1606: Small Business Legal Protection & Setup with Matthew Fornaro

Robert Plank 0:00 Matthew Fornaro provides practical strategic legal guidance for businesses across South Florida. He has over 20 years of experience, and he helps entrepreneurs, startups, and established companies manage contracts, disputes, and risks. So, if you're here and you're worried about this one lawsuit that might wipe out years of hard work. Well, we're here talking to the right person, because most business disasters start long before anyone steps into a courtroom. So, he's going to fill us in on some of these perhaps dangers or preventable measures that we might be able to take. We're talking about things like intellectual property or contracts, and he's dealt with businesses and complex commercial litigation, so it's here, and we're here to get educated, and it's time to just figure out what we don't know we don't know, with the help of Mr. Matthew Fornaro from fornarolegal.com and his very exciting and cool phone number is 888 F L A lawyer. So we're here speaking to this lawyer who serves Palm Beach, Broward, and Miami-Dade counties, Florida. So, Mr. Matthew, how the heck are you?

Matthew Fornaro 1:17 I'm good, Robert. Thanks for having me. Glad to be here. My phone number sounds cool when you say it.

Robert Plank 1:24 Yeah, yeah, and I'm sure that that was not easy to obtain, but it's one of those things where you need to stand out, right, if you're a business owner of any kind, especially an attorney, there's so much competition, you get the billboard, you get the phone number, you do the podcasting, you do that publicity that in the present moment maybe does not give immediate results, and you think, like, well, why am I doing this? Well, for those long-term purposes, similarly to how maybe someone says, oh, why should I get an attorney for my business? Why should I have someone double-check these contracts? And I'm sure you would say, well, because you will regret it later if you don't do some of these things early, correct?

Matthew Fornaro 2:04 Correct, you know, it's all, you know, most of the business issues that I deal with in retrospect are all things that could have prospectively or prospectively been addressed and dealt with before they became major problems later on down the road, so it's all about, you know, preparation. It's all about anticipation. It's all about, you know, preventing issues that can happen down the road by just doing just very simple basic stuff to begin with, particularly when you start your business, or when you have changes to your business.

Robert Plank 2:37 Yeah, they say an ounce of prevention versus a pound of cure, they say floss your teeth, they say take a walk around the block, so you don't get a heart attack, you choose your metaphor. And as far as this prevention, what are the buckets like? If someone says, okay, I'm a startup or I'm a small business owner, and I'm like Matthew tells me that there's these like dangers like are there any kind of like categories or ways to break down what you do and what we should be on the lookout for?

Matthew Fornaro 3:09 Sure, it's all about you know starting up a business, no matter where you are, whether you're in Florida or elsewhere or wherever, it's pretty much all the same thing, it's all planning ahead, making good choices, making good business decisions, and planning for future, either success, which is what you're hopeful for, or if something negative happens, planning for if something negative happens. I don't want to say failure or anything, but if you encounter a diversity or different situations, so what happens is a lot of people are very excited to get into business, a lot of you know new first time business owners, entrepreneurs, whatever, that they just kind of skip over a lot of the due diligence steps, a lot of the proactive steps, a lot of the preventative steps, and they just kind of get into doing business, and then later on down the road, if they're successful, they may run into issues because they didn't do things to begin with, and they can't now sell their business, they can't bring people on, they can't borrow money, they can't do certain things, because they don't have the documents in place. And then, if something bad happens, hopefully it doesn't, but if it does, then the same thing happens, is that they may be personally liable, there may be issues as to who owns what, who owes what, and things like that, that are all prevented by when you start your business, making sure that you have things like a written business plan before you even get started, make sure that you have professionals that you rely on when you get into business, not just a business law attorney like me, but an accountant, a commercial banker, commercial insurance agent, things like that, and then before you even start your business, make sure that you consult with those professionals and figure out what is the best business organization for you based on your circumstances, because it's not one size fits all. Then once you figure out your business organization, make sure you have. The necessary governing documents in place, whether it's an operating agreement, bylaws, articles of incorporation, partnership agreements, whatever it is, make sure that's in place. Then you finally go online to wherever state you're located, or wherever, and register your business with the Secretary of State, the Department of division of corporations, wherever you know, in Florida, it's sunbiz.org elsewhere it's different websites, and then you know you're finally in business. Then you have to make sure you do your due diligence, things like make sure you get your EIN number and you have your tax information in good order, make sure you have your accountant standing by. Make sure again you have your attorney standing by. Make sure that you have contracts. If you have a relationship with any person or any other business, make sure there's a contract that governs that, and that's as simple as an email that covers certain bases, a terms of service on your website, an old-fashioned contract that you can just have Docusigned or e-sign. Now you don't even need to do things, you know, you don't have to physically hand people paper anymore. And those are the kind of like due diligence initial things that you start out your business with, that'll go a very far way in preventing you from having issues down the road.

