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legal consulting Archive - TransSwipe - Merchant Services and Credit Card Processing

TransSwipe - Merchant Services and Credit Card Processing

Archive for the ‘legal consulting’ Category

4 Legal Considerations For Your Freelance Work

The legal information* comes from guest author Vincent DiForte. Vincent is a Legal Fellow at Priori Legal, where he works to transform how small businesses find a lawyer and afford high-quality legal services in New York, California, and more. Vincent graduated with honors from Brooklyn Law School where he served as an Executive Editor of Brooklyn Law Review.

4 legal considerations

According to a Freelancer’s Union survey, “there are 53 million Americans—34 percent of the U.S. workforce—working as freelancers.” These self-starters fall into two categories: millennial or Gen X professionals going down the road of self-employment or retired baby boomers looking for more flexibility later in their careers.

If you are working as a freelancer or considering it, knowing about these four legal areas will help protect you, your work, and your income.

1.  Contracts

Using a lawyer to draft a contract for your freelance business is critical to ensure you get paid and prosper. A contract not only sets clear expectations for you and your client, but also creates the framework for how courts will interpret the agreement if a dispute arises.

It’s intuitive that a contract needs to state the parties bound to it, the scope of the work and the payment terms. There are, however, a number of other clauses that every freelancer should consult a lawyer about including in their contracts.  For example, a lawyer may recognize that your contract is missing a method of delivery and acceptance clause, an intellectual property rights clause, or a termination/dispute clause. For a contract to properly protect your freelance business, it must be tailored to your industry and specific circumstances.

If you are looking to keep costs down and make legal a one-time expenditure, talk to your lawyer about the concerns your clients typically have so they can draft boilerplate “fallback provisions.” Or, if you already use a contract, ask a lawyer whether it would be more cost-effective to revise it to meet your specific needs, instead of drafting one from scratch.

For an in-depth discussion of the legal do’s and don’ts of freelance contracts watch this Skillcrush webinar with Basha Rubin, CEO and Founder of Priori Legal.

2. Taxes

Along with the independence of freelance work comes the added responsibility of making sure you comply with tax law. Like an employee of a business, freelancers must pay income tax. Unlike employees who receive a W-2, taxes are not withheld from freelancers’ paychecks to cover the employee’s half of income tax, Social Security, and Medicare. In addition to making sure they pay appropriate taxes that were not withheld, freelancers must also pay the employer’s half in the form of self-employment taxes on Form SE.

Moreover, freelancers cannot wait until April 15 to pay all their taxes from the previous year.  Rather, they must pay estimated taxes quarterly.  This means that freelancers must pay taxes four times a year for the money they earned during that particular period. Paying estimated taxes does not constitute filing your tax form, but the estimated taxes will be filed as taxes paid on your tax form for the current year.

Although taxes may seem to cause freelancers many sleepless nights, the easiest way to ensure compliance is to diligently keep track of all your income and expenses. Business expenses for freelancers get deducted from their income on the Form 1040, Schedule C.  For example, if you are working from a home office, this may mean that part of your rent or mortgage payment qualifies as a business expense and deduction from your income.

3.  Intellectual Property

For most freelancers, protecting or preserving intellectual property rights is the lifeblood of their business. Ensuring that you do not transfer ownership rights in the work you create can have a dramatic impact on your career and earning capacity.

As a freelancer, you must take the necessary steps to ensure you retain intellectual property rights. Disputes frequently arise over ownership of the intellectual property (websites, logos, designs, articles and other creations etc.) when ownership rights are not clearly outlined in a contract or agreement. If a client hires you to create something for them, you may transfer all intellectual property rights in that creation upon payment. You can consult a lawyer about the various options you can take to protect yourself from relinquishing these rights. This may include contractual language that states you retain all intellectual property rights or that you grant the client a license to use your intellectual property for the agreed payment.

If a client, or someone else, violates your intellectual property agreement or fails to pay for use, you should consult a lawyer to determine your best recourse.

4. Business Entity

You may want to consider forming a legal business entity.  By forming a business entity you can protect your personal assets from any liability your freelance business incurs. In addition, choosing the right business entity may also add tax benefits and a level of professionalism to your freelance business. You should consult a lawyer about whether forming a single member LLC, sole proprietorship, or S corp is right for you.

