Contract Law and Superfans with Megan Porth

Contract Law and Superfans with Megan Porth 


[00:00:00] Freddy D: Today on the show we have Megan Perth, who will be talking about the importance of legal contracts and how lawyers can create super fans. 


[00:00:08] Freddy D: Hello, Megan, welcome to the show. 


[00:00:10] Megan Porth: Hello. Thanks for having me today. 


[00:00:13] Freddy D: so how'd you, what made you become a lawyer? 


[00:00:15] Megan Porth: Yeah. My family asked me this question almost on a daily basis. Why are we here? And it is interesting because I come from a family of entrepreneurs actually. 


[00:00:24] Megan Porth: I'm the first person in my family to go to college. I'm the only person to get their graduate degree. Because what we do in our family is we start businesses. That's what we do. So when I decided to go to law school, my family kept going, why? What are you doing this for? And it really was inspired during my work as a lobbyist with the Arizona Department of Veteran Services. 


[00:00:45] Megan Porth: So I was a legislative liaison. I was hired on very early in my career. I was in my early twenties. I had no idea how that job even I got that job that young. And what I was doing is I was dealing with the legislature quite often in [00:01:00] that particular capacity. I was working as a lobbyist on behalf of Arizona Veterans, and I just got so frustrated with their lack of movement and the double speak and telling me something was going to happen and then it never did. 


[00:01:15] Megan Porth: And gaslighting and all the things that happened that I finally said, you know what? That's okay. I'm just gonna go to law school so I can sue you all. We can protect these veterans the way that we're supposed to. And what was funny is, although my advocacy on behalf of veterans in the state is what got me to law school, what kind of pushed me towards back to my roots. 


[00:01:38] Megan Porth: I. Really? Was essentially the the work that I was able to do while I was in law school. I took a contracts class and I loved it. I thought it was so cool. It was like a big old puzzle to solve, and I really also got to see, because of my history growing up with entrepreneurship, I got to see, oh, okay, this is what it looks like on the other side when you're drafting the contracts. 


[00:01:59] Megan Porth: And [00:02:00] to see how impactful and how important they could possibly be. Although I, yeah. So although I started with a a bent towards advocacy, I found that where I really wanted to spend my days, what the, what I had the most fun doing was helping small to medium sized businesses realize their dreams. 


[00:02:17] Megan Porth: That was really what I wanted to do. 


[00:02:19] Freddy D: Yeah. My, My friend from second grade , He went to George Washington Law School and he ended up , being a contracts guy. Exactly. And he loves the contracts. He worked for years in Minnesota at Wells Fargo in the contracts department with big. Business acquisitions and investments and all that kind of stuff. 


[00:02:40] Freddy D: And that just, he just loves all that paperwork and all the structuring of things. He's a master writer still today. When he posts his stuff on Facebook, his writing is just impeccable. I just don't, he's got a gift for that stuff, 


[00:02:54] Megan Porth: yeah, contracts can be fun. Obviously it takes a certain personality type. 


[00:02:59] Megan Porth: I [00:03:00] guess maybe not. I, the contracts attorneys that I need, they're, we're all different. But I think the reason why I love it so much is because it's. iT, it does more than just, in fact, actually, ironically, your contracts will be used 99% of the time they will be used outside of a court of law. 


[00:03:19] Megan Porth: So what was really fun about it is that you got to develop BA boundaries, which I think helps create. Brand loyalty and customer loyalty by the way. 'cause you're managing those expectations. But it also shows you a level of professionalism and and it's a puzzle. That's why we like it. They're puzzles, that's all they are. 


[00:03:36] Megan Porth: We gotta figure em out' 


[00:03:38] Freddy D: Sure. Yeah. And I have a, I always say, that, contracts, nobody cares about the contract. They sign it. A lot of people don't read it. Yeah. They just sign it and it's good. And if business is well, nobody cares about the contract. I. And then the left hand turn comes in, a speed bump happens. 


[00:03:54] Freddy D: Something goes an issue, and everybody grabs the paperwork and, okay, what's going [00:04:00] on here? And that's the importance of this is where I think the value of having a good contracts attorney becomes imperative, because that's when the difference. Is the verbiage in the contract, how it's positioned, how it's worded, can make a difference. 


