Welcome to Episode 71. I invited Ryan Lisk, Founder of Hybrid Legal, to talk about why it’s important to cover yourself legally when growing an agency.
We chatted about:
- some of the risks agencies take by not having the right contracts in place
- the different legal areas agencies need to pay attention to at every stage of their growth
- and he also shared examples of how easily you can leave your agency business exposed when you don’t cover all of the most relevant legal areas.
If you have any questions or doubts that you might not have all of your legal bases covered in your agency, then please do contact Ryan via LinkedIn or his website.
And as we’ve been talking about risk, if you want to reduce your client relationship risk, and would like to talk to me about account management training, then you can find out more on the Training page.
Transcript:
Jenny 00:02
So today’s episode is with Ryan Lisk. Now Ryan is the founder of Hybrid Legal, which is a company that provides legal advice to business owners. And the reason I’ve invited Ryan in is because he does so much work with agencies. So he has loads of experience working with creative agencies. And he’s so familiar with the typical legal areas that can trip agencies up. So Ryan, welcome to the show.
Ryan 00:31
Thank you very much, Jenny, for the very kind introduction, and also for having me on your show. I’m really looking forward to the conversation we’re about to have.
Jenny 00:39
Me too and when we had a conversation last week, Ryan, I was so struck by the detail that you gave me, I thought, I can’t believe that there are not quite a few agencies out there with the same problems. So I’m excited about getting into these questions as well. So let’s start off just with why did you start the company? Why did you start Hybrid Legal?
Ryan 01:02
So I started, when I recognised when I was studying law at uni, that there was a real challenge with helping business owners with affordable legal services. And the reason why I knew that at quite an early stage when I was studying was because I was helping a startup business with all of their legal work, they couldn’t afford the advice from a law firm, they found law firms quite difficult to approach. And when they were quoted certain fees, it was just unreachable for them. So they used me, somebody that wasn’t qualified, didn’t really have much experience at all. But, they still thought, ‘You know what, we’ll have a go with Ryan and see if he can help’. And that was really where it started. Because it taught me very quickly how law is applied in practice for a busy business that’s growing. And I really enjoyed it. And then it wasn’t until I was looking to go on and do a training contract that I was working for a bigger regional law firm part time, and I absolutely hated the culture. And that’s where I saw a big difference between working for a business that’s hungry to grow and then working for a traditional law firm, where the cultures were very different. And I thought, there’s got to be a way of offering something in the middle, which helps these business owners with affordable legal advice, that’s easy to understand. And also doing it in a way that’s going to be more fulfilling for the legal team as well, because a lot of the lawyers that I was working with were really unhappy with the profession. And I won’t bore you with the details of that, but I thought, you know what, I’m going to have a go at doing this myself and founded Hybrid.
Jenny 02:52
And just give us a flavour of the types of clients you have on the agency side, but also how you how you work differently to perhaps the kind of firms that you were used to working for?
Ryan 03:08
Sure, so in terms of the types of agencies, we work with agencies from quite small social media companies through to specialist software development houses, right through to PR and global communications businesses. So the range of agencies really does vary. And in terms of what are they using us for? How are we working with them that’s different to other law firms? The main pull for them is our subscription model, where they’re able to outsource their legal support to us, we become their legal agony aunt for want of a better word, and they’re passing us a whole number of things frommaster service agreements they might currently have, they’re just horrible when they want them completely stripped down into a format where it’s nice and easy for their clients to understand, but it still protects their business, through to dealing with freelance agreements, helping with intellectual property, and protecting different forms of intellectual property. It might be specialist licence agreements, if they’re developing an App, for example, we might be working on things like that. Or it might be the more day to day HR and employment queries of their team that they need our support with. And they’re able to do that with us by paying a fixed monthly fee, which gives them that legal support. So they’ve already got it budgeted for so they’re not really receiving any unexpected bills, but we do work with a number of agencies as well on a pay as you go basis where we’ll just scope them, quote, depending on what it is that they need, and they just pay as they go along. So I think the big thing for us has been being transparent with fees, being very upfront about fees, helping an agency understand whether they can invest in our support, whether it’s the right stage or not to invest in that kind of support, and if they are have we made sure that we take the time to really get to know them and give them a solution that works for their particular business rather than using a cookie cutter approach. So yes, I hope that that answers your question?
Jenny 05:11
Spot on. And I also forgot to say at the beginning, actually, that I’ve seen lots of compliments about working with you from the likes of Spencer Gallagher, who’s obviously introduced you to the Agencynomics community, and just some really great feedback. So you’re whatever you’re doing, you’re doing it really, really well. And obviously, I think for me, that sounds like a fantastic way of going -subscription model or pay as you go. It sounds very flexible. So if there’s someone listening, that’s growing an agency, or if you’ve got any advice for the key areas, they need to be considering from a legal perspective, like when they go from maybe a one man band, or maybe two or three, and then jump to maybe a 1 million turnover, and then a 5 million turnover. What would you, is there any kind of grading of legal matters that you think are more pressing at each level?
