Michael Huseby runs the Freelancer’s Lawyer website. He is a corporate attorney who built a freelance writing business while living in Colombia. Now, his mission is to combine his legal knowledge with his freelancing experience to help freelancers protect their rights.
A native of the Pacific Northwest, Michael has lived in Washington, California, New York, Colombia, and Belgium. Since he’s had experience as both a freelance writer and a freelance lawyer, we’ve invited him to answer some common basic legal questions you should ask before getting started.
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About Michael
Briefly describe your freelance set up for us.
M: Currently, I split my time between being an attorney and a freelance writer. On the writing side, I mostly write for clients in the health, business, and legal industries. I also do a bit of travel writing — I’m a huge fan of exploring new places and cultures.
Why do you choose to be freelance instead of full-time?
M: I began freelance writing because I wanted to be location-independent. I spent most of 2019 living in South America and wanted to find a way to make money while traveling. Freelancing is also great because you can set your own schedule.
1. Are there legal documents I signed with my company that might prevent me from freelancing? If so, which ones should I look for?
M: Before starting your freelance business and finding clients, you’ll want to make sure you won’t be breaching any contracts with former employers.
Non-solicitation agreements 
M: If you signed a non-solicitation agreement, you might not be able to go after your previous employer’s clients for a certain period of time (usually a year or two). Businesses don’t want their people to leave and then start poaching their clients.
Non-compete agreements
M: Non-compete agreements might also give you a bit of trouble. These contracts might prohibit you from competing against your previous employer for a certain number of years.
Most non-competes are geographically limited. For example, you might not be able to compete as a freelance graphic designer against your previous graphic design agency for two years within 100 miles of the agency’s principal office.
Confidentiality agreements
M: Your previous employment contract also likely had confidentiality provisions, prohibiting you from disclosing your employer’s secret information, business model, and anything else defined as “confidential.” Just be sure you don’t go around spilling the beans about how your previous employer operated its business.
Many freelancers — especially new freelancers who are new to their craft — won’t have to deal with these issues, but it’s always better to be safe than sorry.
2. What’s the difference between a sole proprietorship and an LLC?
M: If you wake up one day and start freelancing without forming a legal entity, you’re operating a sole proprietorship. You don’t need to file any paperwork or pay any fees — you’re good to go.
However, as a sole proprietor, you’ll be personally on the hook in case anything goes wrong in your business. For example, if you get sued because you used someone else’s copyrighted contact in your white paper, you may be financially on the hook. Not fun!
On the other hand, an LLC is a state-sanctioned legal entity that can protect you from liability. You’ll need to fill out some forms and pay a few filing fees, but the added protection is worth the effort. You don’t want to be personally liable for court judgments, business loans, or other financial obligations of your freelance business.
When signing contracts with clients, make sure to sign in the name of your LLC — the legal entity should be a party to the agreement, not you.
If you want to learn more about sole proprietorships, LLCs, and corporations, check out Which legal entity is best for freelancers?
3. Do I need to start an LLC before I start freelancing?
M: Nope. You can start freelancing before forming a legal entity. However, as mentioned above, forming an LLC is a great way to protect yourself from liability for business-related obligations.
(You can use an online service to set up your LLC in just a couple of weeks, they typically charge a small fee on top of state filing costs. Learn more about online LLC setup and find your state’s costs here with ZenBusiness.)
4. Do I need a contract for every freelance job?
M: You don’t technically need a contract for every freelance job. In many cases, a written email containing your terms and conditions can serve as an enforceable agreement.
However, I recommend that freelancers create a short, simple contract they can provide to their freelancing clients. Without a written agreement, you might run into the following problems:
- Your client doesn’t pay on time (or at all).
- Your client asks for never-ending revisions.
- You and your client disagree on deliverables.
- You and your client disagree on ownership of the content you created.
While it might seem a bit awkward to ask your client to sign a legal agreement, the peace of mind is worth it. Plus, providing a contract makes you appear more professional and credible.
5. What are the basics that my contract should include?
M: A basic freelancer contract should include the following terms:
- Payment. How much will you be paid? How do you want to be paid? When is payment due?
- Services. What services will you provide? How many rounds of revisions do you allow? How will you deliver the final product?
- Term and termination. How long does the contract last? Can either party terminate the contract early? What happens if you terminate the agreement?
- Representations and warranties. Your client may ask you to represent and warrant — fancy terms for “promise” — that you own (or otherwise have the right to use) all of the content you used in your work product.
- Intellectual property ownership. Who owns your work product? Can you license your work to other parties? Is your creation a work made for hire?
Of course, contacts can get much more complicated than this. For a bit more detail, check out What Should I Have in a Freelancer Legal Contract?
6. Who owns the work that I do once I give it to the client?
M: Here’s a lawyer answer for you: it depends. Here, we’ll look at a few ways ownership can be allocated between freelancers and clients.
The basics
In general, the person who creates content gets the copyright — this is true even if you don’t register the work with the Copyright Office. So, without a contract, freelancers own the content they create
The rules are different if you’re an employee — your employer tends to own the works you create in the course of your employment. If you’re not sure whether you’re an employee, check out Are Freelancers Employees or Independent Contractors?
Assignments
Many legal contracts have language requiring that freelancers transfer — or “assign” — the copyright in the deliverable to the client. In many cases, this makes sense. If a client is paying you to create something for them, it’s reasonable that they should get the rights. Just make sure you check the contract. You don’t want to assign your rights without realizing it.
Licenses
Some agreements may contain a “license,” where the freelancer keeps the rights to the work but gives the client permission to use it. The license might terminate after a specified period of time.
An individual license might only apply to certain rights. For example, your client might get the right to use an article online but not in print.
Licenses can also be exclusive or non-exclusive. If you exclusively license content to a client, they’re the only one that can use it. On the other hand, you can non-exclusively license your work to multiple clients without any legal trouble.
Work for hire
Finally, there’s work for hire. When a work is made for hire, the client is automatically considered the author/owner — you don’t need to execute an assignment. For a freelancer’s work to be deemed a work made for hire, there needs to be a signed document declaring that the work is being made for hire. For a full explanation, check out this article on works made for hire.
Anything else you’d like to make sure that other freelancers know?
M: Don’t forget that you have to pay taxes on your earnings. I recommend keeping a separate account where you keep the money you expect to pay in taxes to the government. In the United States, tax rates range from 10% to 37%, depending on your income. (For more information on taxes, you can check out our Ultimate Guide to Freelance Taxes here.)
Make sure to keep careful records of all your earnings and expenses. When tax day rolls around, you’ll need evidence of everything you want to claim as a business expense on your tax return.
Your tracking system doesn’t have to be super fancy. I just use a few Google Sheets to track everything, and it works perfectly fine for me. But you don’t want tax day to catch you by surprise and have to suddenly go through every payment you’ve made or received over the past year. Or worse — forget that you owe taxes in the first place and fail to budget for your tax liability.
Learn more about Michael’s journey and get more of your freelance legal questions answer at The Freelancer’s Lawyer.
Like!! I blog frequently and I really thank you for your content. The article has truly peaked my interest.
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