In this fundamental episode, Richard Gearhart, Founding Partner of Gearhart Law, LLC, shares how to smartly handle legal basics as a pre-founder so you can protect your ideas without big costs or risks. If you feel intimidated by legal stuff while still collecting a paycheck and juggling a side hustle, you won't want to miss it.

You will discover:

- How to check your employment contract and document ideas separately to safeguard your IP from employer claims

- Why running a proper trademark search early prevents costly rebranding or litigation down the road

- How to set up an LLC, bank account, and upfront payments to build legitimacy and get paid faster

This episode is ideal for for Founders, Owners, and CEOs in stage 1 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

Richard Gearhart, Esq., is a leading intellectual property attorney, entrepreneur, and nationally recognized speaker dedicated to helping innovators protect and scale their ideas. He is the founder of Gearhart Law, an international law firm focused on patent, trademark, and copyright matters for startups and growing businesses worldwide. He has presented to Fortune 50 companies, top colleges and universities, and legal audiences nationwide, and has spoken alongside New Jersey Supreme Court Chief Justice Stuart Rabner. Richard is the co-host of the nationally syndicated iHeartRadio show Passage to Profit – Road to Entrepreneurship, airing on 35 radio stations.

Want to learn more about Richard Gearhart's work at Gearhart Law, LLC? Check out his website at https://gearhartlaw.com/

Connect with Richard though his LinkedIn at https://www.linkedin.com/in/richardgearhart

Hello, hello, and welcome, welcome once again

to the Start Scale and Succeed podcast, the only podcast that

grows with you through all seven levels of your journey as a

founder. I'm your host, Scott Retzheimer, and this one's for

all you pre-founders out there, folks who have a great idea and

have the wonderful benefit of still collecting a paycheck, and

as much as that can feel like a challenge when you're in the

middle of it, because there's so much to do and there's so much

you're excited about, there's a lot to do before you take the

leap, and in that window, legal protection can be really, really

painful. However, if you're smart about it, it can also be

highly profitable, and here to show us that narrow path is

Richard Gerhardt, Esquire, who is a leading intellectual

property attorney, entrepreneur, and nationally recognized

speaker dedicated to helping innovators protect and scale

their ideas. He's the founder of Gerhardt Law, an international

law firm focused on patent, trademark, and copyright matters

for startups and growing businesses worldwide. He has

presented to Fortune 50 companies, top colleges and

universities, and legal audiences nationwide, having

also spoken alongside New Jersey Supreme Court Justice Chief

Justice Stuart Rabner. Richard is the co-host of the nationally

syndicated iHeart Radio Show Passage to Profit: Road to

entrepreneurship, airing on 35 radio stations. He's here with

us today. Richard, welcome to the show. Really excited to have

you here. As I was getting ready for this episode, I told you how

struck I was that an attorney's focus would be on the passage to

profit. That is just like probably one of my favorite

things in the world, and so you work with founders at every

stage in this journey, but I really want to start here with

that person who they haven't quit their job yet, maybe a kid

at school, but they haven't made the leap to full time, and for

these folks, the legal side, if they think about it at all, is

so intimidating, but from what I gather and the research that

I've done, you approach this very differently. So, how do you

see legal on the road to profit?

Well, that's a great question, Scott. And thank you

very much for having me. I've been looking forward to this,

and I love talking about entrepreneurs and

entrepreneurism. Gerhard Law was an entrepreneurial venture. I

worked for a big company, and then left, started the law firm

20 years ago, and I still feel like an entrepreneur after all

these times. So, it's really, it's been really been a great

journey, and it's, it's really worked out. If you're starting a

side hustle, one piece of advice I would give you is to make sure

it's okay with your employer, right. A lot of people have

employment contracts that restrict what they're able to

do, and if what you're doing is too close to the employer's

business, it could cause you problems, right. And I think

you, it's almost always better to get permission from your

employer before you embark on that path. If not, you have to

have a strategy to make sure that the employer can't come

back later and you know claim rights in your ideas, etc. So

that's one area I think everybody needs to be a little

bit careful with. Now, if you don't have an employment

contract, if you're working on software, but you're working at

a grocery store, it's probably not going to be an issue, but if

you're working for a software company and you're starting a

software business on the side, it's something that you might

want to pay a little bit of attention to, and so really

getting set up from a legal perspective is super important.

It's not, doesn't have to be super expensive, you know.

