‘Don’t call us when you get arrested’
This article first appeared in the 1st quarter 2019 edition of Personal Finance magazine.
Attorney Eitan Stern can remember exactly when he last wore a pair of formal shoes. “It was a few years ago, on the final day of my previous job, and I gave them to a man begging for change.”
This man sports a topknot (quite coincidentally, the preferred style of samurai warriors), doesn’t freeze if someone calls him “dude”, and never resorts to Latin when colloquial English would do the job. None of these things defines him or his work, but it all fits.
Stern is founder and director of a creative legal agency called Legalese, a place where tech entrepreneurs, start-up dreamers, musicians, filmmakers and other interesting people go for help with “the legal stuff”. They get it from a young, multi-talented team that actually gets excited about its work. As Stern tells it: “Many creatives find conventional lawyers intimidating and expensive. We aim to fix that by doing things differently.”
Not that he has any illusions about the job. “Being a lawyer is tough, and there are long and difficult days. But I work for clients and companies that are making a real difference in this country.”
Stern worked as a commercial lawyer until 2014, when he switched to providing legal services for musicians, using a computer in his bedroom. Photographers, designers and other creatives soon got to hear about him, and his business began to grow, eventually evolving into Cape Town-based Legalese.
It is not a registered law firm, emphasises Stern. Why not? The explanation, according to the firm’s founder, is disarmingly simple: “By not registering, we’re able to avoid the requirements of traditional law firms, as well as many of the expenses involved.”
Can one presume the savings are passed on to clients? He nods. “We discovered very quickly that people in the creative space didn’t want the three-piece suits and opaque relationships associated with so many law firms. Instead, they were looking for people who understood their culture and spoke their language.”
As Stern points out, things change. “In an ideal world, the Law Society would include and regulate consultancies like ours. If they wanted help, I would be first in line to get on board.”
Are people nervous about consulting lawyers because they envision huge expenses or protracted litigation that will suck up all their money? Does the term “billable hours” make them want to run and hide?
“Definitely,” replies Stern. “We had to re-train our clients to help them understand how we work, and to extract the best from our relationship. It helps that we speak an intelligible version of English.”
As Stern sees it, lawyers are generally called in to fix problems, whereas his team anticipates potential issues and addresses them with a tailor-made mix of modern technology and innovative thinking. “We aim to be constructive and pre-emptive, always working within the parameters of the law. We believe lawyers are best used prophylactically. Don’t come to us when you already have a mess, and don’t call us when you get arrested.”
People place a lot of faith in lawyers to just “fix things”, says Stern. “However, if you’ve run your business into the ground and expect a lawyer to wave a magic wand, it’s a tough ask.”
Do start-up clients immediately identify with the Legalese vibe and say to themselves, “Hey, these are my kind of people”? They do, says Stern, but first impressions are only part of the story. “It’s one thing to look the part, and quite another to offer value to our clients.”
Among those clients is Nick Bush, founder and head brewer of the Drifter Brewing Company in Cape Town, the company responsible for a unique “underwater” beer aged in the chilly waters off the Cape Peninsula. Says Bush: “I liked the idea of working with lawyers who were dynamic and looking for a variety of opportunities, as we were. They love helping start-ups and they see the potential in future industry leaders.
“When I first met Eitan, it wasn’t some stiff business meeting. He wants you to understand the whole process and make sure you know what you are signing. Legalese has helped us with everything from basic liquor licensing to our latest equity crowdfunding round, which has just gone live, and they help us to navigate the complex South African legal system.”
In a somewhat daring move, Legalese publishes an online price list for its services, ranging from the “Freelancer Package” (R6 250) to the “New Business Starter Pack” at R12 940 (encompassing consultation, company registration, shareholders agreement, tax number registration and clearance and terms of engagement) and the more complex “Social Enterprise and Non-Profit Package” at R21 340. This was “very revolutionary” at the time, says Stern, but it worked. “Our clients got it.”
According to Stern, entrepreneurs and creatives sometimes allow their enthusiasm to override caution, particularly when they do business with family and friends without bothering to formalise their relationship. “They may enter into that relationship with plenty of good intentions and mutual trust, but it needs to be specific … because ‘stuff’ happens! You cannot afford a laissez faire attitude to your business and expect it to work. You need to spell out the terms and conditions in clear language.”
Stern acknowledges formidable challenges in the intellectual property protection battleground, where creatives face anything from subtle copyright infringement to outright theft – and not always from predictable sources.
Is there still a degree of naivete in the music industry and other creative spaces when it comes to copyright protection? “Without a doubt,” he says. “Think about it … copyright laws were invented long before the arrival of the internet, and the internet doesn’t care about the law.
“We ask our clients to address the question of where the real value lies in their idea – is it the song, the concept, the trademark, the domain name, or all of these? Will fighting for your rights be an uphill battle that you cannot hope to win unless you have huge cash reserves? There is no cookie-cutter approach to intellectual property.”
Legalese is about to launch a mediation department that will attempt to resolve disputes without going to court and before they become too messy and expensive, says Stern, explaining: “Lots of disputes can be resolved by a good conversation.”
What drives him and his team? Stern considers this for a moment, then cites the excitement of working with start-ups, entrepreneurs, creatives and assorted disruptors from many disciplines before settling on the perfect answer: “We want to sleep at night.”