Welcome BoomXers. Let's throw out the old playbook. It's time to tear down the traditional way of looking at your life and money and leverage the laws of money to our advantage. That's right. There are laws of money and those who learn and leverage the laws of money win. And sometimes win big. Stay tuned as asset protection attorney Darol Tuttle, educator, and leader of the Boom X Nation shows us how. Beginners, investors, entrepreneurs, fellow attorneys.
Are you ready? Are you ready? Let's arm this bomb. Now, here's the Boom X Show the laws of money.
Welcome to episode number eight of the laws of money podcast. I'm your host, Darol Tuttle. This episode will be short. I hope it attempts to answer this question. How an entrepreneur can attract clients, convert them to yes. Onboard them as a new client, have them pay you money and do so ethically and lawfully. And also build a loyal fan base in the process to answer that question, let's start with what the law says.
The law has an opinion about everything. And so the body of law that we should address first is called contract. When you decide to go to law school, Every law school in the country has the same exact curriculum.
The first year law school is a three-year program. The first year, the students who are in that first year are called one L so one L two L three L. That's how creative the law, legal services industry is? And so one of the courses a year long is contracts, another is property, tort. A Tort you got to look up the origins of that word, but it means tort law is all of those when you think like lawsuit, probably you're thinking of a tort. Personal injury claims negligence based on negligence. That's a tort and it means a civil wrong doing. If the wrong doing is so great and so harmful with malice intent, it's criminal law. But if you do not rise to a men's rea, that's a legal term from Latin, meaning a culpable mind in a civil law.
O.J. Simpson case as an example, he was charged criminally with murder and he was found not guilty. However later he was determined to be the actor that caused the wrongful death of the victim. I think about that. One court in one body of law said that he did not commit the murder, another body of law torts in a different court found that he did and was liable for damages to the family.
It's very interesting, but contract laws, the body of law that we are referring to, there are elements that must be met in order for there to be a contract in American jurisprudence. You must understand these elements. If you desire to be a business person in the modern world in America.
There are some cultures in which the rules are different. I understand there's a prominent culture, country nation in on the planet today that has different rules. About one fourth of the world's population happens to exist in this country. And anecdotally, I have no, I have never studied Chinese law, but I've heard from the business person that the culture there is once the contract is signed, that is viewed as the beginning of the negotiations.
Whereas in American law, the contract is the contract that is the end of the sales process. I have had about six engagements with entrepreneurs as a perspective buyer of their services, each one in different ways, misunderstood and violated the laws of contracts. And, we encounter violations of the laws of contracts often.
However, in a brick and mortar business, it's far less likely than in a e-com like startup, especially when it relates to like business coaching or consulting or something like that. That's just my observation. And so I thought I would take some of these experiences that I myself have had as case studies to exemplify what not to do what the law requires. And I'm trying to convince young entrepreneurs that there really is a good reason to insist upon as your own business practice to follow the law. Because if you do your business practices will also be ethical and you will develop integrity and respect in the industry.
And your fan base will grow. You will have a reputation as a person of integrity. Now, the rules, the laws of contracts require first of all, a meeting of the minds. Now, meeting of the mind. Does the buyer and the seller both have the same facts? Do they both understand the facts as to the terms of the contract?
Do both parties know what is being offered? What is being sold and what the price is? Cause if you do not have that element, you do not pass go. You do not have a law of contract. There is no agreement. And. And the thing is, it just seems so obvious, but I realized as I've encountered these young entrepreneurs that they haven't paid, they didn't go to law school.
And some of the, we wouldn't teach contracts for an entire year in law school, if it was obvious. And the issue is at what point have you gone to offer and acceptance. Which is the other, another requirement of a lawful contract because there's banter back and forth. I am going to sell to you an hour of my time as an attorney.