Ryan 06:13
So that’s a really good question. I think I like the idea of breaking it down with the journey of a newly formed agency through to its growth, and then through to potentially an exit. So I would say that, when the agency starts, it’s a really good idea to invest in a suite of contracts, which sounds like a massive turnoff, I appreciate it, you’ve got contracts. You’ll say I’ve got more things to invest in, rather than bloody contracts. But the truth is, you can get contracts cost effectively, particularly in startup phase. And you can look at templates online as an example. It’s not one that I always recommend. But if you really must, and you really have to, and budget is very tight, then have a go at looking at some templates online and what I mean by templates in that suite of legal documents, definitely think about the contract you’re going to have in place with your customers. Because when you start out, you’re going to be defining your fee on what your proposition is going to be. You think you’ve nailed the proposition but even as a non marketeer, I know for a fact that in five year’s time, your proposition is going to be very different. You would have learned some lessons along the way, you would find out what works and what doesn’t, you’ll pivot a few times, so I would definitely have a sensible contract to begin with, that covers you for what you’re going to be providing. It doesn’t need to be ‘War and Peace’. I think the key things that you need to be thinking about is making sure your client’s going to pay you, making sure that if you’re going to rely on your client to deliver content, make that really clear that it’s an obligation of theirs. Because I think the big thing, for web development agencies in particular, would be clients getting upset when delivery deadlines are missed. But of course, there’s always two sides to every story. And it’s usually because the client has delayed on providing key information, which has enabled the deadline to be pushed, but of course, they conveniently forget that. So I think really looking at your scope and quote document how you’re managing expectations and how you’re communicating very clearly with the client. This is what we’re going to commit to, we’re going to commit to delivering this particular piece of work that you’ve asked us to do to a really good standard, following the brief that you’ve given us, I think, really important you get a detailed brief from the client if you can, but this is what we need from you. And we need you to commit to paying us on time, because we’re going to work hard for you. So really making sure that you making that nice and clear. And any additional obligations, like the example I mentioned a moment ago, such as right, we’re going to need you to provide this kind of content in order for us to actually continue the development of the project. Make sure you spell that out to them. Because I think the clients are very similar to the types of clients that we work with. They’re busy business owners or business leaders that are seeing you as the supplier, you are just a supplier to them. You are the means to an end to fix a particular problem before they move on. So they’re really busy. And it’s just making sure that you’re super clear about it. And you talk about this a lot actually, Jenny, obviously, when you coach the account managers on what to do. So I think that that dovetails quite nicely, but I would definitely say the client agreement will be key. I would also, if there’s going to be more than one of you starting this business, which there often is, do the shareholders agreement. I think that’s a big one. You know,
whether you’re going into business as a limited company, and there’s going to be more than one of you or you’re going in as a partnership, get your partnership agreements or the co-founders agreement. There are differences but I would just think about the contract that will go in place between you and your business partners, particularly while the sun is shining, because when it starts chucking it down with rain, you don’t want to be up on the roof trying to fix it , that is horrible. And it can be really messy. So I would say that think about eventualities such as, right, what happens if you want to bring on another investor or a shareholder, another director to the table? How will that work? What if one of you isn’t happy with that? What about if one of you in the future has a change of heart? We’ve certainly seen over the past few years with the pandemic, there’s been a few epiphany moments where people have had that time off to reflect and they’ve kind of thought, actually, this isn’t for me, I’m going to go a separate direction.
And I mean, whilst quite a lot of people can resolve it on a handshake, because they’re in a good place, actually if you’re not in a good place, and you do have a difference of opinion, having a nice legal contract that commits both of you to having a discussion in a particular way, and agreeing to certain processes to follow, when it comes to things like valuing the company, that’s a biggie, and how you exit, and when you can exit, I think those are really key points because one person’s value can be very different than the other person’s value, depending on what side of the fence you’re sitting on. If you want to leave, your value is usually going to be much higher than the person wants to stay. So it’s just making sure that that’s fairly balanced. Which again, if you get decent advice, with your shareholders agreement, your co founders agreement or that partnership agreement, they’ll talk you through how you can go about that. So that’s, I would say, probably one of the biggest things to do when you start out. So the next thing to look at, with that suite of contracts giving you that good legal foundation, would be the contracts that you have in place with any freelancers or contractors that you might be bringing on to help with projects. Because if you’re at an early stage, you might not have the cash flow at the moment to bring on employees on payrolls, you might just be using contractors every now and then that have a specialist skill to help with that particular project. I would definitely not lose sight of the importance of having an agreement in place. It doesn’t need to be a turn off, it can actually be something that gives peace of mind to the freelancer, as well as yourself. And also the client as well, because there are some clients that are not happy with freelancers being used, but others that are so, again, you don’t want to trip up there, it’s quite an easy mistake to make. So
I would just make sure that when you’re working with freelancers, during those early stages, you’ve got the fundamentals covered. Their concern is being paid on time, and that their time is going to be respected. Your concern is making sure that they’re going to deliver on time to a really good standard, not embarrass you in front of the client and most importantly, they’re not going to run away with the client or be difficult generally, in the future, particularly with things like confidentiality. So it’s making sure that you’re dealing with those points, as well as intellectual property ownership as well.
