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The Entrepreneur’s Counsel

By @ 04/21/14 in Research and Analysis

I recently wrote an article for The Young Lawyer about young attorneys counseling friends’ side businesses. Here it is in full:

Niche Practices: The Entrepreneur’s Counsel

Ryan Hughes is an ERISA and election law attorney at Reich, Adell & Cvitan who also represents a DIY jam making business. He can be reached via Twitter @RyanHughesCA.

Engaging Entrepreneurs

Entrepreneurs always need lawyers, and in recent years, the do-­it-yourself (DIY) market has exploded. Etsy store proprietors, craft food makers, home brewers, independent fashion designers, hyper­local food growers, and vintage decor resellers—to name a few—are everywhere. Odds are that you have a family member or friend who’s involved in a DIY business. Fueled in part by the struggling economy and in part by increased demand for locally produced goods, DIY businesses will likely increase their presence in the American economy.

These niche ventures are exciting for our family and friends, but they also create the need for legal assistance, as with any new business. However, DIY entrepreneurs likely can’t afford expensive counsel to advise and guide them. It’s a gap that’s filled perfectly by newer attorneys on a low bono or pro bono basis. In doing so, you gain valuable experience and help your local economy.

Counseling a DIY entrepreneur allows young attorneys to gain marketable experience advising an actual business venture. DIY businesses share many of the same concerns as larger corporations: limiting liability, tax implications, regulatory compliance, etc. It’s also a great way to gain experience in business entity formation.

Another benefit is that you are acquainted with the venture from its inception, and over time, you may have the opportunity to cultivate that relationship and grow with the company. You might even luck out and get in on the ground floor of the next Clif Bar & Company, which started in a home kitchen as a DIY business.

There are some things to keep in mind before you start counseling your first DIY business. Tailor the extent of your representation to what is appropriate for your level of experience and convey, in writing, that limitation to the client. Don’t overrepresent your ability during the intake discussions; be honest and upfront about your experience. Draft an actual retainer agreement. A formal agreement may seem off­putting to friends and family, but a written retainer is important for your protection and establishing expectations with the business owner. Make sure also to not run afoul of your jurisdiction’s legal liability insurance requirements. Finally, keep representing DIY ventures in perspective. It’s important to identify what you hope to get out of it because such ventures likely don’t have the start­up capital to pay market rate for a lawyer’s time.

Whether done on a low bono or pro bono basis, representing a DIY business is very fulfilling, and I can’t recommend it enough for the DIY entrepreneur in your life.