2142 - Building Strong Agreements in Business Partnerships with Thomas Law PLC'S Margeaux Thomas

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1:05With us right now is Margo Thomas. Margo, you are the founder and the principal and an attorney with the Thomas Law Office in Fairfax County. Your website is thomaslawplc.com. Margo, it's great to have you. Thank you for having me. I'm really excited to be here today. Yeah. Well, and listen, this is fantastic because you work with a lot of business owners. I want to get to that in just a second. But I'd love to know, what have you been listening to music wise lately? Maybe over the past year, what have you been into lately? well i can say i'm much more of a reader than um music um but you know i'm you know i'm kind of old school um just old school r &b kind of person but um yeah you know i have a book club so i'm always trying to keep up with the books that are in the book club and we're reading a little bit of everything in there so well that sounds more interesting then tell me about for my bird tell me about what books you're reading well right now we're reading a book called the swimmers which is interesting because I am a competitive swimmer, but it's more about, you know, the meditative qualities of swimming.

2:18And, you know, there are different people who go to the pool every day and the reasons they do it and what they're trying to accomplish or, you know, how it just brings, you know, peace to their life. And I found a lot of that through swimming as well. So I can relate to a lot of the people's stories in the book. So it's pretty interesting. Oh my goodness. Did you happen to catch the movie, Daisy Ridley? it was in last year's called young woman in the sea no i haven't seen that oh oh you're going to love it so daisy or um uh the the woman um it's gertrude edderald uh and i might be i'm probably pronouncing her name incorrectly um it was really just kind of a sleeper movie like it didn't have a lot of fanfare in fact they created it for disney plus and then it tested so well that they they released it to the theater where we saw it.

3:08Gertrude Edderell changed sports for women across the world. Because as like most female athletes back in the day, just faced so much intense, you know, discrimination and oppression about her just wanting to do what she loved and what she was so gifted to add. She just overcame so many odds to swim, the first woman to swim the English Channel. And I might be off on my facts a little bit, but not only that, I mean, her time and everything was just absolutely incredible, but it is just such an inspiring movie for all people to watch about, you know, when for, you know, when up against, you know, these, these odds, and I'm sure that there's some really great books about, about, about Gertrude as well.

3:54So, and she, I thought I had seen all the swim movies. I have to go see that. Yeah, it's on streaming on Disney Plus, I'm pretty sure. But it's called Young Woman and the Sea. All right, well, Margo, let's talk about what you do. Tell me about what you do at the Thomas Law Forum. We represent business owners and we do what's called business divorces, or that's what we like to call it. And basically, we represent business owners who are in disputes with their partners, their clients, and their other partners, clients, and vendors. and we just help them work through that conflict. So I feel like it's an inevitable part of any business where you might have 99 great customers, but it's that last one where you have a money dispute or you're going through some type of partnership dispute with someone you know, like, and trust and went into business with.

4:45And the business has grown, you've become successful, but you're at a point where you can't continue down the same path with the other founder or the other founders for whatever reason. And, you know, we just help people navigate that hurdle. And I'm certain that you, in your experience, have probably seen, I think it's tempting for us to say, well, it's probably just a partner or client or business that's just being unscrupulous. They're being greedy, blah, blah, blah. It's not necessarily that. I mean, these are just things that can happen from exceptionally well-meaning and principled people.

5:21Absolutely. Every day. You know, for the business partnership disputes, a lot has to do with communication. And we call it business divorces because there's some overlap with regular divorces. I mean, you can both be great people and, you know, be very successful and be great parents, but, you know, have an inability to communicate on certain things or have different visions or goals or moving in different directions, whatever it may be. But unfortunately, a lot of the ones that we're involved in can get kind of messy. And, you know, people feel like, you know, the business is like their baby and, you know, it's hard to let go or move on or transition.

5:53and you know i call it the ikea effect you know when you build something yourself you know you feel like it's worth more than what some you know something you might have bought off the shelf so you know you have some oh yeah you're personally invested in the business so it's very hard um to to transition in that space yeah yeah well um so yeah obviously i think someone who's listening to us right now we we hope margo that they are not at the point where they need a business divorce or they're in the midst of something very messy. And I'm certain that you will probably appreciate this. Let's talk about preventative care, shall we?

6:33Can you take us through, before we talk about disputes with vendors and clients, let's talk about best practices so that we can avoid challenges down the road should there be a conflict in vision, for example. the easy the easy things we can talk about or to have an operating agreement or a shareholder agreement outlining what your stakes are how much money you put in how you know if you brought some equipment what that equipment is valued at you know a lot of people leave that either they don't have an agreement at all or they leave that part blank um another issue that comes up a lot is people bring in people well first of all people are like 50 50 owners and there's no one to break the deadlock.

7:20And that creates a lot of issues down the line. And people just assume they'll work out whatever the issues are. But it's, you know, generally a good rule of thumb for somebody to be the deadlock breaker, right? Somebody who has a little more authority to move past, you know, contentious decisions or, you know, things you can't agree upon. You know, another one we see a lot is people put things in their own name, because everybody's kind to, you know, I'll set up the website, I'll go to my GoDaddy account, and, you know, I'll put this two-factor authentication on my personal cell phone for all of these things that have to do with the business.

7:58And that can create a very sticky situation when you're not getting along with your business partner, and you're going your separate ways, and you can't access parts of the business because people have linked it to their personal devices and things like that. I mean, you wouldn't imagine how many preliminary injunction hearings we have about people not be able to access a website or a client portal or a customer list or, you know, people put all types of things on their personal Google Drive. And, you know, when things are going well, it's not an issue. But, you know, it really makes a lot of sense to make sure those things are in a central location that everybody can access versus having it on personal devices.

