Whether you are starting out in a new business venture or been running a design studio for a while, it's very important to develop an understanding of your legal obligations. Although it can be daunting, we can't shy away from our professional responsibilities and the need to protect our business and personal interests.
What's the first step? Knowledge is power, so get inquisitive, ask questions and do the research. We all have the tendency to stick our heads in the sand and pretend that these issues won't affect us. As we all know, however, even small issues can escalate into situations that are at best uncomfortable, or at worst, financially and emotionally troubling.
This is exactly why we hold our Seminar Series. It's a way for us to facilitate Q&A sessions with experts in specific fields, such as Demetrio Zema. Demetrio is a lawyer and founder of Law Squared. Not only does he understand the specific issues we face as interior designers but he's also a trailblazer in the legal industry.
In the lead up to the Seminar Session on Wednesday 18th September, we wanted to get to know Demetrio a little better and find out why we should get a grasp of the legal side of things.
TDC: Before we start, we’d like to get to know a bit more about why you launched Law Squared. Your business, launched in 2016, has been recognised as “Australia’s most innovative law firm”. What is it about Law Squared that is attracting such attention?
DZ: I was a pretty disgruntled litigation lawyer after having practiced for 6 years in two mid-size Melbourne firms and decided that there had to be a better way for legal services to be delivered. With so many of my friends and colleagues leaving law due to the significant pressures placed on lawyers, I came to a cross road to either start my own law firm and change that, or leave the law.
Law Squared is a truly unique business that delivers legal services. Unlike almost every single law firm in Australia, Law Squared focuses on outcomes, culture and values over profit and billable targets. With no individual financial metrics as a measure of performance, we have flipped the traditional law firm partnership model on its head. Now with a team of 22 across Melbourne, Sydney and Brisbane, Law Squared is recognised globally as a leader in NewLaw and legal innovation.
TDC: As interior designers, we are such people pleasers! We often focus on the transformation of a space to make our clients happy and fail to focus on the serious side of things, like contracts and T&C’s, that might help protect us in the event that something might go wrong. How important is it to have a professionally drafted client agreement?
DZ: It’s very easy to focus on your business and put emphasis into marketing, growth and business strategy and planning. Very few people in the creative industry consider the importance of legal agreements. Not because they don’t want to, often because lawyers have been expensive, inefficient, terrible communicators and therefore the client v lawyer relationship has been disjointed.
Few designers feel like their lawyer understands them and their business and that often a 30 page terms and condition or Services Agreement is both overwhelming and overkill for their business and their clients. A well drafted Terms and Conditions or Services Agreement should not be underestimated. These contracts ought to be the lynch pin of your business and it is the formalisation of your relationship with your client and the document that you hope to never have to enforce, however the document that you have 100% confidence in your ability to enforce in the event the relationship with the client goes sour. Having your terms carefully drafted by a lawyer is important to ensure they specifically meet the needs of your business and that you clearly understand the terms and can input the relevant information required to offer you maximum protection.
TDC: Many designers create their own contracts (if they have one at all) and often omit important details about their terms of business. How important is it to have a professional assist in the creation of your contract and what are the main areas to cover off?
DZ: We see many designers “copy and paste” and “change a few things” from a contract they received from a friend, or even a contract they have received from another company. This is playing with fire. For a few reasons, (a) you are infringing someone’s copyright by using their document, (b) the document was not created for your business and will most likely not meet your business needs (c) there will be things in that contract which you don’t understand, however because it sounds professional and was “probably drafted by a lawyer” you keep all those clauses in.
I am a big believer in simple, plain English contracts, that everyone can understand and that adequately suits your needs and the needs of your business. Main areas to always consider are what is included and what is excluded in any service you are delivering and building very clear parametres around expectations, turn around times and what happens in the event of a dispute.
TDC: Aside from contracts, what other areas of business should designers be seeking legal advice for, in order to proactively avoid situations rather than reacting to issues when they arise?
DZ: Aside from contracts, the biggest hurdle in the creative industry is business set up. Many people just register an ABN or partnership online without getting any legal advice, and without any consideration for IP protection, asset protection and tax considerations. One thing to remember, just because the set up is cheap doesn’t mean its right. We see a lot of people just jump into business without getting the foundations and fundamentals right. Spend time getting advice from a lawyer and an accountant early in the business’ journey to provide yourself with the right foundations for success.
TDC: Our industry is very visual – we rely heavily on digital marketing through our website, social media and editorial. What are the main issues we need to be aware of with regards to the protection of our intellectual property?
DZ: With intellectual property (IP) it's important to first consider what is it you are trying to protect. Due to a lack of education around intellectual property, and protection rights, we see a lot of misunderstanding in this area. Some basic fundamentals on the three class types of IP protection:
1. Copyright: is an inherent right by virtue of its creation. On the basis that you create something, write something, draw something, produce something. That is your copy right (unless you’ve assigned that right to an employer, client etc).
2. Trademark: is a protection, via IP Australia of a word or logo/device which provides you enforceable rights against others using that work or logo/device within the same class of goods/services as your registrations.
3. Patent: is a protection via IP Australia and is often a scientific based method, device, substance or process that is new, inventive and useful and is able to be commercially exploited for the life of the registration.
TDC: We have all been following the serious issue of external cladding and the legal ramifications of specifying a product that is not fit for purpose. How can we limit our risk with regards to Product Liability?
DZ: There are a few things which can be done to protect the business in this scenario:
1. Work with reputable manufacturers;
2. Ensure you have clear contractual agreements in place that deal with insurance and liability; and
3. Have professional indemnity and product liability insurance that covers your business’ good/service delivery.
TDC: In our industry we are often working with a wide range of trades and contractors; some are appointed by us and others are appointed by the clients. What legal considerations should be factored into both scenarios?
DZ: In any relationship it is important that there is a clear contractual agreement in place that deals with responsibilities and liability. Inevitably when there is more than one person on a project or “in control” it can lead to miscommunication, and errors in the project delivery which may or may not be your fault. Having clearly defined roles and responsibilities with any trades and contractors and having a clearly drafted services agreement or contractors agreement with whomever you are engaged by will ensure you are built legal parameters around your responsibility and liability.
TDC: For those dreaming of starting their own interior design business, what are the most important legal considerations and tips for setting up sound systems?
DZ: It is really important to start up “right”. We completely understand that startups are cost conscious and it is always a bit of “hit and miss” as to whether the business is going to be successful or not. I am a big believer in setting up the business foundations for success and therefore ensuring you receive advice both legal and accounting early in your “ideation” journey. Starting up with solid company foundations, a clear business structure and some well drafted and business specific contracts will go a long way in setting you up for success.
To learn more about legal matters for designers and participate in a robust Q&A session with Belinda Donaldson from Law Squared, book your ticket via the website. As we've seen before, often the best questions come from your peers!
If you have any topics that you’d like covered by our Seminar Series, let us know by emailing hello@thedesigncoach.com.au and we’ll make it happen!
Limited tickets for the Seminar Series: Legal Matters for Designers are available here.
Time & Location
SEMINAR SERIES: LEGAL MATTERS FOR DESIGNERS
DATE: Wednesday 18th September 2019
TIME: 5.00pm - 7.00pm
LOCATION: Est Lighting Pty Ltd, 14 Willis St, Richmond