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When Should a Freelancer Hire an Attorney?

Making a deal for business, shaking hands over a deal
By Lisa M. Schaffer, Esq. on August 23, 2018 | Last updated on March 21, 2019

In this new age of the gig economy, many people have a side-hustle as a freelancer. At first it may seem like a great way to make a few extra dollars, but if you want to protect this fledgling career, you may want to consider hiring an attorney to protect your interests. Here a few issues in a freelancer's life when an attorney comes in handy.

Agreeing on the Scope of Work

As a freelancer, you've just found a new client. Great! But with this comes some ambiguity over expectations, on both sides. You may want an attorney to draw up a contract detailing the scope of the project, to include such deal terms as expected product, duration of project, payment, deadlines, and milestones. This will help create a "meeting of the minds" and minimize disputes. Fortunately, if you do the same sorts of projects for future clients, you may be able to use the same contract template, and minimize future legal costs.

Protecting Your Intellectual Property

As an employee, your employer owns all of your ideas you create while doing work in the course of your employment and using their equipment. But if you are a freelancer, ownership of such intellectual property is open for interpretation and negotiation.

Generally, if a client wants to keep the intellectual property you created in the process of their project, they should pay you an additional fee or a higher rate. Do you really want them to be able to own it? Or maybe just license it for a set period of time? As you can imagine, this can get dicey if you create a profitable idea. It's best to agree to this upfront, and the wording must be precisely accurate, and best left to an attorney.

Collecting Fees

It is an unfortunate aspect of freelancing, but you have to do your own Billing and Accounts Receivables (and your own IT work!) If a client doesn't pay you, you will have to choose to take more aggressive steps or decide the debt is unrecoverable. It can be difficult to send demand letters for payments, especially if this isn't in your wheelhouse or if you are concerned it might affect your business relationship. An attorney can send collection letters for you, and may have more bark, and more bite, than you.

The Dreaded Self-Employment Taxes

As a freelancer, you will be responsible for paying self-employment taxes, which include Medicare and Social Security taxes. These are filed quarterly, in addition to your quarterly paid income tax, and are based on calculations from your 1040 Form. You may be able to determine these on your own, but if you can't, seek the help of a tax attorney. They can help get you started on the right schedule, because if you aren't, the government will assess fines. (I know, shocking!)

If you are a freelancer, and think you have some outstanding issues that could use legal help, contact an attorney to get a legal assessment of your situation. Just as you wouldn't go to a heart surgeon for plastic surgery, don't go to just any attorney! Contact your local tax, intellectual property, or contracts lawyer to talk about your needs and find the one that fits your issues best.

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