Because if you have a freelancer that’s created something bespoke, that’s specific for that particular project and there’s a form of intellectual property that’s been created that’s capable of actually being owned by the client but there’s no clear paper trail to document then it can be really messy in the future, when one day your client wants to sell the business or raise investment and the due diligence takes place and they knock your door to say, can you just talk us through this particular project that you worked on, where the intellectual property sits for this particular piece of work, we just need proof of ownership. And you shrug your shoulders and say, ‘Oh, that was done by you know, so and so a couple of years ago a freelancer’, and they’re on a beach in Mexico smoking a cigar. It just doesn’t look professional. Whereas if you’re able to say yeah, that was so and so’s project, here’s the contract which confirms that they agreed to assign all of the rights in that project to us once we had paid them. And we in turn, have agreed to assign all of those rights to your client, once they have paid all of the money due, so you can see the nice, beautiful trail here. So that is a really good thing to put in place now. And the investment that you’ll need to make in that simple process will probably be much less than £1000 if you do it right, compared to if you have to knee jerk it when the client knocks the door asking about that trail and you’re then scrambling around thinking oh, God, I now need to try and play this tactical game of negotiation with the freelancer, that it’s not worth anything but actually could be worth a fortune but equally it can be a good opportunity for the client as well which we’ll come on to later on during this conversation. But I’m going to pause there. Is that all making sense so far?
Jenny 14:56
This is fantastic. And I’m sure loads of people are thinking oh I’ll have a look at my contracts and see what I’ve got in there. Just one small question. You mentioned some clients don’t like you using freelancers. Do you advise agencies always to bring that up? Because surely there are some freelancers that get used at the last minute, and you wouldn’t necessarily draw that to the client’s attention. What’s your advice on that?
Ryan 15:27
So my advice on that specific question is, just make sure that you read the terms in place between you and your client very carefully. Now, the chances are, if you’ve put your own terms in place, and you’ve had them drafted properly, it will enable you to use a freelancer whenever you like, so long as you obviously have a suitable agreement in place. And you can answer to the same obligations that you’ve agreed to commit yourself to in the contract with your client.
The problem starts to unfold when your client is a nice big client and has their own master service agreement or framework agreement, where they want you to sign up to it. So I won’t name any particular big names, but there’s a number out there where when you dig into clause 38.6, paragraph B, it will say, and by the way, subcontractors are not permitted without the prior written consent of the client, and that’s the kicker. So you then have to flag that clause, get the prior written consent and go to your main lead project manager with the client, your main key point of contact and say, right, we need to bring on a specialist third party, are you happy with that? And the chances are, they’ll say, Yeah, that’s cool, we just want the project done to a good standard. Make sure you’ve got that documented, put it in the file along with all of the other materials of that project and tick job done. But when you don’t do that, that’s when it can be really slippery.
Jenny 16:56
Fantastic advice. I’m actually thinking about it now. I mean, I’ve known examples of very small agencies, like agencies that are just starting that managed to land a PLC as a client. And inevitably, like you said, the client in that scenario typically creates and gives you the contract to sign and it would be, I can’t believe that any agency wouldn’t get it looked at legally. I mean, I hope that they wouldn’t try to do it themselves. Because, I mean, it’s legal speak isn’t it and we’re not used to that.
Ryan 17:27
Yeah, you will be amazed at how many put their head in the sand and just sign it off and wing it! It is quite worrying actually, that certain, and not just agencies either, I’m not just talking about agencies, but
I think businesses in general, they seem to, they seem to lack the acknowledgement of how important contracts are, particularly on a business to business relationship, because the contract is usually what it says when you’re in the B2B arena. When you’re in the B2C arena, obviously, you have consumer law in place to protect you as the consumer. You can buy something online and return it whenever you like, within 14 days. You have that protection, regardless of whether it was mentioned in the terms. But when you’re dealing with another business, you need to be really careful with what that contract says. And there’s some really good examples over the last decade or so of big companies sort of got it spectacularly wrong.