Generally, you want to set up an LLC at some point, you're going

to need that in order to have a bank account, right. Pretty

basic stuff, but if you're going to be a legitimate business,

you're going to want your own bank account where you can, you

know, pay and receive money. In order to do that. Banks require

an LLC. So one question that comes up a lot is, what should I

call my company? And if you have an idea for a company name, it's

really important to make sure that you not only check the

availability of the name with the state registration bureau,

like in New Jersey, it's the secretary of state that provides

business names, but you also make sure that it's free from a

trademark perspective, so just because you can register the

name with your state registrar doesn't mean that the name is

generally available, and so I see this happening a lot. People

come to me and say, well, the business name was available, and

when I went to register, and so I thought I was good, but that

really doesn't give you the freedom to operate that you.

Need somebody could have a trademark on that name, and the

registry, the registrar will give you the name if it's all

even off by a period, right? If you put L period C period L L C

period, or you put L period L period C period, that the

software doesn't know the difference, right, and, and so

that's something that you need to be careful about when you're

first getting started.

Yeah,

I want to unpack that, because there's,

there's kind of two ways to look here: there's looking backward,

or at the current situation, and then there's looking forward

about what you're building, and this idea of paying attention to

your employment contract, I think, is really, really

important. One of the areas that I think is of growing concern,

especially because we have such an intellectual property heavy

economy at the moment.

I'm not a, by the way, yeah, how do you,

how do you, how do you know or navigate

whether or not it's actually your property to use, because

there's the possibility that if it's, if it's something that you

do well already, if it's something that's part of your

work, if it's something you do for your employer, that might be

related. How do you help folks navigate that conversation?

Well, we would look at the employment contract number

one, and you know there are always clauses in the employment

contract about using employer information and disclosing

employer trade secrets. So, my suggestion is, is that if you're

in a closed case where you're working for a software company,

but you're also developing software to be very careful to

document your ideas in a way that it doesn't implicate the

intellectual property of the company that you're working for,

right. So, if you work for Google, and you're building

browsers. Well, it's going to be a tough sell to somebody to say

you weren't using Google trade secrets, right? But so you

generally kind of want to find a way to stay clear of the

company's main business if you want to take the safest path,

another thing, you don't want to use company time or company

materials, you don't want to use the company computer, you don't

want to use company resources. Those are things that the court

would look at when they're trying to decide, well, is this

your invention, is this your intellectual property, or does

it belong to the to the company, so those are things that I think

are important to keep track of. I, I know we had one client many

years ago who was getting an MBA, and she entered a business

contest to, you know, an MBA competition, and she used her

company computer when she was in school, and she created the

presentation, and she won the competition, and then she went

on to start a business around this. Well, the company found

out about it, and they said, look, it, you're using the

company computer, and you know, she was meeting with people at

4o'clock you know, like company hours, and the company got mad

and terminated her employment, and so that's kind of an extreme

case, but you know, here's she just thought she was getting an

MBA, and and entering a contest, and then she was going to see if

this business could take off, and the company didn't like it,

so yeah, you have to, you know, you have to kind of evaluate,

are you putting your job at risk, and do you care? I mean,

sometimes people are putting their job at risk, and they

don't care, because they're planning to leave anyway, but

other people are like, no, I, I need this job, and I want to, I

don't want to, I don't want to leave yet, right? So, yeah,

I think for some of our mercurial listeners,

whether or not you should care isn't necessarily how you feel

in the moment, but what is, what is going to put you in the best

position to succeed in this new venture? There's a slightly

different, and so I can just imagine, like I would hate to be

in the legal profession with work from home, and how so many

of those lines are starting to blur. I could see some folks

just thinking, like, hey, like, how could I ever navigate that,

and, and so these ideas on, on how to separate that, how to

document that, I think are really, really helpful for folks

now looking ahead, because ultimately the, the, the goal

isn't to just not get, not to not get fired, the goal is to,

to go out and. And start your own thing, and to do that, you

have to be profitable, right, or you have to be very close on the

path to profit. So, walk us through, and you kind of did

this out of the intro, but let's, let's break it apart a

little bit, but walk us through those, those kind of minimum

legal steps that you can do to help get on the road to

profitability as soon as possible,

so I mean, most of the legal stuff is more of more

defensive. So, setting up your LLC, you know, you want to

shield your personal assets. It depends on what kind of business

you are in, but if something goes wrong with your business,

you don't want people trying to reach your house, and if you, if

you do an LLC properly, you can prevent that from happening.

Another area that we want to look at, I specialize in

intellectual property, so I do patents, trademarks, and

copyrights and agreements related there. But if you're

picking a name, you want to make sure that somebody else doesn't

have the name. If you're creating a new product, you want

to make sure that somebody else doesn't have a patent on it and

could block you. So, I think at some point during your

commercialization process, you have to do research, and you

know you can do it yourself, or you can hire an attorney to do

it. It's typically not that expensive, and but an attorney

is going to look at things a little bit differently with a

little bit more experience when it comes to like selecting a

name and again I have had clients who start the business

it goes well for a couple of years all of a sudden they gain

some visibility somebody in another state says, 'Hey, wait a

minute, you're using my name and I've got a trademark on that.

