This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk, where every week we interview one of the movers and shakers of the adult industry, and we discuss what's going on in our business. Plus we give you a tip on buying and selling websites this week. This week we'll be talking with adult industry attorney Nick Zargarpour.
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1 (1m 23s):
Now let's feature our property of the week that's for sale at adult side broker, we are offering a rapidly growing hair, shaving site. This site shows women getting their heads shaved. It does not show explicit content. So it is much easier to promote than other adult sites. The site creates an environment for their customers, where they feel like they are getting invited to the party of their hair, fetish dreams. They love using slogans like come join the party. There's a sister site that is a unique method of hosting their videos in a discreet manner for their customers. The site is fueled by redirects. This is essentially the brains of the whole operation.
1 (2m 4s):
It handles the billing and rebilling user information and video displays. There is also a separate forum and a download store that did $5,000 in sales. The first month alone, there is no paid advertising that go directly to their customers with targeted SEO, YouTube videos and social media. The community for this niche is very loyal and the members will help any way they can to see sites like this grow. They'll donate. Some will even do work for the site for free. The site has a lot of room to grow with a little more time and investment. There's a mailing list of well over 1100 model's hair can be sold for thousands of extra dollars.
1 (2m 47s):
There are trained producers for these shoots who would be happy to stay on after the sale. This great site is available for only $480,000. Now time for this week's interview. My guess today on adult site, broker talk is Nick czar, Gar poor Nick. Thanks for being with us today on adult side, broker talk, Hey, glad to be with you guys. It is a pleasure. Now Nick is a California attorney that has over 20 years of legal experience. He started when he was 12 in business and business litigation and over 35 years of experience starting and running successful small businesses. I think he ran his first business when he was three, actually, anyway, he handles clients and various legal aspects of the adult industry and brings a wealth of knowledge about both the operation and legal aspects of the business.
1 (3m 37s):
In addition to being a trial lawyer, Nick is also a professor teaching business plan, writing UCLA extension, Nick. How, and when did you get involved in doing legal work for the adult industry?
2 (3m 51s):
But seven years ago, I got approached by one of my clients that runs a strip club and he wanted to invest in adult industry and he wanted me to review and can negotiate some contracts for him. And I negotiated and we wrote up the contracts and he invested with a company and it was, I guess, more profitable at the beginning than it is later, but overall he was happy with it and it was just something for him to basically dabble it. Once I started doing business with them, with, with him and the other side, the other side decided they liked the way I did things and they started hiring me.
2 (4m 33s):
And then I got into the adult in the streets slowly but surely I would say probably about, oh, I say four or five years ago, I went to the Phoenix forum. Oh man. It is a good show. It is a good show. It
1 (4m 50s):
Was a good show. Yeah. Yeah. And that was very relaxing. And that was your first show.
2 (4m 56s):
That was the first show. Yeah, I did the Phoenix forum and then experts. I went to one AVN and I'll be honest with you because for me it's a business, a business thing. Yes. ABN was, it was a wonderful sitting at the Dunkin donuts and working. That's pretty much what I did Saturday, the build up, but most of the time and worked, I
1 (5m 18s):
Think everybody can picture that, that spot and people with their laptops. There's no two ways about it. Hey, I gotta ask you. So, so being a mainstream business guy and an attorney, what was your impression the first time you went to an adult expo?
2 (5m 36s):
First time I went to an adult expo. In what respect, like a first time I went, I went when I was like 21. I went to AVN.
1 (5m 46s):
No, no, no, no. I'm talking, I'm talking about as a business person.
2 (5m 49s):
Yeah. My first impression of the people at the Phoenix forum and other adults industry shows the business, the business ones is that they are wonderful people. The people are accepting of all kinds of, you know, different people, something that you don't see that like, for example, I go to legal conferences too. And if someone shows up with orange hair, you know, something, they would be treated as a pariah at a legal conference. Maybe not overtly, but maybe, you know, just subconsciously they would do that. But when you go to the adult expo, everyone was adults, you know, business, a business, you know, no matter who you were, no matter what you did, no matter how many tattoos you have, what color hair you had or no hair at all, people treated you as one of their own in a very accepting.
2 (6m 36s):
And I really enjoyed that.
1 (6m 38s):
So when did you stop dyeing your hair? Orange? Well
2 (6m 45s):
Told me, I guess, would be the first jury trial I would ever have to go forces you to not, well, I know I didn't have, I've never had one.
1 (6m 57s):
I know. I know that was a little, that was a little joke. Very little. I can, I can only muster so much early in the morning. So how do you like working with people in adult? You kind of answered this a little bit at the trade shows, but how do you like working with people and adult versus people in the rest of the business community?
2 (7m 18s):
Well, we get the same issues with the adults, people working in adult, as opposed to the ones that don't work in adult. I get a lot of people that just think the handshake is good enough or what they were promised. Right, right, right. Or word of God and everything is good and Dory, and we can just go forward and without having to take any kind of, you know, you know, assurances that what we were promised or what you were promised is going to be actually delivered to you. Correct. Yeah. You know, and you get the same thing adult, maybe a little more.
1 (7m 57s):
Well, I think it's, I think it's a lot more, but I don't know.
2 (8m 1s):
No, it's a little more because, because I do get so many of my other clients that still, you know, just a non adult industry, that's still believing that some of them are old school. Like I've got a gentleman in his eighties that still does deal by shaking hands. He does everything he's supposed to, not everyone does that. And I kept telling him the, the deal that nowadays, when you shake hands with someone, you count your fingers to make sure they're all there. And so is your ring. You make sure they didn't.
1 (8m 31s):
Well, you should tell him that. As long as he's shaking hands with somebody in his own age range, he's probably in fairly good shape. That's a little joke. But any anyone else forget about it? What type of legal work do you do in the industry?