Robert Plank 6:26 Very good, that's an excellent checklist for us to maybe rewind two or three minutes in the podcast and say, okay, Matthew told me to do this, this, this, and as you're saying that, it gives me flashbacks to the various business steps I've done, and it's, I had, I've been self-employed 20 years, and I feel like when I started, I was in my early 20s, and I thought that business ownership was more like rebellious, right? Like, you're almost an outlaw, like, "Oh, I don't want to be an employee, that's more like structured, and that's more responsibilities, but then the cruel joke of it is that business ownership is more, even more responsible than an employee, right? It's even more discipline, and but it just kind of maybe it faces on the outside that you have all this extra freedom and all these things to do what you want, but it's like it's, it's like, it's like 5x or 10x the amount of like stress and obligations, etc. And do when you deal with these new business owners, or you see the mistakes that happen, like, has anyone had a similar aha like that? Because, like, I just, yeah, if, if I knew then what I know now, I'd still do it, but I would definitely like take so many things seriously, and not have to clean up messes later.

Matthew Fornaro 7:47 No, definitely, Robert. I mean, it's, you know, there it's, you know, it's a double-edged sword, and you know, I don't want to use lame metaphors, but it's true, because you know, you get your freedom of having your own business or being your own boss, or whatever term you want to use, because you know allegedly you're not liable to the man, you know you're not punching in nine to five, you're not, you know, getting bizarre emails from your employer at all hours of the night, and you know you're not, you know, you don't have to go to weird obligatory company things, and all that stuff that goes with it, but at the same time, you are on a tightrope with no net beneath you. Money doesn't appear in your bank account every two weeks, or you get your paycheck every two weeks, every get paid. You don't automatically get your health insurance, you don't get your retirement, you don't get two weeks vacation every year, you're it, you're in charge, you have to do all that stuff, so it's, you know, on one hand, yeah, you get a lot of liberation and freedom because you're not, you know, part of the, the, you know, on the corporate hamster wheel, or whatever it is you're doing, but at the same time, you don't have that safety net, you don't have that infrastructure, you are the infrastructure, you need to do all the stuff. If you don't do it, your business isn't going to function, so it's a trade off, and it's not, you know, you know, yeah, you are kind of metaphorically like a rebel, and you're doing your own thing, or whatever, but at the same time, there's a lot of responsibility that goes with it, just that the, you know, just like how you don't have to be accountable to certain other people, you have to be accountable to yourself, and ultimately have to be accountable to, you know, regulatory agencies, the IRS, various other things, where that was handled via overhead, or whatever you want to call it, when you worked for the man, and now that you're not working for the man, and you're doing it yourself, now you're the one who's got to be able to do that. So, it's a trade off, and you know it's a lot more work to run, to start, run, and you know, operate your own business the right way, and do it, you know. Know, so it's in compliance with everything, and it's successful than it is to just, you know, kind of, you know, do like a side hustle or some other thing where you just kind of half ass do things or whatever, and maybe it works out or it doesn't, so it's a trade off, but yeah, there's definitely a lot of responsibilities, a lot of, you know, unforeseen or unseen or unpredictable things that go into having your own business.

