Here’s what we’ll cover
When it comes to protecting yourself, your business and your business bank account business contracts and IP are an unsexy but crucial part of running a business. So we are talking to Riz McDonald from Foundd Legal about all things contracts and all things IP.
Riz McDonald is giving us her thoughts on what we need to be doing, asking and thinking when it comes to protecting ourselves with contracts and IP. Riz shares some of the real life horror stories that can happen when we don’t take care of the legal side of our business.
While contracts and IP are things that we can always ‘put off until tomorrow’ Riz McDonald explains to us that it doesn’t need to be hard, it doesn’t need to be overly expensive but it does give us the protection we deserve.
Links and Resources
- Checkout the Simply Smarter Numbers website HERE
- Checkout the Podcast HERE
- Checkout the Instagram page HERE
- Checkout Riz’s Website HERE
- Checkout Riz’s Instagram HERE
- Checkout Foundd Legal HERE
- Checkout the Foundd Legal Podcast HERE
Keep Listening!
Here’s the shownotes
Jen Waterson
Today I am very excited to have a guest with us who is a legal expert, so it’s not something we look forward to, getting in touch with our legal people but we all need to be surrounded by the right legal people and I think it’s important for us as business owners to be well informed ad informed enough to protect ourselves when we need protection. We don’t know what we don’t know and I guess that’s what I wanted to talk to today’s guest about, Riz from Found Legal and what we’re going to talk about is contracts and IP. So, the types of things serviced based businesses need to know when it comes to contracts, the types of things you should be asking your legal people and then we’ll touch on IP which I think is a interesting topic around intellectual property, you know what is the differences between your trademarks and your copywriting. As a business owner, I think we need to make a point of knowing the things that are going on around us. So, I would love to introduce todays guest, Riz McDonald.
Riz McDonald
Hello and thank you so much Jen for having me today.
Jen Waterson
Tell us a little bit about yourself and your business Riz.
Riz McDonald
Well, my name is Riz McDonald and I am the founder and director of Found Legal. I just celebrated my first-year anniversary in September which I was delighted about. I am a lawyer of sixteen years’ experience and have been negotiating and drafting contracts for the last twelve years and I saw a gap in the market for legal services that were affordable for entrepreneurs and online businesses. So, I put Found Legal together and I’ve been loving every minute of that journey since I started. I offer a fixed fee type service that also incorporates templates and courses and business strategy as well as I utilise my business experience as well.
Jen Waterson
Great, I am very excited to have you here because my background is accounting, so in my background working with a lot of business owners, there has been so many times when I have had to spend time working with a client’s legal team, such as working on different things together with the legal people. So, talking to legal people isn’t something that I haven’t done before, I have done it many times before for many different reasons. But when you’re running your own business and dealing with clients, sometimes you’re too busy and you don’t need to know everything single thing that you guys as legal people know, but you need to know what to ask and what you need to know. I guess that’s where contract seems to be the first place that we need to sort of head to as we start to get more clients, grow and get bigger paying clients. I thought it might be a good chance to have that conversation around why we need contracts.
Riz McDonald
If you provide a service, any kind, especially with the online base growing so much with so many amazing services being offered from graphic design, web design social media marketing just to name a few. It is important both the service provider and the client have certain expectations and boundaries set, to avoid confusion around when the service provider should be paid, what is the scope of the services to avoid scope creep. Which we’ll talk about soon. Also, to set out who owns the property and to join those provisions of services. But in a nutshell, it’s all about setting out the rules of engagement for both parties, what their obligations are and what the outcome is they want from that arrangement. If you don’t have things in writing there’s confusion because each person has their own interpretation of events, so it’s much better to have everything in black and white to go back to if you need to.
Jen Waterson
Yeah, so it’s about setting some boundaries while everything is going well. If when we’re about to engage somebody as a service provider assuming that everything is going well, cause they’re about to pay you some money, that is then the best time to sit down and agree on the boundaries of the job. Is that about the sort of size of it?
