10 Legal Tips for Independent PR Pro’s

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RC-logo-icon copyLast week at headquarters, we were joined by Britany Engelman, founder of Engelman Law where she practices primarily in the areas of Personal Injury, including high profile wrongful death cases, catastrophic injury, auto accidents, premises liability, brain injury, civil rights; Labor & Employment; and Business Litigation. This was the first of many upcoming Salons that Radix is hosting for Independent PR pro’s in LA and beyond.

The conversation was free-flowing with attendees asking questions that included how to better protect themselves based on prior experiences, issues to address in the now, and thinking long term.

Here are key takeaways:

  • Set aside a legal nest egg. $2,000-$5,000 is a good amount to aim for. That way you’ve got the cash on hand should something happen and you need representation quickly. It can be hard to find a good lawyer last minute unless you know someone in that particular field of practice.
  • This one I can speak to from personal experience, more than once. Make sure and have attorney-fees provision in your contracts. If you are forced to take them to court to collect payment, part of your contract should require them to pay all associated legal costs. If a prospect gapes at the ask and wants it removed, proceed with caution. Britany commented, “Absent that provision even if you win in court you don’t get your attorney’s fees and you can’t even file in state court.”
  • Along that same note…Evaluating new business should be a two-way street, meaning, not are you right for them but are they right for you. Did you know you can hire an attorney to run a quick background search on a company and find out if they’ve been taken to court, claimed bankruptcy, have liens on their business? It’s important to evaluate the financial health of a prospective company. If they have a record of problems, odds are high you might run into payment issues.
  • If a company seems on shaky ground but tries to reassure everything is OK, there are a few things you can do: First, decline the business if your gut is telling you to. Second, if you think you want to take the gamble you can ask for payment upfront. Britany commented that in service industries like ours, some clients are uncomfortable handing over cash before any work is done. A work around is an attorney trust account, or escrow. The lawyer acts as the middleman, releasing funds at designated points structured into the contract. This can be especially helpful with international accounts.
  • Again with the money theme. Many of us have had to stop work mid-project because a client is late on paying on their bills. How long this goes on varies by Independent. Some can be strict and others can allow it to go on for months believing their clients promises – often because they’ve bonded (more on that later). Include a provision in your contracts that clearly states work will stop after payments are xx days late. You decide the grace period but 30-45 days seems average. It’s not uncommon to include a penalty based on a single-digit percentage. They never want you to stop working even if they are 2 or 3 months behind but sometimes you have to cut people off.
  • Get it in writing. Simple yet important. If someone owes you money and you’re chasing them down make sure you get it in writing (or agreeing to) that they owe you xx dollars.
  • Business insurance. Get it. It’s not that much and it can save you a whole lot of headache. This is one of those “better safe than sorry” topics and there is zero reason not to have it. What you want is Errors and Omissions (E&O) insurance. In short it protects you, as a business owner, from liability and covers cost of defense, should you need it – And it’s tax deductible.
  • Non-competes are generally unenforceable in California. It would be an extreme case for a suit to move forward in court. Know your rights when signing client-supplied contracts that try to include this terminology. Check this chart to see what your state says if you’re outside CA.
  • This one is a little different because it’s not transactional. It’s learning to separate emotional from business. Because of what we do, we become natural cheerleaders for our clients. For a majority, they become friends. Lines can become blurred and compromises made to your business because it’s easy to “feel bad for them.” I’ve heard more women than I can count say this – men too, but not quite as often. We can’t operate our businesses and make concessions beyond our limits because of an emotional pull. I’ve experience this personally, and seen it with Radix Independents.

 It’s the same story, you start work, things are fine, bills suddenly aren’t being paid, they are so very sorry and it’s coming soon – promise! You wait and wait, more apologies, sad stories about investors or hardships on their end. We want them to win and the PR helps them close deals so we compromise and let things stretch. Sometimes, for too long. Your priority should be the health of your business and if you continually find yourself in situations that are threat, it’s time to examine what you can do different.

  • Which leads to the last point. As PR people, we’ve spent our entire careers helping other people build their business. Now it’s time to turn that focus on yourself. You are not just a “PR person” any longer, you are the CEO, founder and head of operations. You should be just as concerned with how your business operates as you are about clients to keep it afloat. Get comfortable with financials, legal, operations and tools to grow, or further professionalize, your business.

To be notified of upcoming events in LA, SF or NY, sent a note to hello(at)radixcollective(dot)com.

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