There's different ways to approach that like people can call me and say, Darol I am on your bike racing team and you're a buddy of mine. And I am calling you now not to talk about bike racing. I'm calling you because I have a legal question now. We've just, over time I've developed, I've learned, I've realized that when people know that you are an attorney, you are a lightning rod for conversations about you know their situation and how does that apply to the law? And as you age, you try to forget everything that you learned about the law outside and other than what you practice on a daily basis. And so most of the time I can say, look, I'm your bike racing, buddy. And I know the first thing about intellectual property.
I don't know if your new invention, the widget can get a the patent, But it's, it is instructive of what is the difference between a negotiating and discussing a deal and the actual deal? Recently I I am transitioning from a very organized rule, compliant, archaic industry to a new one and the entrepreneurial world is 100% internet based and communicate through social media, digital, digitally.
Whereas the legal industry is paper brick and mortar, super high overhead. I mean like legal services are so expensive because the legal industry is fixated on offices and paralegals and all of that costs money. And that just drives the price up to the point of it being out of reach for a lot of people.
One of the purposes of this podcast is to try to offer a different way of helping people. Now I have found myself like overwhelmed by the two worlds in which I have a foot like recently I've approached somebody in one of the Facebook groups I'm in, who appears to be super organized and very good at being responsive on Facebook and Instagram and all of these things and is publishing every day.
And so I'm having a problem. I'm struggling with like how to manage a full-time legal career and also. I like, how did, how do you, how are you on top of things when it comes to the modern means of communication was my question. Now I acknowledge that I am now like my bike racing buddies. This guy can do something, he can post regularly and I'm having a hard time.
How do you stay organized. Now so as I approached this person, I thought to my. I don't want to be disrespectful. I mean like the guy has something to say that's useful as to organizing yourself in the social media context. Like that's worth it now, myself personally, my ethics and morality is like a friend as a friend.
You know, somebody only if there's a true value proposition that requires like illegal competence. It takes a lot of effort, a lot of education, hundreds of thousands of dollars. I have invested into being, being a lawyer. And, at some point the question demands compensation because of that value proposition to the prospective client, but also just the effort.
And technical proficiency it takes to answer the question, but I've always taken, if you want to ask me about how the law works, I'm not going to charge you for that. You're my friend, a person I know an acquaintance, I just, to me, it's what the business world calls a loss leader. But to me it's like being a good person.
That's just the way I look at it. It has served me very well because people, I hope appreciate that. I. One of my goals is just to help people. Now in this particular case I made the mistake of asking for time on a topic related to organizing yourself in the modern world. And didn't did, but wanted to be respectful of time.
Now, the answer that I got back was yeah, let's schedule time and here's my calendar. And here you go. Now, the question is the law requires meeting of the mind. Was it clear to both the buyer and the seller that there would be a meeting for one hour for a set price to answer a specific question. In the absence of an agreement as to price before the services offered and a meeting of the minds as to the purpose of the meeting.
The answer is that as not repeat N O T capital, N O T not a lawful contract, there, there is no legal requirement for compensation to be paid to anybody for a widget, a car, a house, an hour of an attorney's time and less. That is determined ahead of time. Now here's the ethical part of it in the law that there are very few industries in which an order to become a member of that profession.
Massive amounts of education are required. I think about financial advisors and some of them are great, but that, that, financial advisor world it's like a wild west. The investment advisors act was created just because people were charging money for financial advice and so much fraud was going on that Congress said, Blake, look and so Congress minimal reporting requirements and compliance requirements to try to cut that down. But law school is, like three years of law school, plus a bar exam, plus ongoing commitment and an oath to the rules of professional conduct. And you can say what you want to about attorneys, but that is just because you were in a lawsuit and lost, and now you're mad or heard about this, that or the other thing.
The legal services industry is flawed in the sense that it is an advocacy based program. And that means there's going to be a loser. And the loser is not going to like the lawyer for the other side very much. And so that's the origin of lawyer jokes, I think, but our profession should be a model for entrepreneurs.
