Author Archives: Anne

Entrepreneurs and Attorneys: Communication in the midst of high stakes

As attorneys, effective communication with a client, or lack thereof, can make a huge difference in representation. In my experience as a law student interning in public interest law, the recognition that clients are often experiencing trauma in their lives when they seek legal counsel is important when approaching their cases; a client’s mental health and emotional state can be key pieces to the puzzle of representation, and can particularly impact communication. However, this dynamic is not limited to tumultuous custody battles or contentious divorces. Anytime a person is experiencing stress, it can be expected that such stress will impact their ability to articulate and understand communications.

Communication

“Communication” by P Shanks is licensed under CC BY-NC 2.0

An article titled Communication Under Stress explains, “The process of forming speech is actually quite complex…while this process is generally smooth under normal circumstances, stress and duress can significantly interfere with the process… When it comes to getting your words out and even how you interpret the words of others, your mental and emotional state is quite significant.” Put simply, stress complicates communication.

Although a hyperbolic juxtaposition of legal specialties may consider representing an entrepreneur to be “only about money,” or in some way a field where client emotions play less of a role than others, the stakes to the entrepreneurial client often also require an awareness of their mental health to adequately represent their interests.  As Kerri Nottingham writes, “Certain legal entanglements are overtly stressful – being sued, being the victim of a crime, being responsible for high-stakes contract negotiations – but even seemingly ordinary tasks with very low levels of complexity can induce negative mental health outcomes for some clients.” Simply meeting with an attorney can cause stress for some clients, and if the client is already facing many stressors, it is important as an attorney to recognize this and the obstacles it may present.

The stress and high stakes for many entrepreneurs correlates with mental health outcomes. A Forbes article by Dan Murray-Serter, Why Entreprenuers Need to Talk about their Mental Health, discusses a study by the National Institute of Mental Health which found that “72% of entrepreneurs are directly or indirectly affected by mental health issues compared to just 48% of non-entrepreneurs.” Despite all the confidences presented by an entrepreneurial client, they may be struggling. As an attorney, it is not only important, but also potentially required by the Model Rules of Professional Conduct, to be aware of such considerations.

ABA Model Rule of Professional Conduct 1.4 lays out some very basic rules for communications between an attorney and their client. Among these, 1.4(b) maintains that “A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” This rule requires that attorneys explain legal matters so that a client can make informed decisions. Even without a formal mental health diagnosis or questions of capacity, the client’s mental health or emotional state may need to be considered while explaining legal options.

MENTAL HEALTH AWARENESS

“MENTAL HEALTH AWARENESS” by Chloe Capture is marked with CC PDM 1.0

One specific example to consider is imposter syndrome. Ann Vertel asserts “Imposter syndrome is real. It tends to affect high-achievers more than any other psychographic — especially women — and includes creatives like inventors, founders and entrepreneurs. When it hits new business owners, the effects are both subtle and powerful, causing them to doubt their accomplishments and preventing them from taking necessary risks.” While the role of the legal profession is not to provide mental health services to clients, recognizing potential obstacles for clients, such as imposter syndrome, can help when explaining legal options for their business. Especially in difficult times, such as now, when 43% of businesses have closed at some point largely due to COVID-19, an entrepreneur needs an attorney who can explain complicated legal options through the stress and pressure so that those business owners can make an informed decision. (The impact of COVID-19 on small business outcomes and expectations | PNAS) One article discusses that even when an attorney cannot alleviate a client’s stress, they can help not add to it by practicing clear communication, setting expectations, practicing responsiveness, and having a welcoming environment (Seven Ways Lawyers Can Reduce Clients’ Stress – Attorney at Work) And, no matter how much money a client has, it is always a good idea to know a mental health services provider in your area that you can tell a client about if their specific situation potentially necessitates such resources.

In conclusion, practicing with an awareness of the client as a whole is important in all fields of law, and can have potential consequences ethically and legally as an attorney. While being an entrepreneur can be difficult, it is also important to remember that work is often an exciting passion for that client, and that an awareness of these issues does not mean walking on eggshells or coddling a client; rather, it means overcoming the communication obstacles presented by mental health and emotional challenges, enabling the client to pursue their goals with a full understanding of their options, and sorting through and simplifying the legal stresses of their passion.