2 (8m 47s):
Oh, we do all kinds. I mean, tell them, we do the negotiations on the large contracts. You know, when companies want to do deals with each other, you know, exchange of, of products we do in forcement, when there's copyright violations, when someone took, you know, we have a case right now that a mainstream individual used copyrighted information videos from one of our clients. And they're trying to say that, no, it's fair use. And we're saying, no, it's not fair use anyways. That's one of the things that we do now. It ranges. Now it goes from the biggest deals with the business to business aspect too.
2 (9m 30s):
I've had, you know, then we go to the other spectrum, the other end of the spectrum, where I represented two adult industry individuals living together whose neighbor was complaining about them having sex and too loud. And, and the landlord wanted to the victim. And I basically you've stepped in and said, no, no, no, no, no, you, you, you just basically this neighbor's got it out for them because this neighbor is found out that aren't my clients, aren't adults. And therefore we are not going to put up that, you know, and you can't do that in your you're the victim. You try to evict them. I will go in there and I will basically put a full court press on you.
2 (10m 14s):
And of course we never heard anything after that. Wow. But again, it ranges, like what we do is we negotiate the contracts. We enforce the contracts. If we have to go to trial, we go to Trop. I've even had appeals. The issue is I had, when I was growing up, I worked for a family business. And in the family business, I found out when I had it as early as like 21, 22, I had a, I had a lawyer for the family business. It was a transactional attorney. I found out that a transactional attorney will do anything to settle the case, even at the disadvantage of you, the client, because he wants to avoid litigation.
2 (10m 59s):
Whereas I said to myself, well, I don't want to be that kind of an attorney. So I negotiate. And because I've got the business background, because I used to be a consumer of legal services before I became the provider of legal services. I used to know what I hated about my lawyers and what my lawyers did in the family business. And I go out of my way not to do that. For example, they used to leave me voicemails, Hey Nick, this is Bob, blah, blah, blah. About, you know, this matter, blah, blah, blah. You know, please call me back. And there was a 0.1 on my bill.
1 (11m 36s):
Can you hear me, Bruce? Yeah. Yeah. That's crazy. That's crazy. That's crazy.
2 (11m 40s):
No, that we'll do that 0.1 on my bill and I would have to argue. So I, I do not do anything like that. Most of the time my clients call me up and ask a quick question. I don't even put it in the, in the computer. And if I have to put up think it, if I have to read documents and stuff like that, absolutely know it has to be built for, because I'm not Amazon. I don't have boxes shipping out the door while I'm sitting there talking with you.
1 (12m 4s):
You don't work. You don't work for free nor should you.
2 (12m 7s):
Oh no, no one. Yeah. That's why. Yeah. My time is basically my inventory and, and because of that, so I have to charge for it. But if it's like someone that calls me up and asked a quick question, it's a good client. You know, if someone has worked with me before someone has, you know, referred to me, when people tell me all of these things, I basically, you know, go out of my way to help them as much as possible. And, and if I know the answers, I give the answer. If I don't know the answers, I try to get their answers or refer them to an attorney that does, I don't refer, usually refer people to attorneys that I don't know. Well, yeah, because I gotta be able to have the, that person's cell phone and pick up the phone and say, Hey look, Larry, the person I referred to you is done happy with your services.
2 (12m 58s):
You're not calling him back fast enough, calling her back fast enough. You better call the back line. And you'd be surprised. You know, that really is the biggest problem with attorneys is that they don't return phone calls or emails.
1 (13m 15s):
I got it. I got a great story about billing. I, when I was doing my mom's, I can't even think of that or trust. We did the, sometimes the words don't come early in the morning when I was doing her trust, I used an attorney and I was in an office building and we were on the fifth floor and two floors down, literally between a walk and an elevator ride about a minute, okay. Was this attorney? And so they delivered the documents to me.
1 (13m 55s):
And I got a bill for an hour who are delivering documents for delivery documents up to levels, taking an elevator. I hope you disputed that. I think, of course I did. I said, I'm not paying, I'm not paying that. Oh yeah. That's the thing. That's, that's kind of the old school attorney way. And I say old school because some are still doing it. Okay. But that, to me, that's just crime. It is. Yeah. I had
2 (14m 29s):
A, I have a client right now and a very interesting case, which is like for law, you know, it's got sex appeal, it's got money, it's got everything. And in that situation, there was an attorney that this person had hired in a family law matter. And the lawyer is a famous LA divorce attorney and she's this and she's that. And she's know this famous person's attorney and that famous person's attorney and all this other, you know, the bonafide, she would charge my client eight hours of attorney work for making a one hour appearance. And that is highly unethical.
2 (15m 11s):
And I told my, I told my client, you got to put your foot down as far as this family attorney. And by the way, one of the other things is I get people that say, oh, I went with, you know, Tom, blah, blah, blah, or Larry, blah, blah, blah. And he is, you know, this famous person's attorney at that point and this person's attorney and I'm thinking to myself, yeah. But the problem there you have is you are not famous,
1 (15m 40s):
Very famous. They want to be famous. So they figure if they, if they take on this person's attorney, that that makes them famous.
2 (15m 48s):
Well, yeah. Some, some people maybe in the talent plan, you may think that's funny, but, but no, I, I didn't think about that aspect of it, but, but the problem is you're not famous. You just become a cash cow to them. Of course, you know, you just become something for them that you're secondary because your name is not on TMZ every week. Okay. Their name is, and therefore this cash, you're just a cash cow for them. And they don't give you the service. And you usually get relegated to some associate that you've never even heard of after first or second meeting or a legal assistant or a legal assistant that doesn't even know what they're talking about. And this is like one of the biggest issues I have with all of these big advertising law firms, you know, like all the big ones that are billboards and stuff like that.