Robert Plank 10:25 Fair enough. So it's a trade-off. It's not necessarily an easier path, it's just different configurations, right? That's a less of a cap on your income, but then all these other unpredictable unknowns that you may find yourself in. And I have another flashback here of maybe 10 or 15 years ago. I saw a lawyer present to business owners, and he was kind of like jazzing up the presentation, because to non-lawyers, a lot of the legalese can be boring, right? And he was saying, well, if you do this, you'll get sued, if you put this stock image on your website, and you know it's not yours, and you get caught $10,000 if there's a slip and fall at your place of business, then you know you'll get sued, and he was like, yes, you get sued, that you'll get sued, so I can see how maybe that is not useful, and then how that might make someone just like disregard the whole thing, and say, well, you know, there's.. I can't predict everything in the future, and it might be like cost prohibitive or time-prohibitive. So, because this one lawyer says you'll get sued, you get sued, you get sued, I'll just disregard the whole thing. So, I'm curious about just what.. what people maybe you might say, like that, like, do you have anyone when, when you're trying to help, do they say, like, well, it's, it's too overwhelming, or I don't want to take it seriously, or what kind of pushback do you get when you say, well, here's this checklist we should follow.

Matthew Fornaro 11:55 Yeah, you know, the frightening people, or you know, like the example you just gave up, you'll get sued, you'll get sued. Yes, you can get sued. Anyone could sue anyone anywhere for anything at any time without,

Robert Plank 12:09 It's America. So we do it.

Matthew Fornaro 12:11 So can happen. So when people you know want to start their business, or they come to me hopefully before they start their business, so I can do the most effective job, and we can plan and strategize, and you know, do things instead of in a, instead of react to things, we can anticipate and do things. Obviously, if you do the best job possible, and even if you don every guy, cross every t, follow, you know, everything that I said before, when we opened up, and all that stuff, things can still happen, because as you said, it's America. Anything can go down at any time. So you want to mitigate those risks, and you want to make sure that you give yourself the best opportunity to succeed or fail on the merits, as opposed to technicalities or issues. So that's why you want to make sure you do everything I said, you do. You want to make sure that you have robust insurance for your business, because that's what insurance is for. It's to cover issues that may happen if it's coverable, or you know, mistakes that may happen if it's coverable. So, you know, I never try to dissuade or frighten people out of business. I just try to give them realistic information and realistic expectations of yes, you know, when we were talking about, you get a certain degree of freedom, but there's a certain degree of even more responsibility, and you have to take that seriously, and in taking that responsibility seriously, you have to understand that you can be under siege at any time in your business, and you have to have that mindset that you know it can happen at any time, but you have to be as careful as possible. You have to do things the right way, you have to do things you know uniformly, objectively. You have to follow, you know, business procedures. You have to make sure you do all your technicalities and all your various things you have to comply with, and that'll eliminate much of the risk and much of the issues, and then again, that's why you have insurance, is for other issues that sometimes you can't eliminate, or whatever, but you know, I never try to frighten people and just say whatever, because that's not going to be effective. I try to give them good advice, and I try to let them know, like, yes, things can happen, but if you do things the right way, you're going to mitigate your risk. You're going to eliminate a lot of risk, but if something happens, that's what you have insurance for, that's what you have an attorney for, and that's what you have good business practices, good business systems, and make good business decisions.

Robert Plank 14:43 Very good, and I can see how useful it is to have someone like you who has already done some of the work, who they already know, so like, if, if the worst does happen, right, if there's a, if there's the lawsuit, if there's the cease and desist, whatever, they don't have to go in with. Run into the phone book and scramble, they say, oh, I already use Matthew to set some of this stuff up, he already knows me, knows my business, and so it's less of a panic moment, and as far as like getting this all set up, like I know every business is different, but you say that there's there's things like saying, well, what's the insurance, what's the compliance, what's the contracts, the EIN, the taxes, all these different things, and so if someone says, "Okay, I need Matthew's help to go down the checklist and get some of this in place, like, what's a ballpark? Is it like, you know, many 1000s of dollars? Is it like 10 hours, 20 hours is ongoing? Like, what's the cost and time commitment to get the foundation in place.