Inspired by my peer reviewer, Aaron Holland’s key takeaway section…

Key takeaways for entrepreneurs: Being an entrepreneur can be exciting and fulfilling…it can also be very stressful and correlates with mental health challenges. Take care to reach out to a healthcare professional as needed and if you don’t understand something that your attorney explains, always ask for clarification. Not only is this important for you as a person, but also can have drastic impacts on the success of your business!

Key takeaways for attorneys: Don’t assume your entrepreneur client is an emotionally void case – the stakes can be extremely high for the entrepreneurial client, and it is your ethical duty to explain things so that they understand their options. Make sure you are keeping your client informed and updated effectively, and be aware that no matter how sophisticated a client may be, mental health and stress can pose a barrier to communication with anyone.

Not a lawyer,

Anne

 

Works Cited:

Bartik, Alexander W., et al. “The Impact of COVID-19 on Small Business Outcomes and Expectations.” PNAS, National Academy of Sciences, 28 July 2020, www.pnas.org/content/117/30/17656.

“Communication under Stress.” HPRC, www.hprc-online.org/social-fitness/teams-leadership/communication-under-stress.

Murray-Serter, Dan. “Why Entrepreneurs Need To Talk About Their Mental Health.” Forbes, Forbes Magazine, 9 Oct. 2020, www.forbes.com/sites/danmurrayserter/2020/10/04/why-entrepreneurs-need-to-talk-about-their-mental-health/.

Nottingham, Kerri. “Lawyers as Counselors: Preparing Law Students and Practitioners to Face Clients’ Mental Health Concerns.” Campbell Law Observer, 15 June 2019, campbelllawobserver.com/lawyers-as-counselors-preparing-law-students-and-practitioners-to-face-clients-mental-health-concerns/.

“Rule 1.4: Communications.” American Bar Association, www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_4_communications/.

“Seven Ways Lawyers Can Reduce Clients’ Stress.” Attorney at Work, 24 June 2019, www.attorneyatwork.com/seven-ways-lawyers-reduce-clients-stress/.

Vertel, Ann. “Don’t Let Imposter Syndrome Derail Your Business.” Entrepreneur, Entrepreneur, 11 Sept. 2019, www.entrepreneur.com/article/337342.

About the Author: Anne is from a big family in the very small town of Meadowview in Southwest Virginia. Now in her third year as law student at Penn State Dickinson Law, she is currently studying to be an attorney and will graduate with a JD and certificate in Health Law May 2021.

10 Basic Legal Considerations of Starting a Business

Scales Of Justice 

If you asked me a few weeks ago if I knew any entrepreneurs, I would say…maybe that guy from college who allegedly “sees Elon Musk at work…” However, since then, I have by a series of serendipitous events (and law school requirements) found myself enrolled in a course on creating a company, cunningly called Company Creation.  So far, I am loving learning about these new-to-me legal topics and have compiled a few legal concepts that are good for someone starting a business to know.

The following 10 questions should be explored by anyone starting a business.

  1. Are you still spellchecking entrepreneur?


photo courtesy of photos-public-domain.com

Understanding new terminology will go a long way when you begin making decisions about your business. A good beginner’s list and some examples from Entrepreneurship Law: Company Creation by Professor Samantha Prince to research includes:

Sole proprietorship: This is a single owner business with no formal filing of organization. This is a risky option because you are the business, and your assets are the business assets.

Corporations: A corporation is a “separate, distinct, organization.” Contrary to common belief, or at least to my preconceived notion, even one person can make up a corporation. Although you may want “to keep things simple,” a corporation might be an appropriate option to consider because of the protection is provides.

Limited Liability Company: An LLC may be a good option for getting your business started; however, this “hybrid between a partnership and corporation” should be thoroughly discussed with counsel to avoid unexpected tax consequences.

Understanding what these mean and how they differ will help you choose the best entity structure for your business from the start. For more information, visit:  Entity Types – Entrepreneurship Law: Company Creation (unizin.org)

  1. Who makes the law?

There are many sources of law you have to comply with as a business owner. Agencies, often called the “fourth branch,” have regulations for nearly everything. From the USDA and honeybees to the FCC not letting Eminem be, every business is in one way or another affected by agency regulations. Federal agencies, state agencies, legislators, courts, local governments, and more all have laws and policies with which you will have to comply.

  1. How do you feel about your name being public?

Different states approach privacy of business owners differently. In Pennsylvania, when you register a business, your name is publicly associated with that business. If your business is controversial to the community, evaluating how your state approaches privacy for business owners is a crucial consideration.

