This month I had the privilege of speaking with hundreds of (largely female) entrepreneurs in Sophia Amoruso’s Business Class. For me it was a great reminder of the challenges entrepreneurs face when it comes to legal, and how we can make it easier for them.
Lawyers are like auto mechanics. They make everything sound so complicated that by the end of the conversation you think you have to do what they say because, well, what do you know? I don’t know anything about cars (that’s my mom’s department), but I can tell you that, for the most part, the law is not that complicated. If someone is making it sound complicated, it’s probably because they aren’t explaining it very well or they don’t understand it well themselves (or, rarely, because it really is just that complicated). Push back. Ask questions. If the person across from you makes you feel like an idiot for asking, it’s not a match. In my experience, women experience this feeling all the time. It’s how people make sure we don’t get too big for our britches. Ha! What a stupid question! [looks to bros on either side; high five!]. You know what’s stupid? Not asking questions.
This is not a box-checking exercise. There aren’t too many people out there (even ones with law degrees) who are particularly excited by the prospect of creating an LLC, reviewing financing contracts, or drafting corporate bylaws (I mean, I love bylaws, but I’m that kind of weirdo). Because of this, many entrepreneurs outsource this work...in its entirety. They hand the project off and wash their hands of it. I need bylaws stating how my company is going to be run? Great! I can download those and put my name on them. Check! Sure, but remember that these documents have real meaning. These documents contain the rules for your company. Not understanding what is in them, and taking ownership over what is in them, is essentially like living in a city and not bothering to understand the laws. Things may be fine for a while, but eventually something is going to go wrong and then you’re, well, not in a good place.
You have to prioritize. Would it be ideal to have a lawyer come in from the very beginning, thoughtfully discuss every aspect of your business with you, research all the potential regulatory hurdles, prepare a detailed analysis of the trademarkability of every name you’re considering, and then handle all your legal needs? Yes! But the reality is most entrepreneurs are not sitting on a pile of cash. When it comes to budget, they need to prioritize. What that means for legal is that there is a very real tradeoff between budget and risk. If you spend more on legal, you will de-risk your company. If you spend less on legal, you have greater risk exposure. In the early stages of building a business, you’re going to have to accept those tradeoffs. If you have a very limited budget, think long and hard about whether that money is better spent on lawyers or on product development, hiring, or paying rent. You know you can create an LLC or a Corporation yourself, right? Lawyers are not required.
Read your documents (particularly if you’re on a budget). Really, everyone should read their documents. I can’t tell you how often I’m listening to a founder podcast and the founder talks about how they ended up in a bad situation because they didn’t understand their own documents. Are legal documents tedious to read? Yes. But anyone who knows how to read can understand 95% of what is in most legal documents. Of course, reading a contract with 172 subsections is much less fun than working on product strategy or reviewing mockups of your new packaging, but it is arguably even more important. If you don’t know what your own corporate documents or contracts say, I’m not trying to shame you. But read them. Set aside some uninterrupted time and read them.
I love the USPTO. It may be the only government entity I would say that about. Wait, them and the New York City Department of Parks & Rec (those beautiful flower beds really lifted me up when the city was in the deep throes of COVID). The USPTO is awesome. Why? Because they put out these fantastic, detailed, easy-to-understand, and completely free videos about how the trademark process works. They walk you through it step-by-step. Admittedly, the search functions could be a little better, but nobody’s perfect. Watch the videos, do the searching, and then pick a name without any issues. There is no one perfect name, so why not pick one with a clear path toward registration (and away from infringing on someone else’s mark).
Be yourselves. This one I learned from one of the other speakers, Laura Huang of Harvard Business School. You are constantly told to “be yourself,” but you are multi-faceted. You don’t have to be one way or version of yourself all the time. Be strong, be loud, be quiet, be subtle, be all your things.
Thank you again to Sophia and the incredible Business Class team for trusting me with your students, to Linda Honan for introducing me to you, and to all of the Business Class students for the wonderful feedback and for making me feel like the knowledge I have really is useful.
P.S. I’m going to start adding a Resources list to the end of these posts in case there's anything in there you'd like to learn more about.