Delina Yasmeh on AI Contracts, Tax Changes and Preparing to Scale

🎧 Listen: Castos  |  📺 Watch: full episode on YouTube

Want the step-by-step version? Use the free Prepare Before You Scale SOP built from this episode – eight steps, each with a question to bring to a qualified professional.

After more than a thousand consultations with business owners, business and tax attorney Delina Yasmeh says AI has made good lawyers more necessary, not less – she has yet to see an AI-drafted contract that was any good. Delina is the founder and principal attorney of DELINA.ESQ, a business and tax law firm in Los Angeles. She holds an accounting degree, a law degree and a master’s in taxation (“So that on its own is extremely rare.”), and she worked on M&A deals at Deloitte and PwC before starting her own firm. On this episode of the Unscripted Small Business Podcast, she and host Jeremy Rivera talked about where new owners cut corners, how to sort good advice from bad, what she’s watching in taxes heading into 2027, and how AI is changing what a business owner has to know.

Most small business owners aren’t doing enough to prepare

Jeremy opened with the biggest pitfall Delina sees. Her answer starts with something she knows owners don’t love to hear: “most small business owners are simply not doing enough to prepare when they are starting or scaling a business.”

Her example is the website. She lists the terms of service, the privacy policy and the ADA terms, and says that not having them, or not knowing what she’s talking about, “can lead to a lot of trouble.” In her words, “One lawsuit on your hands can make the business go down the drain.”

Part of the problem, as she sees it, is how easy starting has become. “We live in an age where it is very easy, seemingly easy to enter into business.” Because of that, she finds a lot of people starting businesses without all of the moving pieces thought out.

One real consultation beats the wild west of online advice

Jeremy said what plenty of owners feel: LinkedIn tells you to do one thing, a Google search gives you ten others, and everyone you meet knows what you need. Delina told him that’s the core of her business model. “I think that we are in the wild, wild west of information online.”

Her read is that the attorneys at top firms, the ones who should be giving this kind of advice, already have their clients and aren’t online. What reaches small business owners instead is often “geared towards marketing and trying to sell you something that you may or may not need.”

Her general approach has a clear order to it:

• Research first. She suggests doing as much research as you can on your own until you get to “a point where you have some thoughtful questions.”
• Then one consultation. She tells clients to have at least one conversation with a business attorney or strategist who works with startups and small businesses, so they know what belongs at the top of the list.
• Then prioritize by budget and risk. She lays out options for clients “in terms of budget and in terms of also risk.”

Her website example shows what that prioritizing looks like in practice. “If you’re not in a place to get a website with terms and all of these moving things up and running, then don’t have a website yet. Put yourself on Instagram,” she said, and use platforms that don’t need that level of setup until you get there. Same with taxes: “I don’t need you doing a tax strategy until you actually have money coming in the door.” Her point isn’t that every risk disappears. It’s that you know you’re taking one until you get there. Her closing line on the topic: “There is a lot of bad advice going around online.”

If you want a sense of what that first legal conversation covers, Matthew Fornaro walked through the legal groundwork small businesses skip on an earlier episode.

Delina’s tax outlook for 2027: the IRS is using AI too

Jeremy asked what the writing on the wall says for taxes. Delina’s first concern is people cutting corners on their books and their tax structuring while “the IRS is heavily, heavily, heavily implementing AI in the coming years.” She says a lot of wishy-washy tax advice is going around, and that people have gotten away with things like write-offs they shouldn’t take, or tax rules applied the wrong way, because the IRS has had its hands tied. Now that the IRS is using AI in its tax return reviews, she’s seeing that start to get honed in on.

Her general warning is about the friend who swears something is a write-off. She says to double and triple check it, because “just because somebody has been doing something and has not gotten caught by the IRS and has not been audited does not make it okay.”

She also had good news. Delina said the 20% qualified income deduction is now permanent, that there’s 100% bonus depreciation for qualifying property, and that the section 179 expense “is essentially being expanded.” She sees that as a reason for businesses with active revenue and capital to plan purchases, investments and entity structuring ahead of time. “I would say right now is a perfect time to plan for 2027,” she said, and to speak with a tax strategist about it. Whether any of this fits your business is a question for your own tax professional. For the bookkeeping side of being ready, Maya Weinreb’s episode on AI bookkeeping and clean books is a good companion.

AI raises the bar on knowing your own business

Jeremy asked where business owners are stepping on their own toes by putting AI on everything. Delina’s first answer: “First and foremost, it’s data and privacy.” Her second is recognizing the limits of what the tools can and can’t do.

She sees businesses get a powerful tool and skip the steps that make sure everything is handled correctly. That can mean a data breach, or it can mean the job simply doesn’t get done right. Her firm uses AI all the time, and she says “it is absolutely necessary,” but she is “constantly checking and rechecking,” with a team making sure the data and the legal research are where they need to be.

Her warning signal is about expertise. In her words, “you need to make sure that whatever it is you’re doing with AI, you know it in and out yourself,” so you can check for mistakes. She used a dental practice and a plumbing business as examples. If the owner hasn’t learned the industry well enough and is relying on the AI to do the job, that’s where she expects trouble. If you haven’t looked at what your team is pasting into these tools, the free AI Paste Audit SOP is a place to start.

She caught a changed contract in two seconds

Delina told a story from a back-and-forth with another attorney. She uses AI to dictate her emails, but reads the contracts herself. After five rounds, the other attorney changed the terms entirely and wrote that he hadn’t changed anything. She thinks he assumed that because AI was drafting her emails, she wasn’t reading. “I caught it in two seconds.”