Riz McDonald
There’s that as well. Also, to limit your liabilities and to protect you from any risks. So, it’s a combination of the limitation of your liabilities, boundaries and create expectations. This will avoid scenarios like scope creep for example, when you have a discussion with your client you’re all excited about the project, you’re going to talk about the services you are going to provide, you go and create what you think is what you have agreed on with that client, then they look at the work and say well no I wanted these other things as well while your understanding was different. And the difference between that understanding can be thousands of dollars which causes problems.
Jen Waterson
I have just had some good conversations with clients around scope creep and how it is starting to impact their businesses, so when you quote on a job or agree to a price, you yourself have very specific ideas on what that job entails, but I guess even the best of clients at some point can sort of try to take advantage of maybe your good nature or willingness to please and try to sneak in a little bit extra of this or that. So, people can kind of take advantage of us and they don’t have to be bad people to do that do they Riz.
Riz McDonald
Absolutely, and you know when you have clear clarity around the job and what it entails, and if you make it clear to the client and say this is the scope of the work and say hey if you want anything outside of this then this is what’s going to happen. If you want me to work over-time then here are my over-time rates, and if you want me to provide you with this extra optional add on’s, then this is the fee for those things. So, making it clear upfront to the client what the actual scope of the work is, how much that cost is and what will happen if you go outside of that. If you set those things out clearly then when you’re in a situation where they ask you to do something that’s not in the scope, you can nicely say this is outside of the scope we agreed, if you would like me to do this part of the job I am more than happy and here is the details of the cost.
Jen Waterson
I guess it just makes it easier to say no and makes the conversation flow a bit easier when you can say as we have outlined this in agreement. It’s like having a third party sitting there for you to refer to make that conversation easier as opposed to saying sorry that wasn’t part of the deal. It can help avoid uncomfortable conversations.
Riz McDonald
Absolutely and when you have that initial conversation, you should be setting the boundaries and expectations from the word go and then you can confirm the scope of the contract, and when they sign it they are signing it on the basis that they have understood the scope of what is planned. When you have that certainty it makes it clear for the client and allows for a better customer experience also, because then there’s no surprises if they want something outside of scope, you don’t even have to refer to the contract in that sense, you can just say look it’s out of scope but these are the jobs we’re happy to do for you. If there is an awkward situation where the client is insistent then you can actually refer to the contract. I always find when I work with my clients and we draft the documents they need, having conversations and setting the expectations are super important because it’s a much better client journey for both parties where you aren’t having to remind them necessarily of the contract terms.
Jen Waterson
I think it increases your professionalism, as a business owner you’re a more professional person handing over a contract.
Riz McDonald
Absolutely, it legitimises and makes you appear more professional when you have proper contract terms in place. Your client is also comforted knowing everything is being documented and they have the opportunity to approve that scope of work and understand what is being provided to them.
Jen Waterson
Does it also protect you in say the job involves for example a web designer and part of contract says that you will provide them with specific work that needs to be done in a certain time, does it take into account those sort of other things that might get in the way of the completion of a project?
Riz McDonald
Absolutely and it should. If you send them work for review with deadlines to meet, and don’t forget youll have other clients and other deadlines as well, so it’s important that each of your clients attempt to reach the agreed deadlines. So, having those deadlines and times and dates in the contract is super important.
Jen Waterson
So, is there any contracts that doesn’t need them? I guess it’s easy for us to say you all need to go and get contracts and have some sort of an agreement, but can you get away without having them. What type of risks are you really taking other than say the risk of not being paid, like maybe you should be paid before the job to start with? Let’s say I got paid before the job and then I performed the job out of contract and then they weren’t happy with the job and the client wanted their money back. So, does a contract help with that sort of thing?