[00:04:16] Freddy D: And a lot of cases, that's where a super fan of the business that has a contract done by a good contract lawyer. They're they become a super fan of that lawyer because it saves them a lot of potential headaches and heartaches and financial stuff and et cetera, et cetera, et cetera. 


[00:04:34] Megan Porth: And a lot of the work that I do when I'm drafting an agreement, Is talking to the clients. And maybe this is where I'm lucky in that I'm a second career attorney. 'cause I was in sales, I was a lobbyist. It, pretty much every job I've ever had has been some form of persuasive communication. And one of the things that I, I. 


[00:04:56] Megan Porth: I am able to illuminate to my clients is [00:05:00] that these contracts are actually, you shouldn't sign them and put them away. They're there to govern our relationship and they're there to manage the expectations. So you are right because there's so much mis there's so many misunderstandings around contract law and the terms and there is language that is extremely intimidating. 


[00:05:18] Megan Porth: There's not a, a layman on the planet. Who's running around talking about indemnification provisions in casual conversation. It's just, it doesn't happen. So because of that, I think a lot of times people will sign the contract and put it away, but the truth is that contract is just a another form of communication. 


[00:05:35] Megan Porth: Another way to manage your client's expectations, and when your client's expectations are managed, this is what I learned in sales. They are happier and ironically, less litigious. So the same. Absolutely correct. Yeah. So the same concepts that apply to managing your sales staff can actually apply to risk mitigation too. 


[00:05:55] Megan Porth: Taking good care of your customers, managing their expectations, [00:06:00] putting everything in writing, ensuring that they understand what you are or are not doing for them, and then making sure that there's, that they understand the terms, in particular, the payment and delivery of whatever services or products you're going to give them. 


[00:06:15] Megan Porth: All of that. Creates happy clients every time and 


[00:06:19] Freddy D: happy clients become business super fans. Exactly. They'll go out and promote and says, this company not only delivered says or does what they say they're going to do and deliver what they say they're going to deliver. They do it timely, they do it efficiently, and you know that, that is huge for a business to, and 'cause a lot of times. 


[00:06:41] Freddy D: Things fall apart because businesses don't deliver what they said they're going to deliver. 


[00:06:48] Megan Porth: And there's a huge disconnect. As far as contract law, and there can be a disconnect between the individual who's doing the sales and the person who is actually implementing the service or the product, that's another thing that [00:07:00] I see. 


[00:07:00] Megan Porth: So my rule in case you're wondering what a rule for contract law is to under promise in your contracts and then over deliver Absolutely. Your services and what that does. Psychologically for the end user, for your client is it allows them to not only understand and budget for what you are going to be providing. 


[00:07:20] Megan Porth: 'cause a lot of times what happens is we will say something. Let's say I'm building a website. I may say I'm going to build you a full website. But I'm taking for granted that you don't know what that actually entails, right? So maybe you don't know that I'm not gonna host the website for you. 


[00:07:37] Megan Porth: The end user may say, oh, this is a great deal. This is only $5,000. I'm going to go ahead and hire them. And they don't have enough money for the hosting. They didn't build that into their budget. Correct. So by, by allowing, it allows them to build that into their budget to really understand what they're going to need to do on their end. 


[00:07:54] Megan Porth: But also at the same time, if you bonus them anything. Then you look like a great guy. And [00:08:00] this is what I usually talk to my clients about. They say, oh, and we'll, we may do this, we may do that. Any of the maze, leave them out of the contract. Absolutely leave them out of the sales pitch and surprise your client with this great bonus. 


[00:08:14] Megan Porth: Because what will happen is whatever is listed in the contract, I want you to know, just like you said, in it, once those things go sideways or at any point if they have a question, whatever is in the contract. In their mind, they've paid for it. Oh, absolutely. Absolutely correct. So there's no extras. 


[00:08:30] Freddy D: Right? And you make a great point about, doing, tossing that stuff in my book, creating Business Superfans, one of my chapter is the Unexpected Extra. and that's the really, the importance is, that's how you start creating super fans is, here's the expectation and here's the contractual expectation. 


[00:08:47] Freddy D: And oh, by the way, In an unexpected way. Here's, I'm gonna give you this, and here's this is, I'm gonna toss this in, so stick it to the website. We're gonna get you listed into the different local directories and [00:09:00] we're gonna include that as part of the package. No extra fee, because, we think it's gonna help grow your business. 


