1662 – Do’s and Don’ts With Hiring An Attorney with Motiva Business Law’s Danya Shakfeh

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0:58with us right now dania shakfei dania you are the you're an attorney and you are the founder of motiva business law you're found on the web at motiva law.com dania thank you so much for joining us thank you for having me i love well one thing i was reading uh you help entrepreneurs stay out of court so they can focus on their businesses. Tell us more. I love that. So you got my attention. Tell us more about the work that you do and the impact you have in the world. Sure. So I used to actually do more court-related activities and pick some litigation. But I found that once business owners are in court, it's so draining and expensive.

1:42And sometimes, actually often had those business owners taken some simple steps to get certain things in order when they started their business, they would have not ended up in court. So things like, you know, having a proper operating agreement for their LLCs or proper contracts in place, it would have saved them a lot of headache. So I decided to transition my practice to more transactional practice because I thought I could bring more value to my clients to keep them out of court. So, I mean, for example, drafting up, you know, a semi-complicated contract might cost like four or five or maybe$6 ,000 depending on, you know, the nature of the contract and the business.

2:29But if you're in court, you could easily spend 20, 30, 40 or more, you know, it's just endless. And, and of course that's not including the headache and the stress and the potential loss of the actual business because sometimes it will, because these lawsuits will actually drug their business into the ground. And so for that reason, so hence my slogan to keep people out of court. So I'm going to ask you a silly question here, but isn't legal exposure really just a risk for larger companies or for brick and mortar companies? No, absolutely not. It could even happen with smaller businesses, for sure.

3:12I mean, it's really not the size of the business, but who they interact with, and sometimes the industry that they're in. And often the disputes relate more to, or excuse me, like between the actual business owners. So that could be something like a simple startup. Also, intellectual property, it's not a tangible good, but it has value. So you could have a startup or a smaller business where someone trademarked a brand and they started to build on it. And then when the owner of that trademark is not clear, that also creates some liability for the owners and disputes. So share just a bit about your practice.

3:54So you practice law, obviously in Illinois, where you're based or outside of Chicago. And then as well, you originally have connections to Florida. So you're also licensed here. But I know that you've got resources and you provide guidance and so forth nationally. Can you maybe talk about the scope of your work? Right. So I focus on, well, I think my favorite area of practice is mergers and acquisitions, helping business owners buy businesses in particular. You know, they're often very motivated. They usually have some funding already and they kind of have an eye on growth from the beginning. So I really like that practice area.

4:33Also, corporate startup. And what I really like about startups for certain kinds of entrepreneurs in particular is they usually have a unique vision and they want to see that come to light. And so I help them create their operating agreements, their corporate documents and their contracts. And I actually even give guidance also on the business side as well. So part of my conversations with those types of clients is to make sure that they're profitable, that their business is sustainable, and that it adds value to their clients. And also franchises, which, you know, along the same lines, particularly the franchisees, I review those documents for them to make sure that they're in a safe place when they enter these contracts.

5:20So, yeah. You know, certainly I think something that applies to nearly every business owner, you know, would be, let me ask you this question rather than presupposing anything. You know, what would be, you know, maybe some legal topics that cover probably 90 plus percent of companies? Of course, I'm thinking of like entity type stuff or, you know, if you're going to have any kind of employee or contractor relationship, those are two immediately that come to mind. Are there any that is like, listen, this is a do not pass go kind of thing. You're going to bump up against this. And, you know, it's probably wise that you're working with someone who understands the law when it comes to these things.

6:05Yeah. So in addition to employment and the internal stuff, I would say legal compliance, particularly on the industry. So if a certain license is required to run the business, a lot of business owners don't realize that they have to get certain licenses. Taxes also is a big issue, especially when it comes to when people buy businesses. They don't realize that when the assets transfer from the seller to a buyer, the tax liability can actually attach to the assets that are being transferred. So there are certain, you know, hoops that you want to jump through to make sure that when you buy a business, you're not incurring those tax liabilities.