I mean, a really good one is I think it was the Jet2 case with Blackpool Airport. And they were having a dispute over what was actually meant by best endeavours and reasonable endeavours. And to cut a very long story short, it’s worth looking into this case separately, just in terms of why you should always check your contracts. Blackpool Airport originally agreed when Jet2 were first starting out, they would essentially help the airline get their feet on the ground. They would give them nice timetables to bring their flights in and out. And they were operating outside of normal business hours for quite a considerable period of time. To the extent that I think the FD kind of saw it and thought, this is not looking good. We’re trading at a significant loss now by keeping our opening hours out late just to facilitate the Jet2 popularity. So where they essentially said to them, right, we love your business, but we need to actually go back to normal nine to five operating hours. And if you want to operate beyond the usual operating times, you’re going to need to pay extra for that because we’re trading at a loss. And Jet2’s lawyers were like, “I don’t think so here’s a contract here which has said that you will use your best endeavours to promote the success of our airline. And we believe that that means that you will open your airport beyond normal operation hours to encourage us to succeed”. And of course, Blackpool Airport completely disagreed with that point and said “there’s no bloody way that that’s what it means” and they went to court, and sadly for Blackpool Airport the judge confirmed that actually, had you put reasonable endeavours, you’re absolutely right Blackpool Airport normal operating hours would have sufficed, but because you said ‘best’, that means you have to go above and beyond, even if you trade at a loss you must go above and beyond. So that was a real stinger for the airport and a great win for the lawyers at Jet2. And just words, just the slip of the words, that can be really tricky. Now that’s quite a big example, and I’ll give you an example later on, as well, of areas where agencies can easily avoid legal traps, what to look out for. So we’ll come back to that later.
Jenny 20:55
Great. I mean, this is really good stuff. And like you said, the wording is just going to have such a bearing on it as well. So, we’re talking about agencies who are starting out, you’ve talked about the client agreement, we’ve talked about making sure that they have shareholder agreement in place and the proper legal structure also, if using freelancers and contractors. So that’s brilliant. So what about when they get a little bit bigger? Or progress even further? What other legals?
Ryan 21:24
Yeah, this kind of loops back to my comment earlier about, they’ll start on day one with a particular vision. And then in five years time, they would have been on a journey, both from an internal culture perspective, with staff that may have joined and then left and they’ve learned some lessons, through to right, we’ve worked with that dodgy client got that spectacularly wrong, let’s pivot and offer this as a proposition, or that market’s now dried up, let’s do this. So there would have been a lot of changes since that early day of using the suite of contracts. So now is the time to actually revisit your contracts. Actually looking at right, do these still work for the agency, in terms of where it is now and where it’s going to be going when it reaches the million mark and beyond. So it’s a good time to check in again on process, list out the mistakes and the challenges and the near misses because, chances are, you may have had a fabulous time over the last five years or so. But you may have had a few near misses where you thought God, we got lucky there. And we usually want to know about all of those. So we can then think about how can we cover those off fairly in the agreements, whether that’s with the employees, or whether it’s with the client, the suppliers, you’ve got five years worth or so of data there that is really helpful when it comes to reviewing your existing processes. But when you’re at that point, you’re usually going to have a little bit of a headcount, you’re going to have a handful of staff. So again, making sure you’ve got some good policies and processes in place, and you’ve invested the time to speak to an expert, just to give you the rubber stamp of approval on what you’re currently doing. That’s definitely key. And at that stage, you might also have retainers in place for clients as well, you might have suffered your first couple of cases of scope creep. Again, it’s looking at, right, well, what can we do now to just make sure that’s covered off? And you might have had a few data protection, near misses as well with subject access requests, maybe a breach, who knows? Hopefully not, but it happens, so again, it’s a brilliant time to sit down and review the structure ready for when you tip past the million mark.
Jenny 23:38
Amazing. And then following that, do you also help with exit? Do you do you get involved from an exit perspective?
Ryan 23:47
100%. We love it. I mean, we love working with agencies of all sizes. But it’s lovely to be able to help an agency sell the business, they’ve worked really hard, and it’s become a major milestone, usually, for them to say, and not in all cases, in some cases, it can be a bit of a distress, sale or distress merger. But in most cases that we deal with, it’s usually for all of the right reasons where it’s time now to hand over to the new owners. And that’s usually a good thing for the team that’s moving over with them, and also for the owners that are exiting the business. So definitely something that we can help with. And actually it was, it was really nice to be able to attend the Cactus event last week in London, where there were four panellists that had all successfully exited their agencies. And it was quite interesting, because I couldn’t help myself but ask the question of, how did you find the due diligence process? And was there anything if you had your time again, that would have enabled it to go a bit smoother? And there was quite a consistent answer among all of them, which was, yeah, we really wish we got our contract sorted, because there were moments of going through cupboards trying to find paperwork and rushing around and thinking oh shit, we’ve not got these kinds of things, excuse my French. But, they’re thinking of where is it all. And, of course, I smile, because it’s one of those I told you so moments that happens right at the bloody end. So I think for anyone that’s listening to this, that is thinking about exiting in the future, you don’t have to use ours, you can use whoever you like, but definitely invest the time with someone to start getting your business ready from an exit perspective, because one of the panellists actually said that one of the best bits of advice that he could give to the room was build your business so it’s ready to sell, regardless of whether you’re going to sell the business or not, and make it so you can easily make yourself redundant, even if you want to stay working in the business full time. Because if you do that, you end up with a fantastic business. I really echoed those sentiments, there’s a brilliant book about that, as well called Built to Sell by John Warrillow, I’d 100% recommend reading that for anyone listening, that’s growing a business. But I would definitely say a big part of that is getting friendly with a good lawyer that can help you tidy up the state of affairs internally, because it’s not only going to protect you, but the buyers are going to want to see it during due diligence, and if you’re not going to be selling, you might be raising investment, the investors lawyers are going to want to see it as well. Because if you haven’t got it, it’s only going to impact the value that you sell for, or it’s going to create more time, stress and expense getting it fixed. And you quantify that and compare it to the bloody legal fees that you’ll pay for a sensible firm to do it. And guess what’s cheaper?