[00:09:05] Freddy D: And our job is to grow your business. That customer is gonna go, wow, these guys are great. And it's, and by the way they're not obligated. It's not in the paperwork here. So this is really an unexpected extra, which is like what you mentioned. Yeah. And that's a simple way to create a super fan from, going above and beyond what the contractual agreement says. 


[00:09:26] Megan Porth: No, that's a, that's exactly the whole point. And I love that you talk about that, that you called it the unexpected extra. Yep. And it, that I've always, that's exactly what it is. I'm bonusing this to you. I don't have to do it, but I'm a real good guy and I think that. That simple practice of not putting every single thing that you are going to do, what you have to do needs to be in the contract. 


[00:09:50] Megan Porth: But what you could possibly do should not, because for one, you may not have the capacity. We can't predict the future. But also, like you said, you create superfans when you say, [00:10:00] listen, I know it's not in the contract. But we really feel that this would be helpful and for no extra fee, we're gonna do this extra thing. 


[00:10:07] Megan Porth: Oh man, do people love you for that 


[00:10:09] Freddy D: kind of stuff? Oh, it's, they're gonna tell and they're, now, you just create a super fan. It's gonna tell all their business owners Yes. That that the, this company did this and did that extra, and all that stuff. And it, it's huge. Yes, 


[00:10:22] Megan Porth: absolutely. 


[00:10:24] Megan Porth: Va the value added is, Like I said, not only does it create a business super fan, it actually can help you in reducing your liability. A happy client is willing to work with you, work through an unexpected or even unexpected and negligent outcome. Yep. Yeah. 


[00:10:44] Freddy D: Because they're gonna be more, You have a super fan or it may not yet be a super fan, but the, you have an issue that comes up and and it's a contractual issue and you're having a time an issue delivering it, okay? 


[00:10:58] Freddy D: Life happens. Yep. [00:11:00] But you keep that customer informed and engaged. And that's what a lot of people do is they say you know what? I didn't hear nothing. I'm not gonna call 'em. I'm not gonna do anything. Yeah. I'm just gonna hope that they won't notice. And instead, the opposite way I think is, call 'em up and Hey look, we got this, Megan, we got this particular issue. 


[00:11:16] Freddy D: I know we're obligated to provide it. Here's what's happening. Let me know. We're working on it and all that stuff. You're gonna go, okay. I understand that I appreciate the phone call and let me know what I can do to help to get this thing logjam worked out, worked through, and once you do you get through it, you'll most likely convert them into a super fan because of the fact that not only were you transparent about the problem, you resolved it, and now they're gonna go, man, this guy, this company's got integrity. 


[00:11:46] Freddy D: They're good people. We like these people. And just like you said it changes the dynamics. 


[00:11:52] Megan Porth: Yeah. And ironically, sometimes those points of conflict are those opportunities to take [00:12:00] a client who's just a basic client and turn them into a super fan. Absolutely. The way that you handle that situation, if you handle it well and you take good care of them. 


[00:12:10] Megan Porth: They will stick with you for life. And that's where I think you're right, and we all fall into this. I fall into this where it's oh gosh, I just don't wanna face this situation. I don't wanna really address it. I'm embarrassed. We live in a culture where I. Producing. We are high producers, right? 


[00:12:27] Megan Porth: And so mistakes aren't really or not producing at the level that you think you should is really difficult on us. But you're right, ironically, by being able to address it and address it in a way that is very client conscious, right? We'll take that normal, average, everyday client who's yeah, they're okay. 


[00:12:43] Megan Porth: They're great. Or they're okay. They're doing the job. Two, they are great. I love them. We had an issue and the way that they resolved it was beautifully done. So it's weird the way that business works that way. Sometimes those conflicts actually give birth to these wonderful career long relationships. 


[00:12:59] Megan Porth: I. Right. Where 


[00:12:59] Freddy D: if [00:13:00] you had a horrible relationship with that customer, it could go. Now the, all of a sudden the knives come out the lawyers get involved and it's a mess. And at the end of the day, really nobody wins. 


[00:13:10] Megan Porth: No one ever wins when there's a messy contract. And that's what I try to tell everyone. 