2 (16m 34s):
Every time I've had someone come to me from one of their accounts and I don't handle personal injury or any of that stuff. But you know, you always hear about the stories and the stories are, oh yeah. I talked with your attorney once. And then the rest of the time, it was just some paralegal that I was talking to. Which again, no, I just don't run my practice that way. I, I still answer the phone myself, even though I, we have a staff of three, still do everything myself. There's just no reason to do this. If I'm as an attorney, I can't get off a phone call. I don't want to be on, I don't deserve to be an attorney.
1 (17m 9s):
I, I agree wholeheartedly. I, for, for attorneys like the ones you described, like, I'll use the same saying that here in Thailand, they use for some of the, some of the work and girls that, that send their, their customers emails all the time saying that they need money. Yeah. We call the customers ATM machines. So, and they're, they're pretty much on the same level too. So what are some of the basic legal things business people need to do? Or
2 (17m 43s):
One of the things I'm finding out, and I give this as part of my class and it's, I've given some lectures about this. It's like basically the 10 things you need to know about contracts. I'm not going to go through all 10 of them right now. But one of the things that you really need, need to do is make sure you're getting something. Yeah. I'm surprised how many contracts I read, where you're supposed to do a, B, C, and the other side has some kind of an amorphous, you know, thing that they're supposed to do. Something that's not, you know, you know, written out something that's not clear.
2 (18m 26s):
And sometimes when it's clear, there is no date to it. You know, they can, they can literally sit on there and sit on it and not do something. You know, if they're supposed to do it, you've done your part. Right. They're supposed to do it. They say, well, I'll get to it two months from now, nothing in the contract says that I have to do
1 (18m 47s):
Now. Yup. Yup. So
2 (18m 49s):
That's one of the issues, right? The issues that I find a lot in contracts, second of all, though, there's not even a contract, you know? And there's just basically, like I said, you'd say something, the other person says something. If it's something that is important to you, and of course it's important to you because guess what? You are negotiating this with someone you are asking them to do it. Yup. Get it in writing. Yep. If it's an exchange of emails and then the person asked him, if you, your understanding is the same, please, please say yes. Or tell me where I'm
1 (19m 29s):
Wrong. Yeah. In a reply email that could be used in court
2 (19m 35s):
Guess necessarily in court. It's just clarifies everything for everyone. Like my business people. My, my more, let's say, we're talking to see the problem is we're talking. I don't know who we're talking about right now. Are we talking about a brand new, just someone working out it, our home, you know, doing some work or something. One that is a more established business or someone that's a super big business and they get something. If someone is supposed to do something for you, you get it in writing. They're supposed to do it by this day. They're what they're supposed to do. Exactly. What's the quality of what they're supposed to do. And when are they supposed to do it by?
2 (20m 16s):
And if you're a bigger company, this is good for you for you because now you can let your staff know, Hey, listen, you know, Larry is supposed to do this despite this date. And this is what we wrote, and this is what we're supposed to do by this date. So it makes it easier for you as a manager, just do this and I'll do that. And, and, and this way your staff knows it, you know it, and everyone else can basically work and row at the same pace towards the same goal. Sure. Okay. Sure. That's very important to get in writing and, and people, you know, I just so many times there's not a wing and a prayer, and sometimes they're afraid to get this that, you know, it's not just intentional.
2 (21m 1s):
They just don't want to rock the boat.
1 (21m 3s):
Yeah, I get it. I get it. No, I, I I've been there. I completely understand. He
2 (21m 9s):
Promised me this and I don't want to, you don't want to be spending a month of your time working or more, less than, and not getting something done. Okay. And one at a time you were done by the time you're done the other person isn't performing or hasn't done anything. Right. So you expect them to do it otherwise. Why waste your time? Your time is your money. You
1 (21m 37s):
Know, I, I can't tell you how many agreements that I see. And I look at, and I I'm one of the few people you'll find that actually reads something before they sign it. Okay. If it's really complex, I'll get it reviewed, you know, by, by an attorney. But most things I can handle, I have a pretty decent legal mind. I mean, I'm not an attorney, but I did stay at a holiday Inn express last night, but yeah, exactly. But I find that there are so many that are one sided or have language in it that I find unacceptable. And I go, no, I'm not going to do that.
1 (22m 19s):
And so, you know, I go, this has got to come out. This has got to come out. This has got to come out. This has got to come out. So let me ask you a question. When you're writing an agreement, what, what philosophy do you put into writing one for your clients? So it will be acceptable and fair to the other side. You
2 (22m 39s):
Want to be successful. You have gotta make sure it's, win-win my job. And that's part of what I bring to the table. That other attorneys, I feel that don't bring to the table because I can't come from a family business background. I come from the business background, like I said, I was a consumer of legal services. Before I became a provider of legal services. I had lawyers that would come in there and destroy deals that go out of their way to ruin something. But my goal is to, you know, the first thing, one of the things I do in my program that I have for my accounting program is it says goals.
2 (23m 23s):
And I write my client's goals in there. And that's something that I refer to all the time. And when we're dealing with contracts, when we're dealing with litigation, when all of this stuff is being handled, we go from these goals. We follow these goals. We say, this is what they wanted. The ultimate goal is this. So how can I make sure that this is, this is achieved. This goal is achieved without ruining it. Now, let me tell you something. Ruth I've had situations where I told my client, this has happened about once every couple of years, it happens. I'd say to my client, the day you're going to go sign this contract, not the one I negotiated, but the one that was put in front of them, I will come to your office and I'll break every knuckle in your hand, just so you wouldn't sign this thing.
