By Cindy Atoji Keene
Tackling legal issues can be a daily minefield for many small business owners, who often don’t have the resources to employ their own in-house attorney. As a former general counsel herself, Jan Glassman knew that start-ups need advice on the same quandaries – contracts, labor regulations, licenses and permits, intellectual property, tax compliance – as big businesses. She aims to break the traditional “billable hour” mold by offering on-demand, in-house legal services at a reasonable rate. “Outsourcing legal work makes sense in a time of tight budgets and a mobile workforce,” said Glassman, who started Daily General Counsel two years ago. Many of her clients are what she calls “the underserved small businesses on ‘Main Street,’ such as barber shops and spas, auto repair shops, and retail companies.”
Q: Is it true that the average small business in America may be one law suit away from bankruptcy?
A: I think that is a fair statement, because when someone enters into litigation, the process takes over, and it’s totally uncertain what it’s going to cost and how long it’s going to take. That cost is not just in dollars, but also the huge amount of time that the business owners and support staff must spend in preparation for the law suit. Only very, very wealthy companies can afford litigation.
Q: What gave you the idea for starting Daily General Counsel?
A: I worked for 15 years as a general counsel for a management-consulting firm. We had an open door policy, and all day long, senior level VPs and comptrollers would come into my office with questions. It could be a situation on the call center floor; a vendor who needed to be paid; a question from a sales rep out in the field. I saw how difficulties could often be solved quickly when addressed pragmatically with knowledgeable legal advice. The small business owner just needs an answer so he can get back to work.
Q: What are the most common legal mistakes that small businesses make?
A: The most common mistakes include operating your business with bad contracts – or no contracts at all; poor management of problem employees and not documenting the steps taken with them; and not using restrictive covenants effectively, which are contract clauses that protect client connections or confidential information.
Q: How does Daily General Counsel work with businesses?
A: We charge a flat rate of $1,500 a day, so clients know upfront what fees to expect. This includes a full day working side-by-side with the business owners, on-site at their company. Instead of going back and forth on a document with phone calls and emails, I am right in their conference room, focusing on whatever issues they have. This usually includes three or four priority items, so we’ll gather and review documents; talk about alternative ways to handle the problem, then decide on a course of action. For example, business owners should always have a lawyer look over their employee manual, to make sure that policies don’t conflict with the law or lead to possible future disputes. The day ends with a review of the topics we’ve discussed. Then I send a report, summarizing the advice provided and any remaining action that needs to be taken.
Q: What are some typical problems that crop up in family businesses in particular?
A: I know family businesses very well, and one common problem derives when family businesses are passed onto subsequent generations. As a business grows, internal ‘political’ issues arise – you may have family members who are not performing or effective in their positions or co-owners who don’t get along. Then you end up with situations where the business operations are hindered. Addressing the conflict depends on who owns stock and in what amounts; what position does the ineffective family member have; how many family members are in the business, etc.
Q: Why is legalese so often not understandable?
A: Law is about words, because rights and obligations that flow from contracts define how a business relationship is intended to work. Lawyers want to protect clients to the ‘nth’ degree and do it in a way that is airtight. Two business owners can write down a business deal on a napkin – ‘I’m going to make this, and you’re going to buy it,’ but then so many circumstances come into play. What if the product is defective? What if there’s a hurricane and electricity is down for a week and service is delayed? What if there is a dispute? All the contingencies need to be addressed.
Q: Your husband is also an attorney and your partner at Daily General Counsel. Who wins in a dispute, you or your husband?
A: My husband will quickly tell you that I almost always win in a negotiation. He likes to joke that he is like an unpaid intern. His usual response is, ‘Whatever you want, dear.’