Matthew Fornaro 15:42 Sure, so it's not really well. Let's start it with this one. If you're getting into business, you have to understand that there's certain expenses and certain costs that there are going into business that you can't just magically wave away or use AI for, or use the internet for. So, again, my biggest thing is always the accountant. Make sure you have the accountant who does business accounting, not just, you know, did your mom's taxes and your dad's taxes when you were a kid, and now that's your accountant. You want to account and focus on business, on having, you know, businesses, small businesses, entrepreneurs, startups, same thing with attorneys. You want to make sure you have an attorney who focuses on doing business. You want to make sure you have a commercial insurance agent who focuses on doing business. This is a stable of people who you want to have at your side when you start your business, and you have to understand that in order to do your business the right way, in order to succeed, you want to have those people at your side, and you have to budget accordingly. So, in starting a business, it's really not as cost prohibitive as you would think it would be to have an attorney on your side, because you know it's standard-ish. Obviously, every business is unique, every business is subjective, but I gave you a whole list of things you have to do, pretty much every business you have to do those things, so I know what to do, so it's not like I have to reinvent the wheel or do whatever, if you come to me and you want to start an LLC, or you want to start an S corp, or you know you want me to review your commercial lease, or you want to get into a franchise, or something like that. So, a lot of what I do on the document review, document drafting, and document revision is on a flat fee basis, and it's not in the high 1000s of dollars, it's in the low 1000s of dollars, and then obviously for lawsuits and for, you know, things like that, I do that, I bill on an hourly basis, but that's, you know, hopefully you'll never deal with that, and that's multiple steps down the road, so it's not as cost prohibitive as you may have thought it once was, because I would say having an attorney today is much more democratized than it has been in the past, because due to the proliferation of just the number of attorneys, the proliferation of free information out there that you have to compete with, the proliferation of, you know, various websites, whether it's LegalZoom or Rocket Lawyer, or whatever, attorneys have to be competitive and have to be able to work with businesses, particularly if you're a business law attorney, have to be able to work with startups and businesses who don't necessarily have 1000s upon 1000s of dollars for retainers to pay like you did in the past, when there were only, you know, if you were in business law, it was at a big law firm. Otherwise, it was just whoever local business attorney or local attorney just kind of dabbled in business, or whatever. It's much more democratized, much more easily accessible these days. So, it's not cost-prohibitive, you know, have the professionals at your side, and don't be afraid of the legal bill, because it's a necessary part of making sure that your business is set up correctly and will succeed on its merits going forward.

Robert Plank 19:15 I love that way of looking at it, that that is just literally a cost of doing business, but it's not that much, and it's something that you know you must pay if you want to be safe, and you want to succeed, and maximize your chances of success, and and manage the possible loss or the risk, so you have this team of experts that, thanks to internet, legal, Zoom, AI, etc. it's sort of forced the attorneys everywhere to be more specialized and be more efficient, but hey, that's capitalism, right? We all win in that way. So now you can get that specific attorney who knows the commercial law or knows your industry or that specific accountant that knows your business, and that way you're not just dealing with the generalist, because sure, in 19. 1867 you just go with who was in town or who you know, but now you can look up exactly the person who you need for your business, and so it's been quite an education finding out about this, Mr. Matthew. And as far as this being a podcast, stories are always fun, right? And we can get an idea of what kind of adventures you went up to, especially serving clients. So, do you have any fun story to share with us, just kind of low-key showing off the magic of the work you do?

Matthew Fornaro 20:28 You know, Robert, I have many stories, which, you know, some of which we can't talk about on the air, but you know, I mean, it's just general stories about businesses, you know, planning properly, succeeding, and going forward. I mean, I have one where I had, you know, you want to talk about business preparation going forward, doing things, whatever. You know, I represent all kinds of different businesses, whether it's brick and mortar, or, you know, e-commerce, or whatever. So, I had a client who came to me with an idea before he actually even did anything. It was an app, and he came up with the app and wanted to form a business around the app. So we formed the business, we set it up correctly, we set it up as an S corp, because that's what me and his accountant agreed on. We formed it, formed all the documents, did everything. We went out, he designed his app, he got his intellectual property for the app itself. I helped him do the trademark for the for the app, and everything he did, proof of concept, all that stuff. It went live, and he started to develop it. Then it finally started to take off. So now it's in the Android store, it's in the Apple App Store, and it's got like six, yeah, it's got six figures of followers now, totally sustained viable business, and you know, I was there as the inception to help them get it off the ground. You know, it's kind of new and niche, and whatever, it's not your traditional business, but it's totally successful now. I have, you know, and it's good to see that he was able to do that. I'm glad I was able to help him do it, obviously he did all the business stuff, but I helped him set up for success, and you know it's good to see that it's taken off, and it's actually, you know, pretty popular now, so that's just an example of one thing, where kind of little niche, cutting edge tech thing versus your traditional business thing, where I was able to get in and help the guy and get us all his rights, all this stuff, and he's making money now, so it's good story.