2 (24m 11s):
And I've said that to clients, that I'm going to come over and break your knuckle, just so you can't sign it because it is that bad because I see stuff in there.
1 (24m 21s):
Wait a minute of my time I talk, am, am I talking to Nick or Michael cone? This is my own client. I know. I know. I know.
2 (24m 32s):
Yeah. So, but this is my own client. I tell my client and I say, look, this is why this means this. That means this. You know, these are all things. Here's a perfect example. Now this one is, and let me tell you something. First of all, one thing that people have to understand is this is very important. No one ever came into my office and said, Mick, I knew he was a scum sucking dirt bag. That's why I went into business with him. Okay. It's always, oh, he was my best friend. Oh, we were neighbors for 20 years.
2 (25m 12s):
Oh, we've known each other in the industry forever. All of these things, no one ever came up to me and said, I knew because the devil doesn't wear, you know, horns and red, and it's got a little, you know, an arrow for a tail walking around, you know, talking, wearing a suit, talking to you. Okay. The devil comes off as being the angel as being friendly. So you gotta be careful about that. And another red flag is when they hold something way too big over your, over your head, you know, like perfect example, non adult industry. I have a client who started a business by herself about let's see what, the time we were negotiating.
2 (25m 57s):
This thing was about four years ago, we got four years. She gets approached by a company that is a startup that has $80 million in backing. And they want to buy her business for $4 million. So by all standards, a very successful business, you know, that she's running. And the way they were paying was they were paying a lot above the, the earnings and they were paying way above and they were piping everything. So the doll of the pot of gold, the $4 million. Okay. And there were paying what all parameters, like if you did a business analysis, you would say businesses worth maybe a couple of million, but 4 million is definitely double that we get this contract from New York attorney.
2 (26m 44s):
Yeah. New York attorneys. Just love to write complicated agreements. This love writing,
1 (26m 52s):
Not just New York ones, but go ahead.
2 (26m 54s):
bad. Yeah. I had a lease agreement for a small restaurant that was 99 pages. How can you write a 99 page lease for a restaurant? It's just insane. But this attorney had written for a $4 million con contract, you know, Paul, you buy, let's say 60 pages over two separate contracts.
1 (27m 17s):
2 (27m 18s):
Yeah. Well it's 60 pages is okay. Actually my record is 152 page letter. Yeah. But,
1 (27m 23s):
But I mean, for a, for a buy sell, what the hell could be, ah, funny, you should ask
2 (27m 30s):
You read in there about 20 pages in there is a section and, and, you know, had I not read everything, had she not decided or having me review everything with these guys, 20 pages in, and the deal was supposed to be like over X number of years and blah, blah, blah. And it was supposed to be like $300,000 at the beginning, then $120,000 every 90 days until basically we reached a $4 million range, something like that.
1 (28m 4s):
That's kind of a strange path.
2 (28m 7s):
It's, it's, it's the path because they want it to kind of the, it was kind of golden handcuffs because they wanted her to continue to work, you know, so they wanted her to be involved and they wanted all of these things. She go about 20 pages into this contract, 20 to 25 pages into the first contract. And then I see a very interesting clause in it. It said, okay, in a very convoluted language that if we decide on firing you at any point during this next, let's say four years, okay. That we were going to pay you. Wow. I can't wait. We will only give you 120 day notice and thereafter basically don't owe you a pen.
2 (28m 49s):
1 (28m 49s):
Shit. I had a feeling. It was going in that direction. Oh my God.
2 (28m 54s):
Very convoluted manner. My God, my God basically meant that they literally could find this contract. Okay. Take over the company the next day, fire her. And instead of $4 million to her 300, it was $300,000 plus 120, $120,000. Something like that. I don't remember all the numbers. So the $4 million contractors became 10% of them.
1 (29m 22s):
She didn't, she didn't when they, this attorney drafted this, they didn't think anybody was gonna review it. Did they? Nope. Because fuck
2 (29m 33s):
In the industry that she is in. Yeah. Okay. There are notorious for not reading. Okay. Interesting. But they didn't think that the attorney was going to review it or that the attorney was going to catch it. So I immediately picked up the phone call. I said, Hey, listen, I wanted to talk to you about this section. Okay. This clause you put in there. Okay. And by the way, it took me like two, three readings first to understand what's going on. And secondly, to believe what's going on, it's like, how audacious are you? Like, what the heck is this paragraph?
1 (30m 10s):
That's that's again, it's, it's, it's borderline.
2 (30m 15s):
It is. So I basically turned around, but I called them on it and the Lord with what I have to do, what's best for my client by ripping off the basically reaching the entire contract. So he was coming in hauling and basically trying to do the best tap, dancing job he could do. And things like that. Well, you know, they don't want to, you know,
1 (30m 34s):
He should go, he should go on. He should go into politics. Probably. I think, I think it's those types of attorneys were singing Congress, by the way.
2 (30m 44s):
Yeah. Well, I don't know we started on now, but that's the kind of thing that you see. And if you're not careful because the pot at the end was so big, you know? Yeah.
1 (30m 58s):
But, but it wasn't, it wasn't as it seemed,
2 (31m 2s):
No, it wasn't as a team, we negotiated that right away. And then we went in there and I basically, at that point I was on like, I was on high alert. So I was going through that thing. I always go through a fine tooth comb. I went through, I think three times. And it was a fine tooth comb because I didn't want to be, anyone would be scamming me or my clients or anything. And I didn't trust them. And guess what? That deal eventually broke up. Not because of the course, but because they finally found out that the sorry, or I don't know if they found out, but they knew that had they paid the $4 million, the dollars just weren't there.
