Today’s highlight goes to Amanda Montgomery of Vela Wood law firm!
Bio:
Amanda Montgomery is a business attorney based in Dallas. She provides assistance to small business owners and creatives, including contract drafting, entity formation, trademark registration, and general counsel services.
You have a Contract Tips Tuesday series where you explain concepts like entity formation, intellectual property, trademarks, and other contractual messages. Is there any tip you’ve written that you believe will become more important than ever due to the effects of COVID-19?
I have recently discussed employment agreements, which have become increasingly relevant during COVID-related layoffs. We are seeing new startups struggling with old employer agreements that affect the founders and their marketing and launch efforts. Most people do not realize when they sign an employment agreement that they may not have access to their client contacts when they leave and start a new company. There are also problems arising with departing employees taking a thumb drive of confidential information—most employers are cognizant of this activity and immediately send a letter demanding return of this confidential information.
So you’ve started the beginning of your career in civil litigation and moved further into working with small businesses. What has been a fun surprise and/or harsh reality in this transition?
I really enjoy learning about my clients and their company’s goals, and switching over to more transactional work gives me that time to develop client relationships. In litigation, you typically learn more about the client as you are pulling together discovery and focusing on larger issues. I think I understand my clients better in my current practice and I am able to build trust through our frequent communications. The harsh reality of this change is, of course, litigation generates more billable hours and therefore more income. There is always a trade-off, and at this point, I do not miss litigation practice.
2020 is shaping up to be one of the best times ever for new consumer startups. According to CB Insights, financing for new startups was more than $6.6 billion in Q3 2020. Is there any common misconceptions that clients have when asking about LLC formation or incorporating their business?
If you are eager to immediately court investors and raise funds you will want to form a corporation—in Delaware or Texas. Enlisting an attorney will usually help you complete this formation correctly the first time. But if you are not looking for investment right away and want to grow slowly, you may benefit more from forming an LLC. This is a much easier filing to complete and you can design your LLC to be as simple or complex as you would like. (I call LLCs “designer entities.”) Many young entrepreneurs do not realize that it is not that difficult to convert their Texas LLC to a Texas corporation once they are ready. If a corporation’s reporting requirements and related compliance are intimidating, realize you have other options, including the LLC.
On Wayup’s National Intern Day, Citi Bank’s internship program was selected by a panel of judges and the public vote as the #1 standout program of 2020. In a climate where firms have been called out for using unpaid labor, how can companies make sure their internship programs are 100% legal?
The Department of Labor is clear about how companies need to run an unpaid internship program, and my quick summary to clients is to explain it this way: the internship program should be connected to the student’s university and it has to primarily benefit the intern, not the company. (In fact, it should be cumbersome for the company to run the intern program, rather than a moneymaking endeavor.) Of course there are other factors to balance and consider in the “primary beneficiary test,” including: 1) no promise of compensation or a job offer, 2) training that is similar to an educational institution, 3) accommodation of the intern’s class schedule, 4) short duration of the program, and 5) educational benefit to the intern that complements rather than displaces paid workers. I think the easiest way to avoid an unpaid labor issue is to simply shift to paid internships. With part-time, temporary W-2 employees you will avoid most labor issues and you’ll have a more diverse group of interns, rather than a small selection of affluent students who can afford to bypass wages for a full semester.
Links:
I’m at Vela Wood law firm, you can use this one: https://velawoodlaw.com/attorney/amanda-montgomery/
