Why Understanding Legalese Matters for Freelancers

When I first started The Everyday Lawyer, I listened to a venture capital podcast where they were talking about the future of work. The podcast guest, a well known venture capitalist in Los Angeles, said that she was really excited about investing in tech for the freelancer economy.

She said there’s this group of people out there that’s continuing to grow who no longer depend on one company as their sole source of income. Instead, they treat work like they treat investing: they have a diversified work portfolio where they work for multiple companies on a contract-basis instead of as a full-time employee.

She said these folks needed tech tools to operate their businesses efficiently and effectively and she was excited to invest in those tools.

When I listened to that podcast, a few things happened:

  • I realized I was already well enmeshed in this community that she was calling the Freelancer Economy and might know them better than she did;

  • I realized that the needs of freelancers have been overlooked for a really long time and that as long as we continue to think about the solutions as solely tech-based that this would continue; and

  • I re-realized that freelancers really needed to be equipped with the right legal knowledge to operate their businesses sustainably like yesterday.

I suppose this podcast episode acted as a catalyst in that it confirmed that I was on the right track. Someone else was talking about this group of people who continue to be wildly overlooked and they still weren’t seeing the things I was seeing.

In this business world, I supposed this would be what people would call a market opportunity. I don’t know. I’m not really a business person. I’m a sociologist by training and so I’m good at pattern recognition.

And the pattern I recognized was that lots and lots and lots of freelancers simply do not understand legalese. Like at all.

And not understanding legalese continues to cause freelancers to agree to contracts and deals where they uphold their end of the bargain only to not get paid, be underpaid for their work, or take on way too much legal risk as part of the deal that sometimes comes back to bite them.

When I listened to that podcast, my mindset shifting from guessing that legal knowledge is one of the key tools that freelancers need in order for the freelancer economy to boom to being sure that it is.

So in this article, I’m just going to talk about why understanding legalese should matter to you if you’re a freelancer because it matters a whole lot to me as someone who is on a mission to create universal legalese literacy.

Why Understanding Legalese Matters Now More Than Ever

To put it simply, the freelance economy is growing rapidly. That’s partially because more and more people are choosing to be freelancers and consultants, but it’s also because giant corporations keep firing all of their experts, or the people who keep things running inside those businesses.

Why? Because experts are expensive. And firing experts saves costs and increases profits in the short term even if it wreaks havoc on the business’s ability to innovate and grow in the long term.

And instead of accepting jobs with lower pay, more of those laid off experts are becoming freelancers and consultants who sell their skills back to the very companies that fired them for a higher rate.

Honestly, I love to see it.

But what I don’t love to see is all of the freelancers and consultants who are winging it when it comes to the law because they don’t have access to the right legal information.

Yes, in the scheme of things, making money is the most important thing in your business. You need to be able to pay your bills. You need to be able to afford support for your business. So I get that making money is the priority.

But as more and more people join this freelancer economy, or what some venture capitalists are calling the future of work, then we have to be honest about what’s required to build sustainable businesses.

We have to be honest about the knowledge and systems needed to operate a business that thrives and lasts.

And one of the things you need to do that is to understand legalese. I’m not saying you need to be an expert, but you do need to be proficient in some legalese basics like:

  • Understanding and negotiating contracts;

  • Assessing the legal risks in your business;

  • Protecting your business from legal risk.

When I talk to freelancers, most folks don’t really know what legal risk is. Many others read through contracts, check the payment terms, and sign off on the rest without considering how other terms like intellectual property, indemnity, or non-competes, might impact the growth of their business. And too many others who do negotiate contracts are doing so haphazardly without any sort of strategy that helps them consistently protect their business from unnecessary risks.

Understanding legalese, especially the legalese of contracts and business deals, matters because it helps you preserve growth opportunities for your business and it ensures that your business continues to receive income from clients you’re working for in a timely manner.

Understanding legalese matters because it helps you create systems in your business that take the guess work out of contracts and instead layout a step-by-step process for reviewing and negotiating contracts that saves time and anxiety.

Understanding legalese matters because it allows you to assert more control over how you work, when you work, and under what conditions you’re willing to work as a freelancer or consultant.

How The Everyday Lawyer Helps

Being a freelancer means you need to develop a new set of skills. It’s not just about performing a job function. It’s about performing a job function, and marketing your work, and managing your finances, and managing the legal aspects of owning and operating a business.

The Everyday Lawyer is specifically focused on contract literacy and management for freelancers and consultants. I teach you about what legal risk is, how to manage it in your contracts, the key to understanding and negotiating contracts as a beginner, and how to create a contract management system in your business.

So if you’re a freelancer, and you’re ready to level up your legal skillset, I invite you to join the legion of freelancers who are learning the ins and outs of legalese with help from The Everyday Lawyer.

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