2 (31m 44s):
1 (31m 44s):
Right. If they had made a reasonable offer and you know, they could have been negotiated, but they wanted to steal it instead that's
2 (31m 53s):
Broke. They, they, they broke the deal up because they couldn't scam her. Right. And now the dollars wasn't there, not now, they had the, the, the $4 million, you know, where they could have basically broken up after 2 million, after 1 million, whatever what's financially feasible for them. All of a sudden they find out, oh my God, we can't do this. So that was one
1 (32m 17s):
Of the cases. It's funny, funny.
2 (32m 19s):
But again, this is what everyone needs to apply. You know, it's written in the terms and conditions in the blah-blah-blah section, I call it because we all read that first section that says a and party B. And then we read the, you know, the recital, which has a, it's supposed to do this B, it's supposed to do this. And then you to the terms and conditions where everyone's eyes glaze over. Right. I read them, I read them. So I
1 (32m 49s):
Get it. Not most, not many people do.
2 (32m 53s):
Sorry. One more thing in your audience, please. I don't care how old you are. Start reading them. Even if you don't get them the first time you read it, read it a second time and a third time, and maybe even draw a little chart for yourself that Bob is supposed to do this. Larry is supposed to do this six. I get back and forth. Whatever. Let me explain why that's important by the time you're on your third, fourth, fifth agreement, you get an eye for it as jibberish as it sounds sure it's English. It becomes English where you might adjust.
2 (33m 35s):
It's like me and take doc. The first time I was ticked off for the first day or two, it was like, my God, why is everything so fast? Why is everything 15? Like, oh my God, I can't even focus on these videos are so fast. Now, any video that goes more than 30 seconds. Oh my God, this is so boring. Why is this taking so long? Okay. Your brain adjusts, your eyes adjust. And by the way, if you see a big legal word, like not even a big, like, whereas just put your thumb over it and the rest of the sentence without the whereas make sense.
1 (34m 4s):
Yeah, I got it. I got it. Yeah. You gotta read it, but better than reading it, six times hire an attorney. I say it all the time. People ask me, well, people are asking for legal advice, like on X biz or GF, why they're saying, well, I've got this contract and what do I do about this? I go hire an attorney. Well, but hire an attorney. I mean, that's my answer to everything. And that's what I do. You know, I, when I, when I want to get my car fixed, I don't try to fix it. Hire a mechanic. When I, when I have legal issues, I'll hire an attorney. When I, you, when I, when something hurts, I go to the doctor. So anyway,
2 (34m 45s):
No, we're more expensive than hiring an attorney,
1 (34m 48s):
Not hiring an attorney late. Yeah, no shit. So that kind of leads into this, you know, many people in our industry, like we talked about, don't treat it like a business. How dangerous is that?
2 (35m 1s):
It's extremely dangerous. Okay. Because of not only it can be your bench, your, you know, business deal, like where you sign a contract, where your outlay could be way more than the money that you're getting. It could be a $10,000 contract to you, but it could be a hundred thousand dollars in damages that they're going to claim when you don't perform. Or if there's something goes wrong. Right. So a hundred thousand dollars damage could be, you know, bankruptcy. Right, right. So it, it could be a bet, your business kind of a thing.
2 (35m 43s):
And when we're most people like us, when we were, self-employed like, I am, you know, our business is our life. You know, we do spend the night, you know, waking up and you're wearing, what was the, I tell another thing to my at UCLA class is, you know, the old joke is, you know, ever since I went into business for myself, I sleep like a baby. I wake up every two hours and cry.
1 (36m 5s):
That's an old one. It's an old one. But it's true also. Yeah. I see a lot of lawsuits in our industry, especially from certain attorneys, when should someone Sue and when shouldn't they shoot,
2 (36m 21s):
Oh boy, it's such an open-ended question. Okay. A few things I would look for in deciding whether I want to Sue on the contract. Okay. On a business matter. The, why am I saying business matter if this was family law and they're going through a divorce, they hate each other so much. They'll spend $50,000 to collect that. That makes no sense. Right? They'll do anything just to put a finger in the other person's eye for business, you have to have a bit of a, you have to do the capitalists.
2 (37m 1s):
You have to do the calculations to make sure that it makes sense for you. Yeah.
1 (37m 5s):
But a lot of, a lot of business breakups for like divorces and people get really, really, really upset
2 (37m 12s):
Partnerships are a partnership breaks up a breakup and shareholder breakups, you know, everyone says partnership, but in reality, most of the time it's SharePoint, the breakup is one of the second biggest things. As far as your emotions. Well, actually third, most important thing. I would put family number one, landlord tenant, number two, surprisingly, because when people like attack the way you will fight tooth and nail, and the third one would be partnership breakout. Yes. The issue is when should the question, sorry, going back to your question was when should you decide to Sue? It depends if it's substantial sum of money, if it's reputational that someone is destroying your reputation and it's going to cost you more than the $10,000, that is at issue more than the $5,000 at an issue, definitely consider that.
2 (38m 8s):
Other thing you have to look at is one of the most important things that people need to understand is litigation is like a beauty contest. Okay. And because I'm so handsome, I win all, not kidding. So, but it is a beauty contest. So if you have your hand is dirty, take that into consideration as part of your, whether you Sue or not. I tell my clients, if that other side has done X, Y, and Z, and they're all an ethical and bad and everything, that's still doesn't justify you doing a, B and C, because that comes out in litigation.
2 (38m 53s):
And I forced, the judge sits there and lift it's a bench trial, which means only the judge decides, you know, the judge sits there and goes, okay, well, that guy did X, Y, and Z that's bad, but you did a, B and C. And then I have to basically weigh which one was a worst conduct. If one side has just on the XYZ, the bad stuff, and you were clean, the judges will bend over back. Moshe did not all, you know, most judges will bend over backwards to try to have you win jewelries, do the same thing too, because they don't want to be voting for someone that did something bad.