Riz McDonald
Yes. So, contract should absolutely help you with that kind of scenario, so you need to have language in there as to what happens if the work has been approved, whether you should still be responsible if the clients approve the work, I would think not. What happens if the client wants a refund, do you have a dispute resolution process in the contract? Around what happens if the client is unhappy and how that is supposed to be dealt with and so it is super important to have those steps in your contract. When you don’t have a contract then there is going to be an argument and potentially and escalation when you are going to need to engage lawyers and that’s going to be much more expensive. I prefer a proactive approach where you have clear contracts in place so if anything should go wrong you will have something to follow and guide you to deal with that rather than the escalation and the mess and be being reactive because you have nothing to guide you on how to handle the situation.
Jen Waterson
What types of things can go wrong when we don’t take care of the things we’ve been talking about?
Riz McDonald
An example is when I had a client who owed $25,000 in fees and she unfortunately had not put a contract in place and had kept undertaking more and more work from the same client despite money being owed. It was a very stressful time for her, she was having to think about going to small claims court, when in fact if she had of had the right terms in place she could have made sure she received a deposit and not undertaken any future work until outstanding invoices were paid because the terms would have said so. Instead of growing and building her business and relationships with new clients, she was spending a lot of time trying to deal with this outstanding payment and fight this person to get the money owed. She had every right to that money, but unfortunately she didn’t put terms in place to protect her. Another example which is around intellect property, is when due diligence wasn’t taken when a client came up with a business name and didn’t do all their searches, so the day before launch after spending all that money on brand assets and branding, they discovered they had to change their name at the last minute because somebody else owned the trade mark. So, in terms of talking about intellectual property again, another scenario is when I had a client who was a surface designer had a contract that didn’t have correct terms, so she didn’t clarify that what she was creating was for a specific purpose only and she kept the language widely which wasn’t clear enough. So, in her case the license was only to use her copyright on her bed linen, and this particular person used it on other things that she had not paid for because of the unclear language in her contract. She basically copy and pasted a contract and was what she had been using and she was burnt by that so I helped tidy up the terms. Her fee would then have been double what she charged if her language was in place correctly and had the extension of her use for other licenses. Those are some of the examples I had come across where they have had to be reactive rather than proactive. For me, that’s just one small indication of why having clear terms is so important.
Jen Waterson
It’s also the types of things that as a professional lawyer who has seen a lot of it before, that you can sort of preamp that sort of stuff and say okay but what if this or that happens. As a business owner, we’re sort of going okay well yeah I haven’t considered that and ask if I am covered for that. When you’re talking to someone with experience who can customise the contracts specifically for you, you truly can be saving yourself thousands of dollars.
Riz McDonald
Yeah so the first example that I used, if she had of set out a deposit and any work she was going to get could not be handed out until a payment was made that she would not take on any further work if there were outstanding invoices, for example that wouldn’t have escalated that amount to such a large amount and still be owed.
Jen Waterson
I guess the other thing is as a business owner, we’re very good at what we’re very good at, and some of us are just not very good at things like asking for money, you know the girl in your example would not have known that she’s not being paid which can be really hard to bring yourself to ask for the money sometimes.
Riz McDonald
This is why you should not just set up a contract as a band aid, use it as a safety net and set your boundaries and expectations as part of the interactions you have with your client and then combine that with the contract terms. So, you’re constantly setting those expectations from the moment the client meets you and from the during and after process as well. So, it’s all there and just a part of how you run your business.
Jen Waterson
Such great advice.
Riz McDonald
One of the other things I wanted to touch upon as well, is intellectual property and clarifying in the contract who owns it. If you don’t have that kind of clarification, then there’s a problem for either your client or for you depending on what your contract does or doesn’t say. Having that incorporated into the contract is super important. The other thing is you may be wanted to be recognised as the person who created the work and so having clear language around that is important.
Jen Waterson
You just made me think of another time I was having a conversation with a client who had done some amazing work with an amazing client of their and they wanted to use that in their marketing and it was never a case of confidentiality, but the client didn’t want them to use their work in their marketing which was disappointing because this growing business would have benefited from it however it was not agreed on at the start, so it couldn’t have been used. I thought that was harsh on that client. Say for a designer who needs to visually showcase their work in order to get more work, then it would be helpful for them to be able to have that agreement at the start which says if everything goes well, can I use it in my marketing going forward? Is that the sort of thing you can add in early on as well?