Jenny 26:51
I mean, it’s an insurance policy, isn’t it, for that piece of business that you have, and also your own business? I mean, there’s so many reasons to seek proper legal counsel, when you are going through this journey of growing your own agency, for all of the reasons that you’ve said, and to that point, without scaring people, you did share a few examples last time of where things weren’t buttoned up legally. And I think this is really valuable for people listening to kind of hear some real life examples of maybe near misses, maybe when it went really badly, just so that they can benefit from someone else’s mistakes.
Ryan 27:29
Sure thing. So I’ve thought about this actually, Jenny, since our last conversation, and there’s three quick stories that I’d like to share with you. The first is about the laid back and disorganised e-commerce agency. The second is about a playground project, and the third is about an expensive copier. So those are the three. So if we start with the laid back e-commerce agency, this particular e-commerce agency were really good in respect of building and developing really nice looking websites, they usually performed very well from an SEO perspective, because they had an absolute wizard in house that was great at SEO and pay per click campaigns. So they kind of traded off his reputation for a good few years. I think they recently lost him actually to a competitor, which doesn’t surprise me in many respects. But anyway, the point being, they were really good. They had, I think, no more than about 20 or so clients they were offering a hosting service to because usually, if you build a website for a client, the chances are you’re going to take care of the hosting as well, usually through something with Amazon, Rackspace, whoever it is that you would use, most are on AWS now. But back when this particular incident happened, it was actually a different hosting provider that I won’t name just to be professional but the incident happened when the web hosting provider this particular laid back e-commerce agency was using they had a major mishap where one of their servers was completely wiped. And that particular server hosted all of the websites that this particular agency was looking after. So of course, anyone that’s watching this will be thinking like, yeah, that’s absolutely fine, because they would have run daily weekly backups of those websites. And that was the first thing that I said when I took the call. And unfortunately not, they had a bit of a blip internally, were very busy, and just hadn’t got around to it. Now most of these things you can automate now, but going back when this happened, I think it’s about six, seven years ago now. I don’t think it was a thing, clearly it wasn’t for this particular agency. So for them, it was a real brown pants moment because their phone was ringing off the hook with the clients whose ecommerce businesses that were their main revenue streams had just switched off. And of course, who are you going to face? You’re going to phone the developer to say what the frick is going on? Can you get it back up within the next five minutes? And of course, they couldn’t do that. So they were saying to me, so where do we stand with this Ryan? I said, okay, so just talk me through the contract that you put in place with them, have we got anything in there, which sets out the scope of your hosting service and liability here, because we know that it’s not technically your fault. It is your fault for being sloppy with not doing backups, however, we’ve got a third party here that’s at fault, so we need to see their service level agreement, they’ve put in place and review to see if there’s anything we can do there. But we also need to see whatever they flowed down to disclaim liability for, I just hope that you’ve done exactly the same with your contracts. And he just looked at me, well, I can just sense a blank face on the other end of the phone. We haven’t got anything in place, we didn’t really think we needed it. Which, my response was, well, look, I think this is very much a case of you need to go and get that goodwill bucket. And you need to start digging deep into that bucket with your clients, and you need to really help them out here. Because I think if they instruct their lawyers, if they take legal advice, they’re going to be all over you. And it’s going to be very expensive. So where your best bet now is to work with them, and come to a sensible arrangement to get their websites back up and running. And do not charge them for the pleasure of doing that because, guess what, you will end up paying a lot more if any one of them gets legal advice.
Jenny 31:58
So, in that instance, where there’s no contract in place, what you’re saying is the client has the upper hand anyway. Because, if there’s an absence of a contract, what does it default to?
Ryan 32:13
So here’s the thing, and it’s a very good question, Jenny. So
in the absence of a contract, you’re then looking at an implied contract. Is there any form of contract that we can see whether it’s via email correspondence, you can even have verbal contracts. But in this case, it was very much proposal documents sets out a nice, lovely hosting service which sets out that they will get back up and they will be hosted for this particular monthly investment to which the client was charging for that monthly cost. But they weren’t delivering what they said they were going to deliver, which was delivering a hosting service that is going to be backed up. So they were in breach of their own proposal, and therefore breach of the contract that was formed between the two parties. So where it was quite hook, line and sinker in that regard.
