Small Business Law for New York City Business
In this podcast, we discuss Small business law for New York City Business.
I wanted to touch upon the differences between hiring a small business attorney and saving some money and using Legal Zoom, or any number of other providers. This isn’t a “hey, here’s why lawyers are always better!” cliche podcast, but rather a “This is when you need an attorney vs. this is when you don’t” explainer. We discuss value more than anything else. Paying an extra $500 to a small business lawyer in New York to save yourself an extra $2000 sounds like a good deal, right? The problem is lawyers are typically horrible at getting that message across, so most times people are left to wonder why they’d pay $3000 for a lawyer, when a website can do the “same thing” for $300. This podcast digs into that idea, and explains why that’s not always the case.
I recorded the podcast with Neelam Singh, Esq., who is my Of Counsel and who handles everything small business at Gershburg Law, P.C. I couldn’t be more proud to work with someone. Neelam is that rare attorney that loves what she does and it shines through in the quality of her work. She works with our small business clients because she cares so much about their success, and she brings a truly holistic approach to small business law.
At the end of the day, our job is not just about protecting the client by supplying them with 230943 forms and pages of legalese. It’s about finding solutions to their problems. It’s about telling them whether they need a specific agreement or whether they should invest the precious money they have at the start up stage to trademark something that they may not need to. We discuss this, and much more, on this podcast. I’ve also included the transcript below, for your convenience.
Enjoy.
Daniel Gershburg
Hi Neelam
Neelam Singh
Hi
Daniel Gershburg
So Neelam Singh is a friend of mine, a colleague of mine, and we’ve known each other for how many years now?
Neelam Singh
Oh Gosh.
Daniel Gershburg
College? 14 years? Yeah, we’d known each other for 14 years, she’s also my (—) counsel and she goes everything small business in my firm and I wanted to bring her on today just to discuss a couple of things because of a lot of questions that I get surrounding how business work and I think she can give an honest truthful answer to a lot of questions that clients can have and the way lawyers are sort of looked upon in in small business matter today. So Neelam thank you so much for coming by.
Neelam Singh
Thank you for having me.
Daniel Gershburg
The most important thing, and we’ll keep this whole thing short but the most important thing is clients will come in and they will say “Hey, I need this, this and this done, how much does it cost? right and we will price him at several thousands dollars and some people will get it and some won’t. What specifically do you do upfront, like what is the value in hiring a small business attorney versus going to let’s say a (—) what is it that differentiates you in the services they provide.
Neelam Singh
So I think when you go to a third party such as Legal where they have to disclaim in their website that says specifically that they are not attorneys, they are not giving specific legal advice and everything they are giving you is informational and this isn’t creating an attorney-client relationship you’re already if… most people you know, may not weight sort of over gloss over that language but we are already sort of getting this dynamic where it’s unclear who’s interest they are really representing and whether they really understand your business concept and whether they are willing to take the time to understand your business concept and based on what business you are trying to start, or whichever business you are operating, that really dictates your legal needs. So you know it’s sort of speaking to an attorney as myself, we could tell you… if you come to me and say this is my business idea: how do I implement this?, I could tell you the exact steps in terms of you know, whether you should be forming an LLC or corporation, what type of agreements you need in place, what kind of intellectual property protection you need and I can also prioritize so that you know, you know it’s sort of a given that start ups have a final legal budget that can often times be quite small and I can help a client prioritize you know in terms of how to spend that money to make it last longer.
Daniel Gershburg
Meaning, so just let’s just strap on that a little bit, meaning you can say you don’t need this agreement or if you are going to put a priority, on things, these are the things you really want to start with versus someone else who typically doesn’t know and they’ll say “do I need this or probably I don’t need this along the road, it has no knowledge of that”, correct?
Neelam Singh
Exactly, and I think… so often times they get a lot of clients who have tried to use a legal zoom for two things: one, LLC formations as well as trademarks, and I think because the client has in their mind that they need to protect their intellectual property, they are not asking legal zoom to tell them whether they need to protect their intellectual property, they are saying: I need a trademark and I’m gonna go forward with it, on legal (—). You know trademark law which any trademark attorney (—) know, you rights really materialise from first use, not registration. So when clients come to me with a business idea and they have a legal budget, to me trademark registration is something that I see down the road, it’s not something they need upfront. If a client goes legal zoom I’m not quite sure if legal zoom would take the time to actually educate the client that that’s something they may not need right away.
Daniel Gershburg
I just want to like, again you know not in a salesly way or anything else I think you are absolutely correct in what you are saying to just harp on value, because i think that that’s something because of the economy that we are in and because of a lot of free(—) benefits that people get, they don’t get it anymore when they have to spend more than an X amount of dollars, because frankly we don’t have to spend that in a lot of areas anymore than we used to; but if you are paying more than 3000 dollars or 2500 dollars, I think one of the benefits and I’ll have you touch upon it is… it sounds salesly when I’m trying to save money but I legitimately think, legitimately think that you are saving money down the road because maybe touch upon how dealing with documents initially stems any kind of litigations down the road or at least make things crystal clear so that you don’t face that kind of situation down the road.
Neelam Singh
Yeah ok, so this is sort of an example that happened to me recently, a client that had formed an LLC through legal (—) came two me 2 years later and he sort of like: “ok, we now have outside investors and they are not trying to invest in an LLC so how can we sort of change the LLC into a corporate structure?” and that sort of one thing that stuck out in my mind because I don’t know how much counselling they might have received from (—), so I think at the time they might have spoken… I think they said they spoke to their accountant, their accountant told them that an LLC has more favorable tax, advantages and they said we want legal forming LLC and that’s what they get. Had they come to us at first that’s something that I’d probably would have pointed out. Ok, so there’s tax implications in terms of the differences between LLCs and corporations are treated but more importantly, you know how… where do you see your company going. If you see your company needing funding within the next five years, I would have recommended that they start off with an (—) as opposed to an LLC. So that’s one thing that you sort of you know, they now had to do something extra that had they come to me in the first place they would not have had to do.