Robert Plank 22:46 Yeah, he did it properly. And in that situation, like for some reason, I flash back to like I went to a casino once and to play blackjack. I didn't know how to play blackjack, I was just kind of, you know, playing around, and then I went and like learned the rules real quick, and it was a lot more fun, but there was like the pain in the middle and the kind of discomfort and the learning process, but on the other side of it it was like, whoa, way better fulfillment, and so you think about like, well, say you're a bunch of kids out in a field and you say, well, let's all play lacrosse or let's all play baseball or something, and you're just like throwing a ball around, you get bored after a while. It doesn't sustain, but if you say, "Hey, here's the rules, here's the bases, here's the team, here's the score, we'll get a real bat, get a real ball, it is a little more of a hassle to get all that figured out, and it is not fun when you strike out or you get tagged out, but then that seems like if you do, then succeed. If you win the game, or if you then do a game every week, it's like that's a lot more fulfilling, but maybe you don't realize it in the moment when you're just having fun, and it's like, well, you can just have fun with your side hustle of a business, but you look at what the future might be in three to five years, if you're still just having fun, you'll be back to the employment, right? You'll be back to nine to five, versus if you do put these rules in place, set yourself up for success, talk to mr. Matthew Fornaro, and whoever else needs to be on the team, accountant, etc. Then you can then get to that, you can get through the messy middle, the pain, the frustration, and have something that gives you a lot more joy in the future. It's just more of a delayed gratification than if you were fiddle farting around in the present moment. And so we've been jumping around and talking about all sorts of fun subtopics here, Mr. Matthew, but you're the star of the show here, so in this conversation we're currently having, do you think there might be a missing question that I should be asking you? I just don't know to ask you.

Matthew Fornaro 24:50 Sure, what about the use of AI in your business?

Robert Plank 24:55 Ooh, that's that's the real tricky one, isn't it? So, what about it?

Matthew Fornaro 25:01 So I love AI. I use AI in my actual practice of law. I use it in the running of my business, and it's incredible. It's a force multiplier. It makes you super efficient, whatever. However, I take absolute 100% ownership over all my AI use, and I fact check, I legal check, and I quality check all the stuff that the AI does, and the issue that business owners or people in business need to understand with AI is it's great, not just large language models, but specific AI platforms, specific AI apps, whatever. However, you're in charge, and you have to take ownership over the AI, and you have to make sure that everything it's putting out there is correct, that you fact check it, that for attorneys like me, you make sure that you check the legal citations and make sure it matches up legally, and make sure that the content and everything is appropriate, that it's not violating any terms of services or people's intellectual property, and it's a great part of your business. I encourage you to use it, but you need to use it responsibly and effectively, and that's the advice I give my clients regarding AI in their business.

Robert Plank 26:20 Very good in whatever usage it is, right, to check it, verify, to edit, and, and, yeah, we've all, I think, anyone that's used AI regularly has, when we check that output, some sometimes it is wrong, or sometimes you're like, "ooh, I'm glad I didn't let that, that paragraph slide, because that's definitely not something I would have said if I had done it myself, or I'd had an intern, so yeah, that's such good advice. In whatever form AI takes, they say that as advanced as it gets, the hallucinations probably will not go away. So there will be always that need to check what it outputs, because heck, it's not a replacement for us, right? It's just an assistant, it's a force multiplier, as you say, and so if someone says, okay, I've got quite a beginner's education about maybe some of these dangers in front of me, or some actions like should take to set myself up for success, and I want you to check out this wonderful attorney, Matthew Fornaro, who is in Florida, and his phone number is 888 FLA Lawyer, and he can help with these areas of expertise and business transactions, business formation, litigation, local council, intellectual property, real estate, arbitration, mediation, so much more. What are the next steps here? If someone says, okay, I should speak to Mr. Matthew Fornaro, but what about, and I may be a little shy to contact him. What would you say to someone who knows they need you and should take the next step?