8:40Yeah, well, I agreed with that. So let's obviously I think the advice is going to be quite similar. is, you know, it's, and I wonder too, if some of us feel like it's almost like, you know, getting married and then saying, you know what, we need a prenuptial. And it's kind of like, oh, man, that feels weird. Aren't we getting married for love? It's not too dissimilar, right? Like, I think, you know, from a sales perspective, you know, maybe a salesperson might like, man, this seems just so aggressive to make my, you know, potential client here have to sign and agree to all this stuff here. And I'm afraid that I'm going to lose sales if I make them jump through too many hoops.

9:23Do you mind maybe addressing that emotion?

9:30Conversation to have on the front end, maybe in a marriage when we're talking about love, but from a business perspective, if you're going to invest hundreds of thousands of dollars and, you know, hundreds of hours of your time into something, I mean, I don't think it matters whether it's your brother, your cousin, your friend, you know, like, that's just a good idea to write down what our expectations are and what we're bringing into this and what happens if we want to get out. I mean, people, even in non-contentious relationships, they go through divorces, you know, people get injured, lots of things happen.

10:00And, you know, I don't think that's a difficult conversation to have on the front end when you're getting along. You know, what is going to happen if I want to sell my interest? I mean, that's just a big, good business conversation. I don't think that's offensive to people. You know, I think that's something I think people applaud, you know, their business partner asking those questions so that they can plan for the future. So, you know, I don't think it's like a prenup. You know, it's not like I want to keep what's mine. It's like, you know, what happens if, you know, you want to bring in three more partners and I want to get out?

10:31That's that doesn't have to be a bad thing. That can just be the natural transition of the business. But let's set up a framework now to make that easy if that comes up in the future. Yeah. Okay. Well, Margo, tell me a bit about what engagement with you looks like. Is it just like hiring a regular attorney? I mean, is it kind of the same experience? Who do you generally work with? I'm interested to learn a little bit more about your work with clients. So we have three different models that we engage clients with because, you know, typically the lawyer-client relationship is built on the hourly billable hour.

11:09And, you know, it's very difficult for entrepreneurs to go from having a bill that's$1 ,000 to$10 ,000 to who knows what next month, depending on how many hours an attorney spent on their case, because there's no planning in that. And the whole thing about entrepreneurship is to, you know, try to predict what's coming down the pike. So, you know, we do a lot of flat fee work for clients. We have done enough business conflicts and even just helping businesses scale and putting operational agreements together that we can predict what the cost of those things are going to be and how much time and effort is going to take on our end.

11:44So we have flat fee models and we also have a maintenance plan or subscription model so that businesses can pay a monthly fee and, you know, they can pick up the phone and call us whenever they need us and not be worried about, you know, the clock running and how much it's going to cost them on their next bill. So that's something that we're certainly trying to grow. We're certainly trying to grow it in the conflict space. There are a lot of, I wouldn't say a lot, but, you know, there's a growing trend and doing that in the transactional space. But, you know, I believe that in the conflict resolution space, there should also be a maintenance plan option.

12:18And, you know, we're just trying to grow that plan for people who, you know, so that you can pay a flat fee, a flat monthly fee throughout the course of your litigation. Yeah. Your website, Margo, is, and by the way, I am a fan of, you know, you want a dream team, you know, as much as you can afford that, right? And surround yourself with really smart people, make better decisions on the front end, don't make dumb mistakes. But, you know, it's, you know, it's paying attention to, hey, this is starting to look like it could potentially get messy and working with you early. So I agree with you, Margo.

13:05It's like, if, you know, if someone can, again, just put you or someone on a just a, you know, just a constant, you know, just a regular flat monthly concierge service, please do it. And I'm speaking as someone who's been, you know, in entrepreneurialism for over 30 years. I'm, you know, you can be the most ethical, honorable, values-driven, generous, kind leader in the world. You will still have legal problems because not everybody plays at your level. And it sucks. It's not fair. And the world sometimes is just, you know, don't make it just the way that it is. And so we always want to make sure that we're minding our P's and Q's, dotting our I's, crossing our T's and so forth.

13:50But Margo, your website, I wanted to point this out because you have some resources here. One in particular I think is kind of fun is you have a webcomic. I am so inspired. I want to do a webcomic. And by the way, if you add to our friend that's listening, go to Thomas Law PLC. scroll down to the bottom click on web comics so you can see exactly what i'm talking about i think this is just so clever it just makes it so fun uh to kind of get a visual representation of what you do um but within your resources as well margo can you maybe share some some things that our friend may be interested in in taking a peek at um yeah so there are a lot of free resources on our website and across social media.

14:35I personally do a ton of CLEs and seminars and webinars speaking about preventative ways to avoid conflict and a lot of negotiation tactics that I think, you know, can help any business owner, even in their, you know, sales, but, you know, dealing with getting people to move to your direction, to have empathy, to build connection. So there's a lot of resources on there about negotiation. And the webcomic is actually called The Negotiator. And I'm working on a book about negotiation, which is, you know, a tactic that we use. I mean, we do a lot of mediations. If we can resolve disputes through, you know, a neutral third party and, you know, everybody can buy into the resolution.

15:17We think that's a better resolution than, you know, a lot of cases going to trial. Business owners really don't, you know, want to bet the company on a trial of a jury of, you know, people they don't know. So the more that we can add certainty to that process and move them to a resolution that everybody can live with and put our clients in the best position, we do that. So there's a lot about the negotiation. There's a lot about mediation because we resolve a lot of disputes through that evidence. Yeah. ThomasLawPLC.com. Margo Thomas, again, founder, principal, and attorney with the Thomas Law Office, PLC.

15:54Margo, it's been a great conversation. Thank you so much for joining us. Thank you. I appreciate it.

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