Daniel Gershburg
And then, the other thing to touch upon that you actually just reminded me of is Delaware nonsense. So maybe talk about that for a second, every client that calls me that wants to set up an LLC or a business in New York, (—) everyone tells me to register in Delaware right? because it saves money. But that’s not necessarily the case in some circumstances when the business in actually based in New York and everyone is in New York. Right?
Neelam Singh
Yep
Daniel Gershburg
So maybe touch upon that and again just going back to this, this is why actually you are going to save people a lot when it comes to tax time and you realise “Oh my God, I’ve shouldn’t have set up the stupid Delaware LLC at that point”
Neelam Singh
Yeah, so I think up to 20 years ago Delaware was that probably was they were more favorable to corporate entities than the rest of the states but maybe perhaps the state caught on with how much money Delaware was making from incorporating there so a lot of these other states have amended their laws and they are pretty much a part of Delaware. So the only time I recommend someone to start a company in Delaware is when they are located outside of the U.S and don’t want to set up a physical office in Delaware because if the requirement still is I haven’t formed the Delaware company in a couple of months, but you do not need a physical office there, so you know, I think the real question should be why aren’t people forming in Wyoming.
Daniel Gershburg
What? Really? what’s going on in Wyoming?
Neelam Singh
So, interestingly enough I’ve had a lot of people who’ve asked me and I actually counselled people on why they should be forming in Wyoming and basically in New York if you get a judgement against a member of a LLC in New York, you can go to court as a judgement creditor and essentially get what’s called a charging order which means you are essentially getting the court to order of the LLC to sort of be dismantled and you are getting payed through the member interest, in Wyoming you can’t do that. You can’t force an LLC to become dismantled so you know, if you are an individual you may have a lot of judgement creditors out there, you know you are more protected in Wyoming because even if you are sued in New York, because the corporate entity is in Wyoming, it’s gonna be Wyoming state(—) and they don’t allow charging orders.
Daniel Gershburg
I’m actually learning in my own podcast. This is awesome and pathetic at the same time.
Neelam Singh
Last thing I wanted to sort of touch point with you is the relationship, so again, we work on a lot of these things together and we get to work with a lot of different people. Talk about the relationship that you build with clients and why is kind of advantageous to someone’s that’s starting up a business. It’s so rare to have a resource anymore right? where you can have someone say “Hey, what’s the story with… if I wanna expand and bring on another member or you know “do I have some rescue?”. Do you typically get in these sort of relationships with your clients where they come to you later on and talk to you about these things and again, talk about maybe the advantages of having someone to turn to versus this kind of piece meal approach and yes! saves you money upfront and
Daniel Gershburg
I’m not just saying legally, but also generally there’s a lot of services out there, versus the things that a lawyer, a good lawyer that doesn’t charge and can save them out can actually provide.
Neelam Singh
So, I came from a midsize firm, as a litigator for 5 years and then I moved to the transactional side of things and one of the biggest frustrations was seeing what we build out for start-ups to sort of get their business operating. So, before a business even started operating, they were sort of in legal debt. So I sort of branched on on my own, with the specific intents and motivations that I set myself up off counsel for those companies that can’t afford to have their own legal counsel department, their own in-house department. So I truly view myself as a corporate and business clients as off counsel to them, meaning ok you may not have the money to have your own internal legal department team but at least there’s someone you can things off to. So, I’m very available to my clients and my clients they might have retain me to draft a specific agreement but more often times than not we are also communicating and advising them on employment issues, labor issues, intellectual property issues, and it is something very beneficial and it’s only during these conversations that you have via telephone that sometimes you pick up on things as an attorney, as you are supposed to do that the client may not even won’t even need they know so they are talking to me about their business operations and saying wait wait wait, you registered yourself here, did you do this? and that sort of I think a telephone conversation facilitates that sort of thought process.
Daniel Gershburg
Yeah, and I think again just going back to mitigating risk, that’s stuff a typical person will maybe go to Google, and search engines, do I have to register for this or anything else? and probably get bad advice, or probably advice that’s not sort of right on the money and they may expose themselves to certain liabilities to save literally only a couple of 100 bucks, when it comes to that stuff so I think, again, one of the reasons with this was because I see so much these days about you know, how laws are being commoditized and how there’s better solutions out there and yeah, for certain people that they are starting up their LLC and they are a single member LLC and there’s no money in the bank, they want to be a Dj and they just want an LLC cool, if that works for them, awesome. But there’s an inherited you know, over the past year I’d been thinking more and more about inherited value in what we do and how we charge and who we are and connecting with people and establishing those relationships so I think one of the reasons I wanted to bring you on was sort of to discuss that and to break this kind of ridiculous notion that you know, you are just paying for nothing; you are paying for a bunch of forms that you can get online. The forms are the least of the things that we really provide, right?
Neelam Singh
And just to kind of end with this, I think when people go to legal zoom often times they have in mind lay people as lay people what their legal needs are and legal zoom is just helping them implement that. That is a complete different dynamic than speaking to a licensed attorney, because the attorney who knows the law that’s really reliant to the client what they need and the order of how they need things. So, it’s little bit… you definitely get more for your money, when you speak to an actual attorney. There’s no doubt about that.
Daniel Gershburg
You know what I’m saying? you are my favorite. Thank you for coming on today.
Neelam Singh
Thank you.