Jenny 33:05
Wow. Okay, so that was really, so the implied contract, so if anyone’s listening, thinking, actually, we had a verbal agreement to do this, or there’s no kind of written contract, it will always default to the the latest documentation that’s passed by between the two parties. So that’s interesting to know.
Ryan 33:22
That’s right. All of that will be taken into account and that’s why we recommend, another quick tip for any listeners that perhaps are quite laid back with contracts but equally, they don’t want to be held accountable for anything they agree in email correspondence, which becomes even more important when your team grows, and you’ve got account managers that might be selling and promising certain things. Just make sure that you have the golden words in your email disclaimers, as annoying as they may be. Just make sure that you’re saying that anything that’s agreed in email is subject to contract, the word subject and contract really should be appearing in your email disclaimer, because that’s essentially saying that look, what may be agreed in email could be completely different to what the contract says and the contract will take priority. That’s key. But of course, it requires you to have a contract in the first place. So that’s the other kicker. But I mean, in this case, with this laid back agency, they really did deserve to pay out on that because they were sloppy with the service that they were offering, and I think if you’re not offering a reasonable service, there is a risk that someone is going to pull you up on that.
Jenny 34:37
And how much was the liability, did they have to compensate for loss of sales that were..
Ryan 34:42
That’s where it could have gone, that’s where it could have been high risk because consequential losses usually disclaimed in a well drafted contract, you usually have a well constructed limitation of liability clause. You have insurance as well and again, making sure that the professional indemnity insurance you have is equal to what you’re saying in the contract that you’re going to be liable for, if somebody actually has you bang to rights for something. But to answer your question with that particular example, I have no idea how much it cost them in development time in the end, because I know that they bore most of their own costs, were bringing in developers to obviously help bring those websites back up, again, from a very old version. And I know, I think they agreed with some of their clients that they would offer certain forms of compensation by way of free services in the future. So otherwise, I mean, we didn’t take on that client in the end , A) not the sort of business that we wanted to work with. and B), they were in enough financial trouble, they couldn’t cover the fees. And our fees are very reasonable. They’re not unfair, but we gave them the free advice that they needed, which was look, know when to compromise, today’s the day to compromise and actually start negotiating, use that goodwill, and just work with them to get through it. And that seemed to work from what I’ve understood.
Jenny 36:11
It’s funny, because the other day, I was talking to someone, dissimilar situation, slightly similar, where the owner of the business had put an additional clause into the contract they were so overwhelmed with excitement of winning this business, that they were like, 120% guarantee that we were always going to deliver. But something happened and they couldn’t. And this clause was in there, that the owner had put in there to say that they would compensate for the loss of sales, which I think was done in such a kind of a big gesture, because we knew that we would never fail. So maybe there’s, I don’t know if anyone’s listening thinking, yes, we have got excited and put extra clauses in there just because at the time, but things change, don’t they? This is the problem.
Ryan 37:00
Yeah. And that goes back to that question you asked earlier, Jenny, about as you grow as a business, and as you learned things, definitely make sure that you’re then checking your contracts to make sure that there’s no updates you can make, which would counter that problem or that near miss again, in the future. That’s so important. So that was the first story. The second story was with the playground projects, which is one of my favourites as far as demonstrating just how easy it is to get on the wrong side of intellectual property with a client project. So this particular project, it was a branding agency that was working with a local authority, and the local authority had given them the brief, to essentially help them come up with a brand and a concept for adventure playground, in a particular part of the UK. And the client did a really good job as far as the visuals and the concept, the council was delighted with that particular work and delivered the project. And a few months later or so, I think it was about seven or eight months in, the council had just put out the signage in these playgrounds and was starting to really roll it out. And the lawyers for the owner of the registered trademark of the brand that this particular agency had come up with for this project, sent a cease and desist letter to the local authority. And of course, the first thing that local authority did was look at who actually created that brand. It was the branding agency that came up with the name and the concept and slung it over to them and said, What’s this about? And, again, it comes back to contracts. There was no contract in place between the agency and the council, which enabled the agency to have a lovely indemnity in place from the council to confirm that in the event of any third party intellectual property infringement, a council will hold the agency harmless from any costs of that and recognise that it’s the council’s sole responsibility to take what the agency creates and run their own intellectual property clearance checks before using it properly. Unfortunately, that was missing. So it was another pinch point for that particular agency, when it came to obviously seemingly looking to create something that’s now infringed, unknowingly to the agency’s point, but if they had their time again, they would have had a sensible contract, or they would have just done a quick check, quick clearance check for the sake of a couple of 100 quid to make sure that that particular brand isn’t already trademarked. So that was a another interesting clanger that could have been easily avoided.
Jenny 40:04
I think coming up with names and branding is a real specialist area, isn’t it? And, that it goes without saying that you’ve got to do trademark checks and Companies House, making sure there’s no legal entities. But maybe that was just missing or they didn’t, I mean, it was a big lesson to learn wasn’t it?