Riz McDonald
Absolutely, you can add it in to the contract therefore you have the right to use it. As a courtesy, you could at the end of the job request and confirm to them that youll be using the content, but certainly you can let them know that at the start of the agreement so that you don’t have to follow up necessarily.
Jen Waterson
Getting on to intellectual property, just give us a bit of an idea of exactly what it is and what the differences are on trade marketing or copywriting something, because those terms can be used interchangeably.
Riz McDonald
So with trademarks, that’s more the business name, the brand name, the slogan such as Nike the name and brand name and just do it is the slogan, which is one example of how you can register a trademark which is also something you have to do through IP Australia. This basically allows you to register your trademark and use it next to your name and it gives you exclusive rights to your name. So, if you set up a business and you come up with a name and register that business and company name and get the socials and demeans, and your trademark has already been registered, then you may need to rename your business which is a costly exercise. Therefore, it is important to do all your searches before you decide on a name, and when you do decide on a name it is important to get those demeans, socials and register the trademark and name. Just to be clear, registering a business name with ASIC does not give you exclusive rights, only a trademark can do that. Whereas copyright exists when it’s created so if you have an idea it isn’t copyright as its still in your head. But if you put it down on paper, if it’s something original like a song, poem or book, then you have that copyright. Also, to protect that copyright, you must have website terms and conditions if you have blog or imagery on your website, that’s your original content.
Jen Waterson
So, say I have a blog and I want to copyright that, if I have the little c in the circle, I literally have to put that on their next to my business name or whatever it might be next to it is that automatic copyright, or do I have to go through some big channels of paper work and processes?
Riz McDonald
Copyright is created the moment you right it down, and then when you publish it, it’s there for the world to see and it’s your original content. But what you can do to try to prevent people from plagiarising your content is make website terms and conditions that tell the world hey the content on my website is mine and my property, you can come to the website and read it but cannot copy it and pretend it’s your content without my permission.
Jen Waterson
Yeah that’s interesting. I had a lady email me and said she is writing a blog and one of the content in one of your podcasts has inspired me to include it in my blog, would you like me to reference you and would you like me to put a link to your website where I put it in. So, I said yeah sure, which was very proactive and I guess anyone could have done it and not referenced me at all. I thought that was nice of her but yes my terms and conditions on the website would say all of that.
Riz McDonald
Absolutely and you might see on socials such as Instagram that you might see content that isn’t original but it will have a little pic credit to the owner or original source. It is always good to ask permission first and not assume the content on google is free. It’s always worth at all if possible to ask for permission on anything, and if in doubt don’t use it unless you know it is free. If you aren’t able to find the original source or aren’t 100% sure as to its origin it might be better to look for something else where you can get consent to use somebody else’s copyright. Always ask for permission because you could be breaching copyright and it depends on the situation as well.
Jen Waterson
So then, how do we go about doing this are there people who have templates, are they the way to go? Or whether we should be looking at outsourcing them and getting them custom built when it comes to contracts, what’s your advice there?
Riz McDonald
So, it depends. On my website, we sell templates and we also offer custom services, typically people who are confident with contracts tend to buy the templates because they feel they don’t need the extra support, whereas with the custom services they want a bit more guidance and support and to be walked through the contract, have terms explained to them and have them drafted around specifically things for their business. When you find random things on google you might be infringing somebodies copyright and you might be copying things that are irrelevant to your business and how you operate your business. It is then much better to source either templates or custom services from reputable sources and to make sure it aligns with your business and protects you from what you need to be protected from.
Jen Waterson
Yeah perfect. So, then to finish that conversation up, how should we be reviewing these things? I work with a lot of clients who have been in business for three or four years, and presuming we get something in place at the start of our business, at what point should we be looking at updating it or changing it or reviewing it. Are there certain trigger points?