  1. Where are you?

photo courtesy of clkr.com

More importantly, “where,” is your business? You have probably heard that businesses favor Delaware; there’s a reason for this! Delaware has a Court of Chancery that provides business with predictability because disputes are adjudicated by a judge rather than a jury, which are inherently unpredictable.  If you haven’t read about any controversial things lately, you can search online whether or not shell companies in Delaware are a plus.

  1. What kind of reputation do you have?

When you decide what to name your business, be wary about using your own name. While it is doubtful anyone is starting a business with the expectation that it will fail, it is important to prepare for the possibility. Protect your reputation and opt not to share your family name with the business name. This can be important not only personally but also for future business endeavors.

For more information, visit: What Percentage Of Small Businesses Fail — And How Can You Avoid Being One Of Them? (forbes.com)

  1. Can you make your mark?

Trademark protection, state and federal, is one way to build stability and protection for investors, including yourself. Registration provides your business with a handful of benefits, including protection from “copycat,” imports and the presumption of notice for anyone who begins to use your mark after you have registered. Basically, this means the law will be more on your side if someone tries to copy your business. And, you get to use a little ®. For more information, visit: Trademarks | USPTO

  1. Is licensing an option?

If your business is centered around an invention, you will likely want to take steps to patent it. For instance, did you think of a new bottle with a detachable pacifier? Great idea! Parents everywhere will thank you. Once you have secured intellectual property rights to your invention, as Christopher Hawker writes on Entrepneur.com “Leverage the success of an already established company…” For more information, see: Why Licensing is the Best Way to Get Your Product on Store Shelves (entrepreneur.com)

  1. What assets do you have behind the veil?

Piercing the veil is when a company has a judgement against it and the courts go after the personal assets of the owner (i.e., your family home, car, maybe even that fancy new desk chair you bought to work from home). This is why it is critically important to structure your business in a way that protects you personally.

Photo courtesy of Wikimedia Commons

  1. Do you have an accountant?

To be honest, I would be completely out of my league to explain the best way to “do your taxes.” But, I can be cliché and say do your taxes and do them well. For your business, this likely means finding an expert in business taxes. You should look into this before starting a business, as your lawyer will be able to explain much better than me which entities have what taxes.  Which brings me to my final point…

  1. Do you have a lawyer?

Lastly, find an attorney to help navigate all of these considerations. Many laws are applied by default to a business that starts without filing or establishing their entity through formalities. If you are thinking about taking the big leap to becoming an entrepreneur, seek the counsel of a seasoned business attorney. Your counsel will be able to talk through your goals and options to find out what the next best steps are.

Not a lawyer,

Anne

Sources:

“Antique World Map Clipart Image.” CLKER FREE Clipart, www.clker.com/clipart-657793.html.

Arnold, Karen. “Scales Of Justice Free Stock Photo – Public Domain Pictures.” Free Stock Photo – Public Domain Pictures, www.publicdomainpictures.net/en/view-image.php?image=72186&picture=scales-of-justice.

Hawker, Christopher. “Why Licensing Is the Best Way to Get Your Product on Store Shelves.” Entrepreneur, 30 Dec. 2013, www.entrepreneur.com/article/230557.

Otar, Chad. “Council Post: What Percentage Of Small Businesses Fail — And How Can You Avoid Being One Of Them?” Forbes, Forbes Magazine, 21 Aug. 2019, www.forbes.com/sites/forbesfinancecouncil/2018/10/25/what-percentage-of-small-businesses-fail-and-how-can-you-avoid-being-one-of-them/.

Prince, Samantha. “About This Book.” Entrepreneurship Law Company Creation, psu.pb.unizin.org/expsk909/front-matter/about-this-book/.

“Trademarks.” United States Patent and Trademark Office – An Agency of the Department of Commerce, 27 Jan. 2021, www.uspto.gov/trademarks.

“Words Picture: Free Photograph: Photos Public Domain.” Words Picture | Free Photograph | Photos Public Domain, www.photos-public-domain.com/2011/09/22/words/.

About the Author: Anne is from a big family in the very small town of Meadowview in Southwest Virginia. Now in her third year as law student at Penn State Dickinson Law, she is currently studying to be an attorney and will graduate with a JD and certificate in Health Law May 2021.