2 (39m 34s):
They don't want to be saying, I'm putting my, you know, I'm voting for this guy because this guy is because then it becomes a curse upon both of your houses. So that's another thing that you got to take into consideration in that is who did what, who, who was doing, how, you know, the actual third thing I would recommend. I think by the way, this list can go on forever. But third important factor that at once I would consider is collectability. Yes. Okay. The person has to be collectible that I can win judgements against so many people.
2 (40m 14s):
Okay. But are we able to collect it? Some kinds we do it because we have to do it. We have to prove to the world outside that we went and we enforced our rights because it's reputational for us either. You know, it would look bad for us if we don't do it, or people think that they're going to get away with it by not paying us. Okay. We're not taking care of we're doing what they're supposed to do with the company. So there's the reputational. Then you have to kind of spend the money and go after this person because you want to make sure that there is an issue, right? Other times it's not reputational. Other times, it's, it's just a matter of, you know, $50,000, but it's not collectible or it's going to cost me a lot to collect it.
2 (41m 1s):
Sure. And by the way, let your lawyer decide, okay. Or help you decide. Correct. I collected a $14,000 judgment in back in 2007. I got one, sorry, not collected. I've got a judgment for $14,000 in 2007, right. I immediately put, leans on, you know, what we call it abstract of judgment. This is by the way, California law, abstract of judgment everywhere. And I didn't see anything about that for years. Last year we collected $42,000.
1 (41m 38s):
Well, my clients,
2 (41m 39s):
$14,000 judgment gets in California. It gets 10% simple interest.
1 (41m 44s):
2 (41m 46s):
So after all these years we negotiated our, I think we ended up giving her a couple of thousand off just to be, you know, somebody good. I think 40, 42, we got something like that. But we of course it at the time the person thought, eh, you know, you got a judge and again, he's still white. I'm not going to pay the 14. Right. Okay. I had no idea that I had laid all these traps around and these traps basically had liens on their property.
1 (42m 11s):
Right. Go to when they go to, when they go to sell their property, they've nor their business state, they've got to pay them.
2 (42m 18s):
They've got to pay the lien before they do it. And another thing that, you know, that is dangerous, I've had this happen. I had a one person who was hiding all of their assets before they entered into business with my client. We went, we won, we got the judgment and the guy goes, I'm going to collectible. I don't have any assets. And eventually that became true because the family member that they trusted with their assets took the assets.
1 (42m 54s):
Karma's a bitch, much of litigation. These days comes from social work.
2 (43m 1s):
I've had a few cases on the social media. Like I get a lot of, one of the biggest things I get right now is, is when we have a shareholders basically breaking apart. And I tell everyone I'm worried about the divorce, not the wedding. You know what I mean with them? I worry about not everyone is all lovey w right down in my conference room. And I love you when you wake up, you know, I love you, you know, things like that. I'm thinking about when I hit, you know, I hit you, you know, things like that. And let's put it in writing now, wireless cheaper, you know, and write it up. It's some of these sentences that I write some of these paragraphs that I write in these operating agreements, or, you know, a buy-sell agreements between, between two shareholders, things like that.
2 (43m 48s):
It takes me maybe a minute to write, but that one minute saved 50 hours of legal time. Okay. If I write some simple thing, like venue, venue, like takes me what, 10 seconds, the right venue. But that can save my client thousands and thousands of dollars. Right.
1 (44m 12s):
I get that. But I mean, but I mean, w where do you, in the agreement and the initial agreement protecting against one partner, slandering the other partner in the case of a breakup or
2 (44m 24s):
social media aspect of it. Whenever they break up, whenever they break up, I invariably get a call from my client saying, oh, he's slamming me on the social media. And then I go and look, and it's not slamming you. It's just basically saying, well, I'm no longer involved with so-and-so company. And I just didn't feel like continuing working with them.
1 (44m 53s):
But, but what if, what if they really do slander them on social?
2 (44m 57s):
Well, a liable, because once it's written, it's liable, slander is when you say verbal, verbal. Yeah. Verbal. Yeah. Always remember S for speech. Yeah. So if it's liable, if it's a libelous conduct, yes. We can go after that and make sure you get the screenshots, make sure you do the HTML B. I want to make sure as much information as you have
1 (45m 23s):
2 (45m 24s):
It gets taken down. So the problem there sometimes is showing damages. Yes. But on certain things that the law believes damages are a given.
1 (45m 43s):
Well, what if somebody, what if somebody writes a Bruce Friedman stole for me and you know, something along those lines and I, didn't nothing of the sort, would that be liable?
2 (45m 57s):
That that would be liable if you did no such thing, because the only real defense to libel is the truth, you know, and they have to come in there and they have to prove that you did that, that you stole something. Got it. Now, if they printed that out on, on social media, what, what you will do at that time is you will do the following. You will file your lawsuit and have to ask them to take it. We'll ask them to take it down if they don't take it down. But the damages, the argument I would make in a case like that was it's a business reputational damage. Yes, yes.
2 (46m 37s):
Okay. And that the court will see as more of a less proof there's less proof needed. Yeah. Okay. Sure. If, if I'm just, you know, there's a few areas like, like in the old days, I don't know if it's still, you know, but, but like if you questioned the chastity of a woman, okay. The law assume automatically that there was damages. The woman didn't have to prove that, oh, I couldn't get married to, you know, sir, Bridget, you know, I guess, whatever it is and not show or this and that, or, or the Duco lecture stir.