I believe there is a strict code of conduct and ethics that we raise our right hand and we swear that we will follow to the best of our ability. And there's an entire big, long section on fees. And that ethical oath that we swear is that we will, as attorneys charge a reasonable fee. Now I just earlier said that fees are bloated because lawyers are very glued to high overhead model of business.
I said that, and that is true. However and I have now come to realize that attorneys probably, a relative to what I'm seeing in the wild west of the entrepreneurial world, we charge very little. I've been a lawyer for 24 years and, I've chosen to keep my overheads. I've always been a sole practitioner and am not into big overhead.
Big law firm type attorneys or are offering the same services and advice. And they're billing, maybe like 750 bucks per hour. I've chosen to keep my overhead low and so 350. I could charge 750 if I wanted to, but 350, because the rules of professional conduct require me to also think about the value to the client.
The complexity of the subject matter is a variable in determining fees as is price among my peers. That is a reasonable, there's actually a formula like you can't just make a number up. It has to be based on something. Now in this particular case one of the case study, one of the real life examples I've encountered in which I paid somebody for an hour of their time is a woman who is the CEO of a crazy successful company.
And she is a pioneer in the world of entrepreneurial ship as defined. Social media, modern. And she did it exactly correctly. She had an offer. I accepted it an hour of time. It was very clearly set. What would happen, what the time limits were, what the value proposition was. And I had to pay the set price before I could even schedule the time with this amazingly successful person.
And she delivered exactly in a very disciplined way. What I bargained for contrast that to the most recent example in which I thought I was having a conversation. It was not clear to me whether or not it was about podcasting or video tube or writing books or all of the different topics, or even rumormongering as in, the Facebook group that we're in.
I thought we were discussing my pain. Like I came to that person with a problem. And the problem is how do you stay organized? Now the rules of professional conduct for an attorney would say, okay, so that is, you can charge money for that. However, probably not very much. The value proposition is give the guy some advice about being organized. That's a different than give the guy advice about how to protect assets when his wife has had a stroke and they're paying $30,000 a month in medical bills. Put it this way, I know heart surgeons that don't charge a thousand dollars an hour and the value proposition for a heart surgeon who saves your life.
That's a high value proposition. Staying organized is a low value proposition. It's there is value, but not great value. Now the successful entrepreneur, the CEO of this great company defined what she was offering at the set price and did exactly what she promised. In the other example there was no set price.
And what I was asking for was not what was discussed and delivered during the meeting. What the meeting turned into was talking about chat, chit chat, back and forth about things that we have in common and general observations about what about this? And then it evolved into what I would characterize as a sales pitch as to one of this person services that was completely unrelated to the original request.
Now in the law, that would be negotiation like that is the sales process. We haven't reached the contract yet. I'm telling this story as a case study to illustrate the difference to help you. If you are an entrepreneur, clearly you're going to get yourself into trouble if you don't do it correctly. It may not be a lawsuit that is headed your way.
It's not worth suing somebody over an hour of time, but you will get the reputation of just not understanding the law and not, or worse just being unethical. So let's break that down. When we talk back and forth, hey, I'm what do you think about helping me post on social media consistently? Now at that point, that is post-contract.
I asked for that. And let's say we had a set agreement as to price. When the conversation is tangential, you are out of the contract, you are now trying to negotiate a new deal. You are saying, I don't know anything about social media which is what you asked me to opine about, but did you know that I have this other enterprise in which I help people publish books.
That is a sales pitch to a person. You don't get to charge for that. When the person says I have all the information I need about your proposal, and I know the price, I know what you're offering. I agree that is meeting of the minds. Now you have a contract, not before.
It's funny because this, I guess I am upset about it because the conversation got out of hand, it was just a rambling mess of a conversation about topics that I'm interested in. And so I can be chatty. I want to know about how to publish books. It's not, I'm not going to pay money for that, but if you want to discuss it, okay, I'm interested.
