully, we’ll run into you someday out there on the road.

Jamie Lieberman: Thanks.

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