2 (47m 18s):
Okay. Whatever, because they slandered my reputation. The government assumed the courts assume that certain business reputation, the chassis of a woman that gives there is damage. Okay. Now there's going to be, the other side is going to say, well, what was the damage? What business deals did you lose? But it's going to be hard for you to prove, because it's going to be hard for you to prove like, yeah, 10 people would have called me, but nine of them didn't how do you know?
1 (47m 51s):
Yeah. So that's a good point. That's a really good point. It makes for a good argument makes for a good argument.
2 (47m 58s):
That's their argument. But my reputation, my argument would be business reputation, know how do I can approve nine people didn't call just because they saw it that, yeah. But we can see that, you know, it was a public post. That person has thousand followers. They sent this, they sat down and all of these things that there was, there was an issue, but at the same high you'll have to, you'll have to also be careful because, you know, in this country we have free speech. And by the way, one of the things that people have to understand, and they keep telling me, it's like, oh my God, free speech, free speech, free speech. No, no, no. The free speech clause is there for the government not to pass any laws that restricts your speech.
2 (48m 41s):
1 (48m 42s):
Right. It's right there in the first amendment. Yeah.
2 (48m 44s):
It's for the government. It puts limitations on the government. Not the people doesn't give you carte blanche, but at the same time, you can't just come in there and basically, you know, liable or standard or someone's reputation, right. By the way, another thing that you gotta know, it's gotta be published with a third party. You and me talking to each other. And I say, bro, she stole my money from me. That's not slander.
1 (49m 7s):
Okay. Okay. What are some of the basic business things people need to know?
2 (49m 13s):
Okay. So let's, let's this one I'm going to shift a little bit from someone that has got an ongoing business to someone that's a brand new business. Okay. If you're starting a brand new business, either as talent, okay. You were starting this business and nowadays, miss y'all, everyone incorporating in California and blah, blah, blah, this other stuff. And if they're doing that, they come in there and they have to think about it. That I have to build this proper foundation. The proper foundation is very important and the proper foundation comes from getting a good accounting program, get QuickBooks, get whatever you want.
2 (49m 59s):
There's all these cloud-based accounts right now. But get an accounting program spent about a day or two learning it. Okay. This way you need to know whether this is worth it you're worth your time or not your time. Okay. In addition to that, you need to basically of course do 800 different things. The class I teach at UCLA is that developing a business plan class. And it's a 11 week course. And it's like a mini business school and we cover marketing and sales. And you know, by the way, they're not the same thing. A lot of people come to computer marketing. I
1 (50m 34s):
Know that being a marketing guy, that's one of my, that that's that that's a, that's a sore spot with me. So thank you for bringing that up for sure.
2 (50m 43s):
Yeah. You know, we go through all of these aspects and one of the first things I say is make sure you get that good accounting program, learn the accounting program. It's good to know. Be able to, it's like having a baseball game where you don't know how many strikes, how many balls, you know, how you know, what's the score? What is the point? You know, just basically, you know, this, the guy who's just swinging and swinging and swinging and no one's keeping score, you got to keep score. And the accounting programs, what keeps score. Second thing is you gotta decide whether you want to form a corporation or an LLC or not. People ask me this all the time, especially new business people. Do I form it? Do I not form it? Do I form it? Do I not form? If you're like a company that's, that's just starting or some of us have you're doing production or you doing editing or something like that.
2 (51m 30s):
You have to look at a few things to decide whether you form a corporation or an LLC limited liability company. One of them is what are you doing? Okay. What is that? Is it dangerous? Could it have dangerous implications? Like if you edit something wrong, if you don't make proper background, a backup of it, you lose the raw footage. You know, who'd you be sued for hundreds of thousands of dollars
1 (51m 59s):
In liability. The liability,
2 (52m 1s):
Is it large? Then you want to have that corporation. I have people that say I'm in the cupcake business. And I say, you've got to find a corporation right now and make sure you got insured up to the ears. One bad batch, one bad thing of butter. And you've got a party full of sick people
1 (52m 23s):
Or, or something or something that, that goes into a cockroach crawls into it or, or something poisonous ends up in it.
2 (52m 32s):
Exactly. So you gotta be careful. So if you're in the food business form a corporation, get yourself insured. If you're, if you're hiring employees, you hire a company, you form a company. If you have partners, you form a company and,
1 (52m 51s):
And get a partnership agreement.
2 (52m 53s):
Oh no, not a partnership agreement. That's where you gotta be very careful. Okay.
1 (52m 59s):
Oh, that's right. You're forming like forming a company, right?
2 (53m 2s):
Forming a company is a shareholders for a company or a corporation or an LLC. It's memberships.
1 (53m 11s):
2 (53m 12s):
Now why is this the most dangerous, horrible thing in the world is, and this is what you have to avoid, like the plague. Okay. And that is the general partnership. Why? Because it's unlimited liability for the conduct of the other person. So if you and I walk into Bob's office and said, we're going to starting a editing business and we can do whatever you want or blah, blah, blah, blah, this and that.
2 (53m 52s):
The other thing. Okay. And you walk out, both of you guys walk out, just basically having formed the corporation. I'm, haven't done an LLC having that, anything you walk out and you like, you're getting your part and your partner gets in that car, his in his car, I'll get in my car. Then once you leave, I go back upstairs and I tell the guy, Hey, listen. I was thinking something. If you give us a hundred thousand dollars up front, we can start this business. And instead of giving it to you for $10,000 a job, we'll do it for you for $8,000 a job.
2 (54m 34s):
And Bob, does it guess what Bruce, everything you own is also responsible for that a hundred thousand dollars because general partnerships, which is a just, and it's easy to get into my friend. That's it. You just present yourself as that as it's business people together. That's why one of the things I look at whenever I'm with someone is their business card. Yeah. I look at the business card and I see, okay, does this say incorporation? Does it say LLC? No nothing. Then I go check the state databases, find out if they're a corporation.