Ryan 40:21
Yeah, massively. So it can be quite embarrassing as well, personally, when that happens and it is daunting. But I think it’s that classic case of, it’s okay to make mistakes but don’t make them twice, learn from it. And I think with the challenge with legal mistakes is they can actually be quite crippling to a business, they can be quite fatal, particularly from a cost perspective. So that’s why I don’t think lawyers have done a particularly brilliant job over the years of making themselves available and approachable. I think they’re definitely getting better. The profession is definitely getting better in some respects. But it’s got a long way to go. And I think that’s part of the reason why we see such a cavalier approach from businesses – they think, Ah sod it! I’m not going to take legal advice I’m going to do it myself. And then it can go wrong.
Jenny 41:14
I just want to add to that story a little bit, Ryan, because I’ve obviously been working in agencies for like 30 years, and we’ve had legal problems with actual taglines, colours, shapes. So it’s not just the word of the brand that’s used, the brand name, but there’s all sorts of elements that are also already covered. And even a friend of mine was working in the UK, but he had a cease and desist about the tagline he was using, from the US, from a US company. So if there is a branding agency listening, should they be thinking about also territories as well, where they’re going to be used where the clients proposing to use this brand in different territories?
Ryan 42:05
100%! Yeah, I think if you’ve got a client that’s thinking about using the brand outside of the UK, where they might have a quite a strong presence, or they want to explore a presence in the US, for example, or Canada, then I would definitely say it’s a good idea to suggest to the client that they invest in a clearance check for that particular market, just to make sure that the tagline or the name, or even the logo device itself, any kind of symbol devices that are going to be really inherent to that brand, you’re just running a check at the start just to make sure it’s okay. Because if you think the UK is quite contentious, over in America it’s a whole new ballgame over there. But I don’t mean that disrespectfully, I just mean that they are on it, they are really on it, they take it very seriously. And they are not afraid to take action. So it’s definitely worth being thorough. It’s actually the investment of doing those checks versus the cost of if it hits the fan. Like you said earlier, it is like insurance.
Jenny 43:17
Yeah, yeah. Okay, and what about your third example?
Ryan 43:22
The copier, so I’ll make this one quick so I’m obviously conscious of your time. But the copier, again, is another lesson that the ultimate lesson is, please, please, please read your contracts. If you can’t be arsed to read them, give them to somebody else to read before you sign it, because this one was a really good digital marketing agency based in central London, and one of the directors, a couple of years ago, couple of years before COVID kicks off. They signed up to a lovely printing unit to be positioned in their office, you know, so it did all sorts of prints and a managed print contract. And of course, COVID, everybody worked remotely from home, they had this gorgeous office collecting dust with a very expensive copier that they could see going out on the P&L every month. So they thought you know what we’ve kind of moved on from relying on that printer we’ve adapted. We’ll give the company a call just to say, can you come and pick it up and take it back because we’re going to move office and downsize? And when one of the directors phoned the managed print company to say, look, can you can you come and collect it they said yeah, of course, but you’re only, you know, halfway through the term of your contract, you’re going to have to pay for the remaining term of the contract. Plus, you’re going to have to pay for the collection fees, and any refurbishment fees that are going to be needed to that machine as well. So we’ll send you an email once we’ve totted all of that up. And he was like, right, okay, fair enough, send it through. They sent it through a few days later. And it was to the tune of just under £8000 that they wanted in the end, it was extortionate, it was a real long term contract. It’s one that we’ve seen before. Unfortunately, in that industry in particular, they have these horrendous contracts, they will sign businesses up to that will stand up legally. Unfortunately, there’s not much wiggle room. And they know that. And they’re very tricky with automatic renewals and also long term contracts, price rises, and hidden charges that are in the contract when you take the time to go through it all. But of course, at the time that you want that printer, like this particular client, it’s usually at a time of need, you’re busy, you just want it done quickly, the salesman has done a fabulous job of selling the dream and how this is going to achieve everything that you ever wanted to you’re like, yes, sign me up, you’ve been recommended by a friend, you must be amazing. And then when you want to leave, the reality kicks in, and you’re like, oh, I don’t quite like you as much as I thought. The relationship changes and in the end, we managed to negotiate it, they still had to pay. And it was £1000s still, but it wasn’t £8,000. But they still had to pay and it was really bloody annoying for them. And I felt for them. So I think the learn there is, if you can, don’t commit yourself to silly long term contracts. And when I mean long term, if you can avoid two years, avoid it, I think six months a year, two years maximum. That’s it. Don’t go any higher than that, depending on what it is, of course, but we see HR contracts, we see telecoms agreements, managed print service agreements, which can go five years, seven years, eight years sometimes, but they dress it up in months to make it sound less and a quick glance, you think, oh, that’s alright, that’s not too bad. But of course, you then work out how many years that is and think, shit that’s actually five years. So that’s a big one, I think.