I've been writing a book for 24 years. That's on my bucket list. I'm on chapter two, and so the interesting thing was it was like, okay what's happening in a meeting next week, so you can tell me whether or not you're going to hire me. I'm like, okay, I'm pretty sure the answer's no, but if you want to touch base next week.
Oh, of course. To me, the law would say that as all negotiation, as to a collateral issue and there no meeting of the minds. Not a lawful contract. You can't charge for it. What was disappointing was during the second meeting that turned into an hour conversation that was rambling, an unorganized.
And then at the end, an invoice for a total of $2,000, because there were two meetings at an hour now that, that, okay, so hit, let's hit the breaks there.
Entrepreneurs it is not a lawful contract unless the buyer has agreed on price. It is not a lawful contract if it's a sales pitch about something else. Contract meeting of the minds and negotiation are two different things.
And so when you have this invoice for 2000 bucks, you have to say, okay, There is no contract. There is no legal obligation to pay 1 cent under the eyes of the law. However, do I want to cause a conflict with this person who doesn't understand that? And it puts the buyer in this case, me in a difficult position as I'm podcasting this, I don't really care about actually, I don't know that's not true.
The result of that conversation was for me to point out, look, stop. I'm not paying $2,000. You're out of your thinking mind if you think I am. So let's talk about reasonableness of fees. A CEO from a very successful company who is actually if I said this person's name, everyone would know who she was charged $500 for one hour. And she is in that stratosphere as to success.
Okay. This person who's untested wants to charge a thousand dollars an hour. Now, like that's the high end of what attorneys with 30 years of experience with charge, but we are bound by rules of ethics. Entrepreneurs are not it's unregulated.
That does not mean you can create a policy that you publicly post that makes the same pledge. Reasonable as I am committed as a business coach as to charging a reasonable fee, based upon the complexity of the topic, the value proposition to you my future client and fair market value. Now the truth is, that, that might mean like I would price for what I received from these rambling conversation.
As compared to what I asked for the monetary value is zero. Like I, that's not what I was asking you about. The confusion of the conversation led to me asking more about your business proposal, but as to this case study, there's no value ethically and morally, there should not be a fee at all because you didn't deliver anything that was asked as meaning of the minds. But let's just suppose that on an hourly basis, you want to can coach and consult about publishing a book.
There are some moving parts there. It is definitely something that's based upon experience. Everybody on the planet believes that what they do has value. It is hard and difficult and even weird to places like monetary value to what you love.
If you think about money, but the name of this podcast is the laws of money. What is money? There is the fourth episode. I interview a 1% attorney and the question is what is money? And we go back and forth what exactly is it? It's weird to me that at the end of the month, most workers in America, people are paid every two weeks.
Every 30 days. And for 30 days you toil, you might be a plumber. You might be a dentist, a lawyer, whatever. And at the end of the month for all of your effort, the only thing that you get from that is on, in your direct deposit, you don't actually see money. They don't give you coins or dollar bills. It's digits on a computer screen, and you're sweating it because by the end of the month, Like we need to get this, the digits higher on the computer screen at the bank.
Cause otherwise, what I want to do is go out and have the computer screen, have a lower digits so I can buy rent for another month or gasoline for my car or insurance for my kids. And the nice Lamborgh whatever you want to purchase. And so most Americans go through life, working and toiling for a certain number of digits that appear on a computer screen at the end of the month.
So they can go out and try to take those digits and make them a lower amount and hopefully time it exactly right. So that they do not go into red digits or negative numbers, but by the end. Yeah. So it's just like this bizarre thing of some people are valued at $10,000 a month. Their effort and other peoples are valued at 500.
However society does evaluate it does make value judgments. And so if you are completely out of sync with society's values as to your you're not going to get very far you tend to get a bad reputation, first of all, and there goes your business. The second of all, ethically you've done the wrong thing. And if you're ever brought into a legal contest as to your behavior, you will lose decisively.