2 (55m 15s):
I go, guess what? I got these two personally liable. And I got both of them liable. Even if one of them does it, by the way, it could be nothing. Even intentionally relationship. If the person is driving their car, while they're doing something for the business crashes, the car killed someone and they only have $15,000 in insurance. They're both liable. They would both be liable by the way, the insurance for what people don't know is your car insurance for your regular car. Insurance is not good enough necessarily for business insurance. So it's true. So they gotta be careful about that.
1 (55m 57s):
You gotta have business insurance. That's another thing.
2 (55m 59s):
Well, you got to have business insurance. That's another thing that protects you. And then there, you gotta hop. You know, if you're going to be a bigger company directors and officers insurance, you know, to protect you from getting sued or, you know, if something happens, you know? So, so these are some of the things that you have to do. So going back to the thing, form a corporation, if you're with anyone else, if you're with poor man, LLC, you know, and, and I'm not going to go into all the tax ramifications with the LLC versus the corporation or the S-corp or a C Corp, but all this stuff that the California has. But again, I'm either an LLC or a corporation because that protects your personal assets to a certain extent.
2 (56m 42s):
Okay? You still have to follow all the corporate formalities and pay all the taxes and all these. Think of it. As additional insurance provided by the state for you to have less personal liability. And by having less liability, guess what happens? You get this sleep better.
1 (57m 2s):
You don't wake up every two hours crying like a baby.
2 (57m 5s):
Well, he used to wake up every two hours if you have payroll, but that's not as bad. Maybe every three hours, that's sleeping. Think of it as sleeping. So now whether you form a business, you always form a corporation. Now, if you have a partner, okay, it was not a partner. It should mean when, if you have a another shareholder or if you go to being an investor, Charney needs to write it for someone that knows what they're doing, because yeah, it's good to say we're 50, 50, but sometimes it's 70 30 and things like that. And if I represent the one, that's a 30% owner, I make sure certain things I need 71% of the shares before it passes.
2 (57m 55s):
Otherwise, guess what? The person that has 70% of the shares has more than 50% everything they want carries.
1 (58m 2s):
Yes. Yes. That's absolutely true. Well, Nick, how can someone contact you about all that?
2 (58m 11s):
Oh, well we have several ways. Well, the, my email is, is one way. It's Nick, N I C email@example.com. Okay. So Z a R L a w F I R m.com. So Nick has our law firm.com. You can also go to our website, czar law firm.com of course. And then my phone number. And again, I answer my phones myself, because it's not even worth the headache of this going there. And we returned phone calls as fast as we can, unless I'm going to be able to try call them at 3:00 AM. No, let's not do that. I had opposing counsel do that to me last, last week.
2 (58m 51s):
Bastard. Yeah, 1:45 AM. And I told him 1:45 AM. What the heck? You know, I said, and he at two 15, he texted me a second time. Fuck. And I just went off on him and that's going to cost his client a lot of money. So what's the, what's the number? The phone number is four two four two four zero eight, seven 44. Call it again.
1 (59m 20s):
Call today. Operators are standing by God. So go ahead and say, say it again.
2 (59m 25s):
Four, two, four, two four zero eight seven four four.
1 (59m 31s):
Well, Nick, I know we could talk a lot more and I'm sure we will on a subsequent podcast, but I'd like to thank you for being our guest today on adult side broker talk.
2 (59m 40s):
Okay. Thank you very much for having me Ruth and you know, everyone again, nothing is worse than nothing more expensive than hiring a lawyer than hiring a lawyer late. Just remember that.
1 (59m 50s):
Okay. Thanks, Nick. My broker tip today is part four of how to buy a website. Last week, we discussed making an offer and deciding the best price for the site you're buying. Once you've made your offer. The work begins. If you're working with a broker, like say, oh, I don't know, maybe adult site broker, we handle the negotiation for you. Let's say the seller doesn't accept your offer. They may make a counter offer. If you decide that you're willing to pay more, you can either accept their counter offer or counter back to them. A good rule of thumb is to always leave room to negotiate. So don't make an offer. That's the absolute most you're willing to pay. If you do that, then you have nowhere to go.
1 (1h 0m 31s):
If the owner counters your offer, once the owner and you have come to a deal, then it's time to do some due diligence beyond what it is you've already done. During the initial process of looking at the site, you should have asked some questions like in the case of a pay site, how many joins and rebuilds there are per day and other pertinent questions during due diligence, you need to make sure everything is where you need it to be technically to integrate it with what you're already doing. You may even get your developer involved. If you're not tech savvy, you and or your developer should ask these pertinent questions. Once those are answered to your satisfaction, you should either have the seller or yourself drop a sales agreement.
1 (1h 1m 12s):
I always tell my clients to do the agreement. Why? Because that way you can dictate the terms. So whether you're the buyer or the seller, you can make the rules. However, just be ready to have the seller's attorney change. Some of those rules, nothing is final until everything is signed off on. Another thing we can do for our clients is to do a letter of intent prior to the sales agreement being done. This gives your attorney a roadmap for the agreement, the letter of intent and more so the agreement will have all of the terms involved, including who pays for everything who pays for escrow for instance, is, can be paid by the buyer, the seller, or split between both parties.
1 (1h 1m 52s):
We'll talk about this subject more next week. And next week we'll be talking to entrepreneur, Jack Armstrong of Magnum Rings.
0 (1h 2m 2s):
And that's it on this week's Adult Site Broker Talk. I'd once again like to thank our guest Nick Zargarpour. Talk to you next week on Adult Site Broker Talk. I'm Bruce Friedman.