[00:13:15] Megan Porth: No one really ever wins in a lawsuit either. 'cause even when you do win, you've you and you get all of your attorney's fees back. You don't get those years and that stress of your life back. So it really does help to have to create that loyalty within your client base by treating them really well. 


[00:13:31] Megan Porth: And honestly, the contract is the first step. Maybe your proposal is your first step, but in actually having your engaged customer and someone who is working for you. That contract creates a super fan in that it manages their expectations. It also allows you to bonus them any of your extras. 


[00:13:49] Megan Porth: It allows you for a dispute resolution process. But here's the other thing I tell everyone. Boundaries within a relationship, no matter what it, what relationship it is, makes the other [00:14:00] party feel safe. And that's the other aspect of contract law that I really love when I get a contract and I know exactly what this vendor is doing for me, and I know exactly how much I'm paying. 


[00:14:11] Megan Porth: And even Freddy, when they say to me, oh, I'm not doing this a long list. We're not doing all of these things right. I chuckle at it, but I also feel very safe. I know what I'm getting into. I know that this person isn't going to come out with some random charge. Either from them or a third party that I wasn't anticipating because I don't know their business. 


[00:14:31] Megan Porth: I have no idea how to do what they're doing. 


[00:14:34] Freddy D: Yeah, no, absolutely correct. So how can, lawyers in general build super fans of their existing clients and get out of the transactional mindset and more into the relationship 


[00:14:48] Megan Porth: mindset. 


[00:14:50] Megan Porth: Yeah, this is a really hard one. 


[00:14:51] Megan Porth: I practice a little differently. I offer flat rate billing and limited scope representation. You'll hire me to review or draft or negotiate a contract or to [00:15:00] form your L C. But I'm not on retainer like, like other attorneys are. So because of that fact I think my mindset, even the mental paradigm has shifted a little bit. 


[00:15:10] Megan Porth: So for, for me it's, I. Because I'm not billing by the tenths of an hour like a normal attorney does. One of the things that I'm able to do is to actually take calls from clients and not charge them, for little questions that they're asking me. Hey Megan, I know you drafted this contract but somebody wants to change the indemnification provision and take this out. 


[00:15:33] Megan Porth: Is that okay? And I'll write them back and I'll say something like, yeah, it's okay. Or No, push back on this one for these reasons. So traditionally, if I were billing by the hour, I would send them an invoice for my six to 15 minute call. And and you feel that every time I don't do those types of things so that the client feels comfortable calling me. 


[00:15:55] Megan Porth: 'cause what ends up happening, I. And this was a little experiment when I first started practicing law to see [00:16:00] if maybe if there would be such a deficit by doing this right. Offering, just taking calls, offering free consultations and things like that. But what ends up happening is they always come back and they's always send their friend 


[00:16:13] Freddy D: You've created a super fan because, you bring up a so spot for me , a long time ago is about 20 years ago I was involved in a legal matter. 


[00:16:23] Freddy D: A divorce and the lawyer was charging me 15 minute per phone call. And 


[00:16:30] Megan Porth: whether you were on for 15 minutes or not, exactly. 


[00:16:33] Freddy D: And that was the part that really became annoying. Yes. Because it'd be like a two minute phone call and I'd, and he'd be like, okay. And he says, all right we're all done here. 


[00:16:40] Freddy D: And wait a minute, I got more questions. I'm looking at my clock on. Yeah, wait a minute. You're just making four 13 minutes or free money. And I got more questions and it was like, and it just felt. Weird. And I was unappreciative of that because now I felt like I was not being treated properly and it was, I [00:17:00] was felt rushed and 


[00:17:02] Megan Porth: yeah. 


[00:17:02] Megan Porth: And taken advantage of. And that you didn't get the money. 'cause this is what I have found, and this is go again, goes back to my sales background. If people feel like they are not getting their money's worth, They will not continue coming back to you, and they will not give you leeway if you don't produce. 


[00:17:19] Megan Porth: So again, you have the loyalty and the litigation or the liability side of it. Neither one of those are satisfied when people feel like they did not get what they paid for. So the practice of law, the way that we, and I understand you for instance, for litigators, it's really almost impossible to do flat rate billing, right? 


[00:17:39] Megan Porth: Oh, sure. You 


[00:17:40] Freddy D: don't know how that's. But don't, but don't do this 15 minute phone call. Yes. Yes. I have no problem. Yes. If, okay you're at the courthouse or you're preparing the paperwork and all that stuff, that's fine. But don't nickel me and dime me on a phone call and cut it down to, two and a half minutes and bill me for 15. 


