7 Considerations When Adding A Business Partner

Or what I really want to title this article: how to take strategic advantage of business opportunities by leveraging legal options.

This is a long-awaited announcement: I have brought on a business partner in my second business, The Creative Law Shop®. And I couldn’t be more thrilled by this transition. The backstory can be found in greater detail on Instagram, but in short: My end goal for every business is to aid them in playing the long game: build a business you can sell, a business that can last longer than you, that extends a further scope of good that what just YOU are capable of.

I’m a lawyer, an entrepreneur, & a visionary who will always have new business ideas swirling in my head, but I realized long ago that at the end of the day, it’s the practice of law, of advocating for clients, that brings me joy. And in that pursuit, for the past 3 years, I’ve been building two businesses: this law firm, and the Creative Law Shop®. The latter was a byproduct of the former, but I immediately saw it’s impact, & it accomplished my goals: to help SO MANY people. It extends farther than myself. It brought on a greater financial reward than any previous legal position I have held, but yet; it required a gigantic sacrifice at the expense of so much: my time, my health; and more. When COVID hit, I knew: my firm clients will always come first. To continue to run the CLS in the way I mentioned above, I had to make a radical change.

In that vein, in the early fall, I brought on a brand new business partner: Paige Brunton. Paige is someone I’ve admired since I met her. She’s just different, a disruptor. She was the first person I reached out to when I began to brainstorm said “radical changes”. And she was the person who challenged me to think: why not continue providing what only you can, but bring in a partner to do the rest?”

When it’s time to make a change it business, that doesn’t just mean it’s time to fold up shop. Or sell it, even.

Sometimes it means marrying what only you can bring to your company, and bringing in a partner who can do the same.

My business partner does just that. She knows how to run an online business like a machine, and her integrity is unparalleled. This partnership allows me to do what I do best: focus on writing contracts and providing legal acumen, without spending my time on those integral parts of business that aren’t necessarily in my wheelhouse. At the end of the day, I love the law, not necessarily online marketing.

As you can imagine, I poured countless hours of time and energy executing a contract that I knew would execute both of our end goals: we had the same goals in executing this deal, but we knew that we had to specifically spell it out, in writing. I won’t be sharing any details of our agreement, but do want to share some takeaways. Our professional relationship was simply too important to leave room for lazy error, so of course, we had a contract.

Here are 7 considerations you (or your lawyer) should think about when entering any sort of legal relationship or joint venture:

  1. Payment. How will profits be split/how will your partner be compensated? How will profits be split? Even moreso, what is a “profit”? Is this “net profit”? These all need to be defined within the contract.
  2. Your legal relationship: are you giving equity in the business to your partner, or management responsibilities? Are they a contractor or consultant, employee, etc? In other words, will they own a “piece of the business”, or a piece of profits and management? Is it a joint venture? There are tax implications to this decision, so you must consult a tax consultant.
  3. Liability: who assumes what risk?
  4. Exits: Awkward, but as Paige and I would both say, so necessary to define. How would an exit from the partnership be handled- physically and monetarily? This must be decided ahead of time, and spelled out. Again, I will speak for us both, but this was a critical provision for us. This partnership was novel for us both, and our professional relationship was simply too important to leave room for any sloppiness when it came to a business strategy. Consider this a business “prenup”.
  5. Intellectual property: Who owns what (both existing and that to be created)?
  6. Who’s law’s govern? Who is allowed to make hires? Again, these questions must be thought through in advance.
  7. Make sure your partner hires their own lawyer. For many reasons, but simply put: two heads are better than one, and in a contract relationship like this, it’s critical to have lawyers representing both side’s interests, and illuminating other sides’ perspectives.

There are so much more than “7 considerations”, of course, but these should serve as primer for thinking about this type of relationship.

Again, I can’t wait for you creatives reading this to learn more about Paige, if you don’t know her already. I am so honored to do business with someone I think so highly of. But aside from the personal side of this transaction, in particular, I do want this article to serve as another reminder: if your business is at a crossroads, if you feel that something needs to change, and there’s a way to up level your product/services….you’re automatically a step ahead by thinking of selling. But don’t necessarily think this is the end all be all. Other options may be available- they just must be legally handled. Email me at hello@paigehulse.com for more information!

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