6:46So those are probably two of the other main areas that I see. And also just like not just really from a business perspective. Also, when they a lot of my clients are too quick, you know, in the sales process or too quick to sign contracts and they start investing money and time into a relationship that has where the terms are not completely flushed out. And so they start, you know, you know, fighting about certain things, but they've already started the relationship, even though they didn't sign the contract. So it's really hard to like negotiate that contract when they're, or excuse me, like when everyone's already invested.

7:21So I think those are the, some of the issues that I see as well. Yeah. As a small business owner, I know sometimes it can be pretty challenging or, you know, when it comes to hiring, you know, a legal professional hiring attorney to help with this. Are there any maybe any guidance that you'd recommend of like maybe either things to look for or things maybe that might be red flags or like, yeah, that's if you're hearing this, this and this, I'd probably steer you in a different direction. Sure. Keep shopping, so to speak. Any guidance on hiring an attorney? That's a great question. Obviously, talking to people who already have experience with their own lawyers is a great way to start.

8:02But if you're not sure where to go from there, an attorney that has too many practice areas is something that I kind of warn people about. You don't want, because if it's one attorney doing too many things, you kind of wonder how deep they've gone into each practice area. So that's one thing that I'd look for. to, you know, see if they have like a YouTube channel or if they offer any free resources, you know, guides, templates, checklists, those sorts of things you can get, like you can get a feel for the kinds of offerings that they have. And also check out Google reviews. See, of course, perhaps those are not always so accurate, but, you know, like it gives some insight.

8:43So those are probably some of the same ways. And then, of course, just talk to the lawyer. And honestly, like, it's fine if you pay for the consultation too. I know sometimes people like to talk to multiple lawyers. The reality is if you want to sit with an attorney and really pick their brain, it's worth to pay a couple hundred bucks to really speak in more detail because like some of those free consultations are really cursory. And sometimes the free consultations are not even with an attorney. So if you're really serious about hiring a high caliber lawyer, I would, you know, make that investment as well.

9:15Yeah, that makes sense. But again, you're talking about a couple few hundred dollars per conversation, and that's going to give you a much better flavor for it. So it helps you make a much better decision on that. That's a good tip. I hadn't heard that before. What are there any trends that you have seen over maybe the past few years when it comes to that intersection between SMBs and law? Are there any things that are becoming a bigger issue or things that you think are, you know, again, maybe a bigger concern that business leaders and owners should be aware of that seems to be becoming more of a thing?

9:55I'm not sure. I can't think of any trends, per se, that have increased in the past few years. But I will say in general, just small business owners really should take the time to understand the legal intricacies of their business goals. So I have a lot of people, for example, I would say, okay, here's one, like dropshipping and like online businesses. Like dropshipping was really big a few years ago, and people would go on like websites like Walmart or Amazon. But now, you know, these big retailers are no longer or like they want their resellers to have their own inventory. And so like dropshipping is not really something that you can really do anymore.

10:48So I have still, you know, people coming to me, you know, with this vision of being able to have this type of business model and it wouldn't really work out anymore. And so they're too quick to hire providers that offer those services without actually reading the terms of like Amazon or Walmart or, you know, and what have you. So I think generally speaking, whenever you have like a business idea, you know, like run it by an attorney to make sure that whoever the small business owner is dealing with, it's kosher, you know, and in line with the policies and laws of those third parties. As of when we're recording this, Dania, I see that you put on events frequently.

11:31One of them is how to buy a business. And oh, by the way, are these events, are they in person or do you also provide this content online? Both, actually. So I actually, you know, I try to do Zoom, but like lately, I think people have really been appreciating the in-person events. I think especially after COVID, right? People are kind of sick. They're kind of over Zoom. So I am offering free monthly courses that are in person for people who want to come in. But I have also done a ton online. And I also have a pretty fast YouTube channel where I talk about, you know, like the issues that, you know, small business owners deal with.

12:12Yeah. And so one that you have coming up, how to buy a business. Is it someone who's never been through that process? What are some of the big, like you're thinking about your presentation. I don't know if there's kind of main topics as a result to that, but anything that stands out, you're like, oh yeah. listen if there's one thing you don't forget when it comes to buying a business it would be you know this and this anything come to mind yeah the first the biggest thing is okay um the number of people who call my office and say hey i want to buy a business and they um and closing is tomorrow and i'm like uh can you review the contract i'm like whoa whoa you skipped so many steps like due diligence and you're like what's due diligence i'm like hold on let's let's and And, you know, minding these people, they're not necessarily, I mean, for a lot of people, they're not, it's not a small chunk of change that they're spending on these businesses.