[00:17:57] Freddy D: Absolutely. That's where I go. Okay.[00:18:00] Timeout. That, that, that's not 


[00:18:02] Megan Porth: right. Yeah, no, I agree with you. It feels very unfair and exploitative. So I think that would be, obviously anywhere that you can provide value added to your clients where you're not, where you're looking at it more in a client driven way. 


[00:18:16] Megan Porth: And like I said, this is a balance. It's an art. It's not there's sure. Totally agree. There's no hard, fast rules. So you wanna make sure, of course, that you're not giving all of your time away 'cause that's all you have to sell as a lawyer. But also that you're being cognizant of, hey, they asked me a couple of questions, it took me two minutes. 


[00:18:33] Megan Porth: I'm not gonna necessarily charge them for that unless of course they continue, calling me and they're all two minute calls and I have, an hour and a half of two minute calls. The other thing that I think lawyers could benefit from greatly, In managing a client's expectation, and I know that this sounds weird, but I think that they should bill their clients more often. 


[00:18:54] Megan Porth: So the traditional model is you give an attorney. Retention fee. Let's say [00:19:00] it's $5,000, and then for all the work that's done, that attorney charges against that. And then they send you an invoice. They say, okay, last month I spent $1,500 of your $5,000 retainer. I, what I have heard from most of my clients who are dissatisfied is that especially the first month that they retain the lawyer, They didn't get the bill until 30 days after all the work was done. 


[00:19:27] Megan Porth: They didn't they weren't placing it. They don't, firstly, if you're involved in any form of litigation and you're dealing with a lawyer, let's be honest, you're, you have other things you're dealing with, right? So you're not thinking about how many times did I call my lawyer today? So I feel like if lawyers are billing, or at least reconciling the account more often, let's say maximum 14 days, but ideally every week, sending out a notice, Hey. 


[00:19:51] Megan Porth: This week you spent a thousand dollars of your retainer, just wanted to let you know. Then people can start to manage their questions. They can [00:20:00] be thoughtful in the emails that they send you instead of just running through this $5,000, not really realizing that this money's being eaten up that quickly. 


[00:20:10] Megan Porth: That's a great, 


[00:20:11] Freddy D: That's really excellent advice because then it creates a win-win scenario because now the client. Realizes like you just said, oh, wait a minute. Was that question really is this question we're about to send. Really relevant? Or is it just me just wanting to be heard know? 


[00:20:30] Freddy D: Yeah. And it's not necessary right now. And I can hold off and I can just be patient , or and I can say, oh, wait a minute. I need to reload and I gotta plan because we're gonna, it's gonna cost me another five grand. And this is turning into a bigger thing and versus, oh my God, it's five grand. 


[00:20:45] Freddy D: We can't do anything more until we get to another five grand. And so it's a whole nother. Yeah. 


[00:20:51] Megan Porth: And then that way you can, because I think a lot of lawyers. Take for granted what giving an attorney a retainer fee looks like, whether it's a [00:21:00] thousand dollars, $5,000, $10,000, most Americans, that's a lot of money. 


[00:21:05] Megan Porth: Just to have somebody hold in a, in an account and charge against. So I think that's one of the things that I think a lot of lawyers kind of misunderstand because we do handle a lot of money, especially litigators. It's a lot of money. Okay. And so I think that they take that for granted and don't recognize that this is a lot of money and it's, it can make it, it puts people in a difficult position. 


[00:21:26] Megan Porth: And so by notifying them more frequently how they're spending their money, I think that they can be more cognizant, they can spend it more wisely. But it also, on the backend, it helps the lawyer also to manage those clients. So a lot of our time is spent. They call us counselors of law for a reason. 


[00:21:46] Megan Porth: A lot of my time is spent listening to somebody just vent, right? So that's fine. But if I'm billing you by the hour and my rate is 350 to $450 an hour, and your therapist rate is [00:22:00] $125 an hour, you sure? You should know that, so that if we're gonna do an hour's worth of counseling where you're just venting and we're not getting down to any of the legal matters, you should know you're paying me a premium to do that. 