Matthew Fornaro 27:56 I'm a nice guy, don't be afraid of me. Please go to my website, fornarolegal.com, email me, text me, call me, reach out to me on social media. I'll be glad to answer your questions and help you.

Robert Plank 28:12 Very good. Fornaro, Fornaro, I can't, it's like tomato, tomato, right? fornarolegal.com, and 888 FLA Lawyer. And is there like a geographical limitation? Do they have to be in South Florida, or can they be anywhere?

Matthew Fornaro 28:29 Well, I'm licensed to practice in Florida, New York, and Washington, DC, so I can do anything in any of those three jurisdictions. However, I have clients all over the country, and also internationally, who I can help, depending on what it is they need help with. So, reach out to me if I can't help you. I have a whole slew of attorneys who I know, who I can refer out to in various geographic areas, or in other practice areas.

Robert Plank 28:58 Oh, so it's worth having that conversation. Don't be that self-defeatist, for all you know, Matthew knows someone, and he can refer you, or he can say, "Oh, yeah, here's a possibility, here's a solution. And attorneys are so cool. I think I didn't realize until I was a grown-up and had to do all this businessy stuff that attorneys with the insane work ethic, and the personality, and the relationship building and the communication skills, like I'm in awe of it, of what's required, and they're just there, they sure are dedicated, but the ones I've dealt with are great people to talk to, and I love the problem-solving mindset, and so Matthew Fornaro, he helps you with forming a new business, drafting or reviewing key contracts, resolving disputes with partners, vendors, or customers, litigation, arbitration, or mediation. It's worth having a chat with him. He is based in South Florida, but as he said, he's admitted to practice in Florida, New York, and the District of Columbia, and he's mentored attorneys and. Business founders through entrepreneurship programs, so he's all about those relationships, and he's a top-rated lawyer who's won many awards, and so the place to go is for narrowlegal.com m for narrow at for narrowlegal.com He's on social media, we'll have the links in the show notes, 888 FLA Lawyer, but before I let you go, Mr. Matthew Fornaro, it's time for the scary part of the podcast, where I tried to stump you. I tried to put you on the spot by asking about a fun or interesting quote or lesson that has served you. So, what comes to mind as far as a fun or interesting quote or lesson?

Matthew Fornaro 30:36 Sure, so there's an interesting quote that deals with having a business. I'm a child of the 80s, so I love all 80s stuff. So you may remember, I don't know, Robert, I'm probably a little bit older than you, but do you remember the all the Dunkin Donuts commercials in the 80s with the guy who made the donuts with the little mustache.

Robert Plank 31:02 No, not at all.

Matthew Fornaro 31:03 Okay, his classic saying was time to make the donuts. So I always keep that in my mind, because it's always, if you're it's a whole anthology of commercials about how this guy would never stop getting up in the morning and go make the donuts, because he had to go to work and he had to make a donut, so time to make the donuts, it's always a mantra that I remember, because I love the 80s, I love Dunkin' Donuts, and you know, it's time to make the donuts, that's why when it's like when I have to go do something, or like I don't feel like getting out of bed, or whatever, time to make the donuts, so look that up on YouTube. There's probably like I was probably in about 50 plus commercials in the 80s about that, so.

Robert Plank 31:47 Nice, so we must be consistent in the same way those commercials were consistent and prolific. So it's time to make the donuts, especially if you have that startup idea, that app idea you want to set up your business the right way. Contact Mr. Matthew Fornaro, his phone number is 888 FLA Lawyer, and fornarolegal.com. So, thanks so much, Matthew, for educating us and being a great guy. I'm glad that we had this conversation about what's important for these up-and-coming business owners. So, thank you.

Matthew Fornaro 32:18 Thank you, Robert. Thanks for having me.