And so it's two years of branding and advertising that

are put in jeopardy, and then you know you have to change your

name or you get lawyers involved, or there's litigation,

I I've had clients who have, you know, picked the wrong name, and

$300,000 later in litigation they've been out for five years,

and all of a sudden this company in Europe decides to sue them,

and it's not only just the legal fees, it's like, well, do I have

to change my name, are customers going to be able to find me, and

so doing that research early on can maintain your profitability

and your ability to exist as a business, and so I mean, for

like a trademark search, you're looking at spending maybe 750

bucks, and it's kind of a small price to pay, and so you want to

check into that, you know, before you get too far down the

road, and and so I think that's, you know, I think that should be

part of every entrepreneur's planning process.

Yeah,

so

it's very good. There's there's one area

that I know is a total headache for me, and I've seen this

happen for others as well. But one of the things that you have

to do to be profitable is get paid, and you talked a little

bit about some of the requirements for the bank. What

I've also found is getting a payments processor set up can be

a really cumbersome process, and, and so, what have you found

for helping folks to, to get the, the legal side of that

everything sorted, so that they can start collecting payments

and actually put themselves on the road to profit?

Well, you have to have a bank account, and then there

are a lot of payment processors now. I mean, you have

QuickBooks, has a payment processing system, there's

Clover, there's Stripe, there's a lot of drop-in plugins that

make it easy to accept credit card payments. It's kind of

expensive sometimes, but it makes it easy, I think. The

bigger challenge is actually getting people to pay right, and

so I think it's important. One of the lessons that we learned

early on in the business was to get some sort of deposit or get

money up front if you're providing a service right, and

you know, in my life, I would, I would never purchase something

or order a service that I wasn't planning to pay for, but

unfortunately, there's people out there that don't have that

same approach, or they, they are well-intentioned to pay for it

when it starts, but then, for whatever reason, they, they,

they can't, the circumstances change, and now you've put a lot

of effort and labor and materials, perhaps into project,

and now you're spending too much time trying to get payments, so

it's pretty rare now that we only. For certain customers, do

we extend credit at the firm, so getting paid early is, is

important, and it's here, and if you're, if you're, you know, you

want to maybe set up automatic withdrawals, if it's a

reoccurring, if it's a reoccurring service, if you're

making appointments where you're going to be showing up, getting

a deposit of part of the money before the appointment helps

ensure that somebody's going to show up, because it's, it's too

easy for somebody to send you a note, you know, an hour before

the appointment, saying, "Oh, sorry, I can't make it today. My

kids are sick, right? And the kids may be sick, but then

you've just planned to spend that hour. If you have a

deposit, it sort of weeds out the people who are serious about

it from the people who are still thinking about it. So,

yeah,

you know, making sure that you set your business up,

and it's kind of hard to do when you're first starting out. For

some people, I think it wasn't natural for me. I'm an attorney,

and it wasn't natural for me, you know. But over time, I saw

how much time and effort we spent trying to collect the

money, and it's like, I don't want to work with somebody who's

not able to, you know, at least give me a deposit upfront, so

yeah, so good. Richard, before I let you go,

I've got just two quick questions for you. The first one

here is a question I'd ask all my guests. I'm very interested

to see what you'd have to say, but the question is this: What

is the biggest secret you wish wasn't a secret at all? What's

that one thing you wish every founder watching or listening

today knew?

I would just say, take care of your health. I mean, get

enough sleep, eat the right foods, get some exercise, get

some entertainment. I think you can get stale. I think,

especially work from home projects, entrepreneurs can kind

of just turn their, their office into their own little mini

prison, right? And they never come out, and so I think you

need to get out, take a break, get some fresh ideas, and you

can go back to it with a new mindset.

Very good, very good. No mini prisons, we

don't want that, Richard. There's some folks listening

that would love help from someone who gets entrepreneurs

and legal. It's a rare combination there. Where can

they reach out to you? How can they find out more about you and

the work that you all do?

So you can reach out to [email protected] It's spelled

G E A R H A R T L A w.com and you can fill out a contact form,

or give us a call. Our initial consultations are complimentary,

and people get a lot of good advice and support. We hope, and

entrepreneurs are our sweet spot, so you know, feel free to

reach out. We're always available to help an

entrepreneur.

Brilliant, Richard. Thank you so much for

being on, being here with us today. It was a privilege and

honor having you here today. I really appreciate it. And for

those of you watching and listening, you know your time

and attention mean the world to us. I hope you got as much out

of this conversation as I know I did, and I cannot wait to see

you next time. Take care. Hey everyone, ScoreTimer here. Thank

you so much for listening to the Start Scale and Succeed podcast.

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