[00:22:15] Megan Porth: So I just think it helps to manage the client as well as the attorney's 


[00:22:19] Freddy D: time. Oh, absolutely. I think that makes that makes great sense. bEcause it's a win-win all the way around because the it that, Attorney that does that, uses that approach is gonna create a super fan out of that customer because now they're gonna be in the know and they're gonna go, oh wow. 


[00:22:36] Freddy D: Thank you for the heads up. Yes. I didn't realize I was burning through that cash so fast. Yes. Et cetera. Let me, talk to, to my partner and tell them to quit making the phone calls and quit sending out emails. Yes. Because it could be someone else that's part of the whole puzzle that they're, they are, feel like. 


[00:22:52] Freddy D: They're not informed, so they're reaching out. And so now the attorney's gotta deal with two, three people for the same thing. And everybody's got a [00:23:00] different question. And the next thing you know just like you said, poof, the money's gone. And had there been some heads up and say, Hey, partner number two is driving me nuts. 


[00:23:09] Freddy D: Here's reaching out to all these micro little thingies that are really insignificant. And it's burning through the cash. Wanna give you a heads up, 


[00:23:18] Megan Porth: so that's exactly, tho that scenario happens so often, and especially if one of the partners is the money person. The other partner is maybe more of the implementation or idea person, and then the money person is going, wait a second. 


[00:23:33] Megan Porth: You're not the one who sent over the check. You're not the one who's seeing this. And it allows, and like you said, I feel like our job as lawyers is to make the partnership less. Contentious, and that's one of the ways that we can do it. That's one of the ways that we can help the cost conscious partner rail in or reign in, sorry. 


[00:23:52] Megan Porth: Reign in the least cost conscious partner. I understand you really love talking to our lawyer. She's fun, right? [00:24:00] But let me tell you how much it's costing us. So then that way you, you have that tangible and it's, and you catch it early. Yep. So like I said, that 5,000 bucks is important to businesses and if they don't know that they've already spent it in 30 days. 


[00:24:13] Megan Porth: I I, that's what I hear mostly from people who deal with lawyers who bill by the hour. They just, all of a sudden, 30 days later, I get this invoice and not only did they spend up the $5,000, now I need another thousand for what they did additionally. 


[00:24:25] Freddy D: Megan how can people get ahold of you? 


[00:24:29] Megan Porth: Absolutely. We are virtual and web-based. I'm located in Arizona. Licensed in Arizona only. I can provide periodic help in other jurisdictions other than Hawaii and Texas, I believe. So people can reach me, but mostly Arizona is where I focus. You can reach me by going to www.yourcontractshop.com. 


[00:24:51] Megan Porth: That's my website. You can go ahead and get my email address off of there, which is megan@yourcontractshop.com, or call my receptionist, which is usually [00:25:00] the best bet to get on my calendar. I'm booking about two to three weeks out, sometimes a month out, so that's usually the best way to get ahold of me. 


[00:25:07] Megan Porth: And that phone number is six oh two seven five three. 1264, but everything's on my website, including Frederick. And this is the one thing I can tell you too that creates massive super fans in my clients. I post my rates on my website. My clients love the transparency. They love it. I think that has created superfans before they've even called me before. 


[00:25:30] Freddy D: No, it's that's impressive because, we met through a local connection Yep. Years ago, Uhhuh and we've done numerous transactions together. Yes. Thank you. And you've been wonderful for my business and Oh, thanks. And other businesses. So I think it's, if anybody does have, Contractual questions, wanting to set up themselves a business get some guidance legally from a business perspective. 


[00:25:56] Freddy D: Megan's her girl, I. 


[00:25:57] Megan Porth: Oh, thanks Frederick. And just so that your [00:26:00] listeners know, I do a free 30 minute consultation, so they can call that number, set up a client consultation on my calendar and we can chat about your issues. Also on my website I have a free guide on how to write and review contracts. 


[00:26:15] Megan Porth: So you can go on there and it just says, write a killer contract here and you can download the P D F. 


[00:26:20] Freddy D: Great. All right. Megan, thank you very much for being on the business Super Fan podcast show and we will look forward to having you on the show again in the near future. And thank you very 


[00:26:31] Megan Porth: much. 


[00:26:31] Megan Porth: Thank you for having me. I look forward to it. 


[00:26:34] Freddy D: All right. Bye-bye. Bye.