Riz McDonald
A couple of triggers could happen, one is if you have a poor experience with a client and it might highlight a potential gap in your contract as an example and you use that as a lesson to improve what you have. The other is it’s worth checking at least once a year your contract terms and whether they still align with how you run your business and processes, so it’s worth revisiting from that perspective as well. Your payment terms might have changed, how you provide the services and the format you provide may have changed, so it’s worth revisiting your contracts when you’ve had an experience with a client that requires you to look at anything specific, whether you’ve changed your systems and processes that might impact how you deliver the services and therefore impact the terms of your contract. Also, just general tidy up once a year if you haven’t had those experiences in between, it’s always worth it.
Jen Waterson
It’s interesting. I think it’s one of those things as a business owner we can keep putting it off, but I guess it’s like we said earlier we need to be on top of these things in businesses because unfortunately it’s all these un fun things in businesses that add up and we need to build on these things and being careful on taking care of all aspects at the same time, would you agree?
Riz McDonald
Absolutely. I think with small businesses they think small when I want to teach them and show them they need to think big. As a part of that, having the right contracts in place to not only protect you but your client and give your client confidence in working with you because they can see they’re getting a real contract not something random riddled with spelling errors and totally irrelevant to your business. It also gives comfort to the client that they know exactly what they’re getting and confirms any consultation they might have had. From your perspective, you know that you’ve got clear terms arranged and will know what happens if there’s a cancellation or refund or if a payment isn’t made on time.
Jen Waterson
Also, generally I guess with a lot of businesses, you really only have to do this once and then sort of tweak it and maintain it, but is it kind of a once thing or one per service offering?
Riz McDonald
So, on the one hand it’s a once thing but each scope of work or proposal will be unique to that individual client but the general terms will always generally be the same, unless you have negotiated anything in the contract terms that are specific to a client. You may say have payment terms that are 30 days for one client and you decided you’re going to have 7 days for another client. I would recommend for small businesses to operate on 7-14 days and preferably with an upfront deposit. Certainly there could be some nuances in the contract that you negotiate for a particular client that you won’t necessarily do for all clients and that would be the only time you change your terms. But if possible try to resist any changes that have a negative impact on you. The general terms will always stay the same but your scope of work or proposal will vary for each individual client.
Jen Waterson
Well I think it sums it up pretty easily and we need to be proactive as business owners in taking care of ourselves and not wait until something bad happens to then go I wish I had have taken Rizs’ advice and gotten a contract sorted for myself. It’s about that proactivity, in pretty much all aspects of your business.
Riz McDonald
Absolutely and when you have processes and documentation in place it is a better experience for you and the client. The client is then also more likely to refer you on because they’ve had clear boundaries and expectations set all along the way with effective communication.
Jen Waterson
Well that was really helpful Riz. I hope it’s helped somebody out there because like I say it’s the type of thing we can just put off for ages. Sometimes we need to just bite the bullet and say okay I am going to get this sorted. Like you say, once it’s there it can really be reused over and over again, and every time you pick it up you’re only looking at the tiny changes you might need to make for specific clients, rather than having to rebuild everything from scratch every time. So, thank you very much and I’m sure it will be very helpful for a lot of people.
How can people find you Riz?
Riz McDonald
They can find me on Instagram finddlegal and on Facebook. My website is FindLegal.com and they can find me there as well. I also have my own podcast, Legals & Biz with Riz, so there’s lots of different ways in which you can find me. I’m always open to DM’s, my clients send me DM’s as well so I’m open to that. I love supporting businesses and helping them think big and scale those empires.
Jen Waterson
I really love the way you seem to be able to communicate what can be quite difficult and complicated so some people. You seem to have a knack for communicating it in a way that makes sense and talking in real people terms, it gives people more proactive decisions and to invest in IP. I like your approach you’re doing well.
Riz McDonald
Thank you so much. That’s the aim to educate businesses to be proactive rather than reactive. Reactive costs a lot more money and not to mention the stress and impact on mental health when you are in such a negative situation.
Jen Waterson
Yes, be proactive and avoid the ugly and get the advice you suspect you need. So thank you so much for coming on the podcast Riz.