13:11We're still talking about$80 ,000,$90 ,000, which for some, you know, business owners is not too much money, but for like your average person, it's like, you know, it could be someone's life savings. And so I think that, so yeah, I mean, first and foremost, have an attorney come in earlier. So at least, you know, to do it properly. Um, the second thing I would say is to, um, make sure that if there are any third parties that are involved in the business, that they are also signing on to the transfer of the business, for example, like a landlord, or if there's a franchise involved, um, you know, unfortunately I see that too often where people just like, they have a right to just transfer everything to somebody else.

13:51When in reality, they can't, that buyer ends up not having the full value of the business because these third parties are like, wait a minute, we didn't consent to this. new owner of the business. So those are probably the two biggest issues that I run into. Yeah. In addition, we were kind of talking about, you know, the workshops. What are the resources or, you know, for someone that's listening to our conversation and, you know, they're interested in maybe learning more or, you know, again, kind of tapping into resources that you've made available, anything come to mind that would be worth taking a look at?

14:22Yeah. So on my website, again, there's my YouTube channel. Typically, if someone were to just send me an email, I do offer guides. I have the ultimate guide to buying a business. It's a PDF. It just breaks down the steps of buying a business and includes a due diligence checklist. I also offer like a business plan cheat sheet. It's not a legal document, but it's just like kind of the backbones of creating a business plan. Only like I think 33 % of business owners have a written business plan. And if you have a written business plan, you actually increase your chances of having a successful business because you put those goals in place, you kind of understand your profit margins.

15:02You know, like I said, or like before, I really like to set up my clients for actual business success, not just like here's a legal template and then send them on their way. So I also have like a guide on starting businesses. And these are all often on my blog, or if you just like do a search, you know, like it come up, but if anybody wants those resources, they can also send me an email to my office and we'll be happy to just pass those out. And then of course, once anyone books a consultation, I have like a drip campaign where I just, you know, give free resources and tips, you know, as a speeding up to the consultation itself.

15:38So it's going over some of your content and one of the videos you have that I'm actually quite curious about. And again, I don't expect you to remember what you said in the video, but the title of it is how to assess risk in business. Any maybe high level pieces of advice or recommendations you'd make if, again, we want to look at, well, where might we find risk or what is that level of risk, you know, either within our business or might be maybe a business that we're looking to acquire? Right. So that's a great question. So when parties are negotiating, it's a really good opportunity for one or the other party to kind of feel out the other side and their trust level.

16:20So for example, if one party says, you know, we don't need to put this in writing, this deal is like just a handshake. That's obviously a red flag. You know, if someone doesn't want a paper trail. Also, if a document, excuse me, if a contract is presented to you, you want to look at the covenants and the warranties. And these are like contract terms for basically the promises and the representations that the counterparty is giving you. And if they're, and so if, so it's really important to like review those because it would give you as a business owner, an opportunity to see what kinds of rights you may be waiving.

17:01And you want to know why you would be waiving those rights. Or if a party refuses to explain, you know, like the condition or the status of certain, you know, assets, For example, in writing, then that's also a risk. So I just go over how a negotiation can show the risk in a business, like the actual process of negotiating. Yeah. Dania Shackfey, again, attorney and founder of Motiva Business Law. Your website was motivalaw.com. That's M-O-T-I-V-A law.com. Of course, you're a podcast listener. Got that all linked up in your episode. Just click on show notes and we'll find a direct link right there.

17:49And again, Dania, when somebody goes to your website, what would you recommend they click on? What should they do next? Well, they can schedule a consultation. Most people just call us. So our number is 630-517-5529. And then we also have a contact form as well that someone can just shoot us so that we can call them back if they prefer to go that route. Yeah. Excellent. Well, Dania, thank you so much for joining us. I really appreciate our conversation. Thank you for having me. Yeah, of course. Thank you for the opportunity.

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