No matter how big or small your freelance business, there are always legal regulations and liability to consider. Taking a few precautionary steps can make all the difference in protecting your freelance business, mitigating possible financial and legal problems and avoiding future stress.

*This blog post is legal information, not legal advice. If you are in need of legal advice, consult a licensed lawyer.

Founder Spotlight: Basha Rubin of Priori Legal

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At Dwolla, we always appreciate hearing and sharing the perspective of other entrepreneurs. Recently, we chatted with Basha Rubin, founder and CEO of Priori Legal, an online marketplace connecting small businesses with top-tier lawyers at below-market rates. In this Q&A, Basha shared insights on the importance of laying legal groundwork early, as well as her own perspective on life in the startup scene.

“I think it’s important for small businesses and freelancers to realize that lawyers can be a lynchpin in whether a business survives or not. You need to find a lawyer that you click with, so they can help your business thrive.”

-Basha Rubin

Can you begin by describing the mission of Priori Legal?

Priori Legal is a curated marketplace connecting startups and small businesses with high-quality lawyers at below-market and when possible, fixed rates. We do everything we can to make the process of finding, hiring and working with a lawyer as transparent and efficient as possible so our clients can focus on other tasks.

What sets us apart is the quality of lawyers in our network. Priori accepts only 20% of lawyers who apply; we want to make sure we have the top players in the field. From there, Priori does some of the legwork for you—we negotiate a 25% discount for our clients and make conference call scheduling easy. We’ve also built robust billing and invoicing tools, so working with a lawyer is as easy and pleasant as it can be.

Priori has recently expanded to California, now serving two states’ legal needs. As the founder, how has your role shifted?

I’m having so much fun running Priori, especially as the team is growing. I’ve really been thinking about my role a lot these days. A year ago, as the founder, my time was spent on everything short of being a developer. I ran our business development, social media, marketing, the list goes on… Now we have a team of ten, and I can focus on the bigger picture tasks and the company’s vision.

Running a startup, I’m constantly figuring out how my role changes as we grow.

Thinking back to the early days, can you discuss the biggest challenges you faced when first starting Priori?

I think my biggest challenge has been overcoming the fact that I’m a perfectionist.

I have always been a perfectionist. At one point, the idea of a typo horrified me to my core. (Ok, ok, not at one point, still a little true) I was trained as a lawyer, and some of the habits I developed were hard to shake when starting out as an entrepreneur. I had to realize that it’s not about perfecting every detail. You can spend years smoothing over every aspect of a product, and it could still completely fail.

Despite my insistence upon making everything ironclad, I realized sometimes you just need to put yourself out there.

Shifting the focus, how do you help your clients understand their biggest legal challenges?

To get our clients to understand their legal challenges, we do a lot of content marketing. It’s one of our most successful customer acquisition channels, lots of education and writing about the legal needs of small businesses.

We also have a very low barrier process to get our clients on the phone with lawyers. Our aim is to make their experience as seamless as possible.

What is the #1 piece of legal advice you would give to freelancers or businesses just starting out?

Talk to a lawyer early. Businesses are really anxious about working with lawyers because they are afraid that the costs will add up. If you work with a lawyer to draft a contract or protect your intellectual property upfront, you’ll ultimately be able to keep your legal costs down.

As a small company, be transparent about your budget, so your lawyer understands your parameters.

And, likewise, what’s the #1 worst piece of advice freelancers often receive?

We realized that a lot of freelancers found their contract online and then edited it or repurposed a friend’s contract. In many cases, these contracts don’t actually protect what freelancers think they do or want them to.

My advice to freelancers, make sure you have a good contract. One that is tailored towards YOU.

Turning over to finance, how have you been successful in managing the finances of your startup?

Keep the operation as lean as possible; keep costs down. And, viewing everything in one central location helps, too. For example, for our HR needs, we are about to transition to JustWorks, which allows us to consolidate those processes and see everything in one place.

Get your SMB Finances on Track with these five questions

©2017 TransSwipe

 


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