Judges might even pose attorney's fees. I don't know. And so I will say this I, I have encountered there, there are at least four prominent entrepreneurs that I highly respect. But different degrees of respect, but they all dropped out of law school. Now I wish I had dropped out of law school many days, sometimes most days.
However one is a person who her business is email strategist, email launch strategist. I'm like, wow, that's a fancy title. What I learned about that?
Career designation name is it's really copywriting and copywriting is trying to persuade somebody to buy something from you only with the written word, and it's considered to be a highly compensated skill. However, if you follow the analysis of a reasonableness of fees, the value proposition is great.
If you successfully launch and copy helps bring in sales, then that brings great value to the customer. However it fails in other areas. It is not horribly complicated. In fact, it's easy. I know this because I hired a social this person who flunked out of law school or dropped out of law school.
Wouldn't let me hire. And she wanted to charge a thousand dollars an hour. And, after I cleaned the monitor, my computer off from spewing coffee, I was sipping as she said that my industry would say that is prohibited. And I've actually thought about supply and demand. Clients are willing to pay $2,000 an hour for attorneys who give great value.
Can we charge that much? Yes. That's what the market will bear. However, ethically probably not. And so the legal services industry is an industry that brings the price down that regulates the price that humans would charge. You may not agree with that. However, People will eventually clue in like this particular entrepreneur will not be able to charge a thousand dollars an hour forever because every single one of her customers will go on and have the same realization that I have had.
And that is, oh, really email sequencing can be automated through platforms like convert kit, click funnels, and copywriting is definitely a skill. However, you can hire a copywriter for far less than a thousand dollars an hour. And so we have vitally violated the ethical consideration and in the long-term, her business is going to suffer or she will modify her behavior based upon market conditions and the evolving market.
I hope. And my thing is like why not just go out and do it right from there? The answer is people don't know. There's no guidance, there's no regulation. There's no formal system about how to attract clients through a lawful contract that makes the client feel good. That makes you feel good and improves your reputation.
In the absence of that, the opposite will result. You will have disappointed clients who feel like they've been taken advantage of, and your reputation will diminish. And if you do not change your behavior, I believe you, you better get your resume up to date. That's just my view based on experience.
What's funny is this particular person has a problem because in, in the business world and keep in mind these young entrepreneurs, most of them have no business experience. And so in the brick and mortar industry, industrial world invoices come in, usually in the absence of a contract, like you can have a contract that says here's the invoice it's due in five days, there's a penalty of 10% interest.
If you do not pay in five days, if the customer agrees with that. By all means that's a lawful contract. You can't enforce it in the absence of that bills come in and they're paid once a month. I mean like the cycle is every two weeks or every 30 days. And just because you made up a price and then it turned a contract into a negotiation and then the person has agreed to pay your fee because they feel bad that the second question is when can I get paid?
This person's approaches I need to get paid right now. And then has been sending me emails and texts like every other day, where's my money. And of course I'm not having fun with any of this. It's actually upsetting. However, I'm trying to help this young man understand.
Okay. What is the legal proposition like point to the lawful authority. The authority to lawfully enforce a due date for your payment. But of course the response is dead silence. Now you would think that the teaching point would get across. Oh, like I have no contract, no agreement, no meeting of the minds.
I violated every rule of contract law and now only demanding money. And I don't, I can't even point to the lawful authority to ever be paid. So I guess this podcast should be called what not to do, but I hope that if you hear it and you're in this space, you take these words to heart. I didn't even get to consideration on the other requirements of contract, I guess I will have to continue the conversation.
And I will, in fact these topics are important. They will help you. And more than just ways of meeting the laws requirements, but also establishing and running your business the correct way from the beginning. I hope that helps stay tuned because there's more to come the next. I'm excited about the next episode, which is going to be called is there a market for failure? Until then, this is Darol Tuttle, helping you learn and leverage the laws of money.
