The year I opened my gym, someone told me there are three people I need to have ready to go at any given time. At the time, I wasn’t sure why, but I believe in good advice, so I found the following people: 

  1. A CPA
  2. A banker
  3. An attorney

I quickly learned I wanted a CPA, because no one wants to mess up on taxes. I don’t want to go to jail because I wasn’t smart on my books or didn’t add right. (I know…there are a lot of steps before the IRS takes you to jail, but I’m not interested in that either!)

It turned out I didn’t need a banker until I was ready to buy a building, but once I was – thank goodness we had one who believed in us and had some trust in our business! 

There is way more I could talk about in those two above, but we’ll save that for another time. Today, I’m here to tell you why you’re going to need an attorney one day. Let’s start with good opportunities that you should include your attorney on: 

  1. One day, someone will offer to contract you or your gym for your services, and you’ll need an attorney to review it.
  2. One day you’ll offer a new service or program in your gym, and you’ll want to make sure your waiver covers it.
  3. One day you’ll want to offer new benefits or paid time off to your staff, and you’ll want to have your attorney review it to ensure it doesn’t discriminate or violate state law.
  4. One day you might want to sign a lease on a bigger space, buy a building or build your own. You’ll want your attorney to ensure the company’s paperwork is in order so you qualify for funding.

There are also a few bad reasons you may one day need an attorney: 

  1. Someone is suing you for a breach of contract or unmet financial obligations.
  2. You can’t fulfill an obligation to a landlord or creditor.
  3. You have violated a law of some kind or are not running finances legally.
  4. You were unaware that some action you took was not legal.

 

See that last one? That’s the most common one I’ve seen. Someone doesn’t realize something they’ve done isn’t legal and now they’re in search of an attorney for clarification or representation. 

Here’s what I don’t recommend you use an attorney for:

  1. Small claims court. It’s cheerleading, people. If you didn’t stop providing services to someone who was late on their bill, that’s your fault, not their fault. Do not take customers to small claims court. They owed you something the whole time you let them practice and compete. You could have prevented that with systems and policies. If you chose to make an exception and provide leeway for a special circumstance, I get it. I’ve done that too, but it’s rare and it’s never without a written agreement. It also never comes without my willingness to never get paid. Bottom line: Don’t make deals unless you’re willing to lose.
  2. Non-compete agreements. Even if these were legally enforceable in your state or with the terms you may have had someone sign to – it’s unlikely they’re easily enforced after what we all went through in 2020. That year was all about survival, and if someone needed to violate your contract to survive, it’s unlikely a judge would enforce a non-compete.

Tomorrow I’ll send you some tips for how to select an attorney and some do’s and don’ts. If you find it helpful, let me know if you’d like to see the same for a CPA and banker in future weeks!