Jeremy raised the agency version: an SEO provider who hands the work to an AI bot that pulls old information and hurts the client’s site – the kind of sloppy output his friend Michael McDougald of Right Thing SEO calls AI slop. Delina said “I absolutely think it’s a major liability,” and that she’s had to build this into consulting clients’ contracts with their own clients. Her view: “it needs to be built into your contracts that you are using AI and to have the transparency.” What that looks like for your business is a conversation to have with your own attorney.

AI made Delina more necessary, not less

Jeremy brought up one of his past guests, who works with Oleno, which builds shared marketing context for AI tools. Jeremy’s point was that someone who knows what they’re doing can set up their own AI for a specific task, but if you don’t set up everyone else’s with the right prompts and “the right shared SOP,” then “you’ll get radically different results.” Jeremy summed it up with a line of his own: “it’s artificial intelligence, not artificial wisdom.”

Delina agreed, and said she has spent “a year and a half with my team working on the back end” of her firm’s AI so it gives the answers and context she needs, and they’re still checking and adjusting. She keeps getting asked whether AI means people don’t need lawyers anymore. Her answer:

“If anything, it’s made it so that I am more necessary.”

Clients and potential clients send her documents they drafted with AI. “I don’t think I’ve seen a single AI drafted contract that has been good,” she said. She tells clients, “I would rather you have a handshake and nothing on paper than what this is saying,” because a bad AI draft can create more issues and more liability. Echoing Jeremy, she put it plainly: “This is not wisdom.” It’s a tool, and “it is not an entity, it is not your coworker.” Used the right way, she says, there are wonderful things AI can do to expand a business.

Ask what needs to happen now so year three goes smoothly

Delina’s favorite clients are tech startups. She finds them eager, usually well planned, and full of moving parts, with several founders and often stock involved, which makes each one “a huge puzzle piece” with no one-size-fits-all answer.

Jeremy asked what she wishes her ideal client would ask her in an elevator. Her answer: “what is it that we need to get done right now so that in three years from now we don’t have issues with the business?”

Jeremy liked that it wasn’t a five-year plan, since nobody predicted how fast AI tools would take off. Delina’s version of planning: “you need to have a direction,” two to three years out, while “bookending the weeks, the months, and the quarters.” Then you “adjust and be flexible.” She sees recurring bottlenecks in growing businesses, and when something shifts, a business with a clear goal and its own data is “able to pivot faster” than one with no plan at all.

Prove the concept before you file the paperwork

Jeremy brought up Brandon Moon, who told him you should know your end game before you start a business, and asked Delina what she’d say to someone thinking about leaving their 9-to-5. She agreed with Brandon first:

“You need to understand where you’re going so you can get to where you want to be.”

Building to sell, building to pass on and building to keep are different businesses, she said. For someone still in a 9-to-5, her general advice depends on what they want to start. For a consulting firm or a product, she’d want proof of concept first. Her example is someone who sews beautiful scarves: first see whether it brings in income. “It might even be don’t start an LLC quite yet,” she said. In six months or a year, with proof of concept in hand, that’s when she’d have someone sit down with a business attorney.

At that point, she talked about entity structuring and, with a business partner, an operating agreement that spells out what happens if there’s a dispute, if someone passes away, or if someone wants to marry and move to another country. A restaurant is a different ballgame, she said, because the capital has to be there first, so the structuring and research come before you step through the door. For a cautionary tale on that operating agreement, read Phil Crowley on the operating agreement that wasn’t one.

She also works with legacy companies going through a sale, some around since the 1930s, where contracts may be in boxes in an office and the deals from decades ago “were done with handshakes. So how do you bring that value onto paper for a buyer?”

Why every recap of this episode carries a disclaimer

Jeremy asked Delina what a book built from someone’s interviews would need before it went out. Her answer was a disclaimer, and she was firm about it. It would need to be “very, very clear that this is not specific legal and business advice. It is general advice.” She said “the legal is much, much, much more stringent,” and accounting and financial advice are close behind, while leadership is broader. On her own posts, “we always have the disclaimer in there.” That’s why you’ll find one at the top of this page.

She also explained why marketing a law firm is different. Ethics rules limit how attorneys can reach out to potential clients. She can’t pay a non-attorney a cut for bringing in a client, so a commissioned sales team is off the table. She can’t give specific legal advice online, and “I do not want to ever unintentionally create an attorney-client relationship.” She can’t share client details, so her stories get generalized, which is why the examples in this episode don’t name anyone.

Two more takes on this conversation: what agencies and marketers should take from Delina Yasmeh on AI liability and client contracts on SEO Arcade, and Jeremy’s own reflection on artificial intelligence, not artificial wisdom.

Connect with Delina Yasmeh

• Firm website: DELINA.ESQ
• Free general answers to recurring questions: the DELINA.ESQ law library
• Her work with founders: startup attorney in California and tax attorney for small business owners
• How her firm uses AI: AI use disclosure
• Instagram: Delina Esquire
• YouTube: Delina Esquire on YouTube
• LinkedIn: Delina Yasmeh

🎧 Listen: Castos  |  📺 Watch: full episode on YouTube

Sponsor disclosure: uSERP, Oleno and ClearLead Digital are paid sponsors of the Unscripted podcast network. Links to them are marked as sponsored.

Keep going → Browse the interviews