Jenny 47:02
That’s hugely valuable. Thank you for sharing that one. I mean, it kind of comes back, you’re just thinking on a day to day basis, sometimes you have to click a button, have you read the terms and agreements? You know how many people actually take the time to read it, I’m sure very few. But in a business context, when you’re actually purchasing business expense, then you really want to make sure that you’re getting someone that’s used to looking at these contracts that have the time the dedication and know what they’re looking for. Because even a layperson or someone new to business, starting in an agency, they’re not going to have the expertise or experience to know what they really are, are they?
Ryan 47:43
No, no, not usually. And that’s why it’s worth investing, for the sake of a couple of £100, whatever it is that the advisor is obviously going to charge, it’s a sound investment for sure so definitely worth doing.
Jenny 47:59
So just final question, because I’m conscious of your time, and this has been hugely valuable. So far, I’m sure I’ve taken tons of notes. What do you see as the future of legal services, particularly, as they relate to the time of changing agency landscape, because it’s very dynamic at the moment. Have you noticed any trends? Have you any kind of thoughts on that?
Ryan 48:23
Great question. And nice ones to close on actually. I think what I’m starting to see, and I think this is where the pandemic has helped, really, I’m starting to see more talented lawyers thinking, you know what, I’m not happy with the traditional model, I’m going to make the jam, set up on my own, run their own smaller consultancy, there might be one or two lawyers or so and they’re thinking there is a better way of doing this where we can be transparent with fees, we can be flexible, and they can also get a much better lifestyle for themselves as well, where they get a better work life balance, because I think the legal profession is probably one of the worst professions for work life balance. It can be highly stressful, really long hours, and often for little recognition in return and hence why the burnout rate particularly among junior lawyers at the moment is hideous, and you only need to look at some of these big regional firms and city firms, lift up the bonnet and look at the culture and you think I get it, so it’s lovely to see that actually there’s more and more lawyers now thinking sod this, I’m going to go it alone. So I applaud those people that are doing that and long may it continue, but I think the the emerging areas would definitely be NFTs, blockchain, Web 3, the metaverse, those are all really hot areas at the moment for technology. And at the moment, I think the lawyers are kind of sitting there thinking, wow this is a really exciting new project I don’t really know much about it at the moment, but actually keen to explore it. And there’s a very, very small handful of firms that are starting to make their mark within those territories now. But I think blockchain’s definitely here to stay. I think there’s an amazing opportunity with that technology with this decentralised way of recording data that’s nice and transparent. And under no particular control of one particular body. I think that’s fantastic. And I think that could do really well, in the future. On NFTs, I’ve not quite got my head around fully yet. I’m on my way to it. But I’m learning a bit more because I love intellectual property law. I’m just trying to fathom out this concept of spending millions on something you don’t actually own the intellectual property rights, per se to. I’m trying to get my head around that at the moment. I’m sure someone might be listening that will probably explain that to me at some point. And obviously, Web 3, we’re going to be attending the the Agencynomics event in November, which we’re really excited about. And I’m really looking forward to listening to, obviously, some of the experts on Web 3, just to learn a bit more about that. So I would say those are the areas for me.
Jenny 51:18
I think I agree, because it is going to be a whole new environment and also for brand owners as well, because the whole concept of giving your brand to the community for them to then take and add on to change, so it’s going to be a completely different scenario. So I think it’s going to be some disruption coming up. But again, it’s like it’s all starting now but when is it going to hit for the mainstream who knows could be 10 years from now? We don’t know. But yes, anyone listening, as Ryan’s just mentioned, the Agencynomics event is on 8th November, I believe. And I’m going to be there, you’re going to be there. Fantastic. So anyone that wants to learn about the future, Web 3, NF Ts, metaverse, etc, come along. Listen, Ryan, that has been hugely valuable. I’ve made tons of notes, and I will be passing this along to the agencies I’m working with. If anyone’s listening, and they think this is really resonating with me, I’d love to have a chat with Ryan, who would you like to be contacted by? And what’s the best way of doing that?
Ryan 52:26
Yes, well, firstly, thank you very much, Jenny, for inviting me on again, yes, it’s been a pleasure to speak to you. And I’ve really enjoyed it. So hopefully, the listeners have got some value out of today. And if anyone does want to get in touch and have a chat, the best bet would be to either connect with me on LinkedIn. So it’s Ryan Lisk. Or alternatively, go on to hybridlegal.co.uk, you can have a look around the website and just see more about the services that we offer. We will soon be launching a free agency Legal Health Check, which will be nice and easy to fill out. It will be on a Typeform platform, so nice and easy to go through. And that will actually help agency owners work out, from a legal perspective, where are they strong? And where do they need to actually think about improving and we can obviously help them with those areas, if they wish, but there’s no obligation, it will just help them get a bit of a steer on how they’re standing. So I’ll let you know when that’s live. But I would say through the website or through LinkedIn.
Jenny 53:30
Amazing, that sounds really valuable by the way. Thank you so much. We will make sure that we include all those links in the show notes, Ryan, and once again, thank you so much for sharing so much value, and so many tips.
Ryan 53:42
A pleasure. Thanks, Jenny.
