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On this episode of the Unscripted Small Business Podcast, host Abbey Crane talks with Matthew Fornaro of Fornaro Legal, a business law attorney in Coral Springs, Florida, who is also licensed in Washington, D.C. Matthew works with small and medium-sized businesses on their legal issues, and he has run his own firm for almost 10 years. Most of this conversation is about the paperwork that feels optional on day one and turns out to be the thing you reach for when something goes wrong.
He watched his dad run a business without a lawyer who spoke business
Matthew had the chance to join one of the largest law firms in the world. He chose to start his own instead, partly to get away from “being like a cog in the wheel,” and partly because of what he saw growing up. His dad ran a medical equipment business, and Matthew watched him deal with problems from a business side and a legal side at the same time.
“I always thought it would be nice if there was like a attorney who could kind of understand business and then kind of counsel people in my dad’s position.”
He’s candid that starting a firm meant learning business from scratch: “I didn’t really know anything about business or small businesses,” he said, and the early years were “a lot of trial and error.” He used to have a virtual associate and assistant. Today he has one assistant, and AI covers work that used to need more people.
AI is a tool for your work, not a stand-in for it
Abbey asked whether he worries about owners using ChatGPT or online services to write their own contracts. His answer applies to any industry:
“It’s a tool to enhance your productivity or to enhance your work product or to enhance your efficiency. It’s not a replacement for due diligence and actual work.”
He pointed to attorneys who paste AI output into court filings without checking it and end up citing cases that don’t exist. On the contract side, the problem is quieter. A good contract has provisions that account for everything, and AI “kind of wants to, you know, just get from point A to Z as quickly as possible,” so the clauses you need are missing or understated.
Every relationship in your business needs a written contract
Start with the documents that define the business itself. A corporation needs articles of incorporation and bylaws. An LLC needs its membership and operating agreement. Then, Matthew says, every relationship gets its own contract:
“If you have a relationship with a person or a thing, you need to have a contract that governs it.”
That covers what you buy, what you sell and what you use. Selling online, it can be a click-to-accept terms page. Selling services, it can be a document the other side reviews and signs electronically. Many businesses just send and pay invoices, which works until there’s a problem. Without a contract, you fall back on “what does the law say,” and that’s where lawsuits start.
Pick your structure with your accountant in the room
Matthew walked through the options: a sole proprietorship (you, doing business under a DBA), a corporation, an S corporation (taxed through you individually, “which could save you a lot of money each year”), an LLC, a traditional partnership and a limited liability partnership. His process is to bring in the client’s accountant, because “legally you may be able to do four or five different kinds of business organizations, but financially, if it doesn’t match up with where you are monetarily… it could be a disaster.”
Switching later is less painful than people expect. In Florida, he said, it’s mostly paperwork with the Secretary of State and a notice to the IRS. The follow-up work, like redoing your contracts, is where the due diligence comes in.
Abbey also asked whether you can hire a lawyer from any state. You can, but Matthew refers out work outside Florida and D.C.: “I don’t try to pretend I know what to do in New York or I know what to do for Delaware.”
The most common mistake is starting too fast
The pattern Matthew sees most is owners getting ahead of themselves before the foundation is in place.
“Every business should have a written business plan before you even start the business.”
That plan should say what the business is, who’s involved, where the money comes from, what kind of entity it is and what the goals are. Without it, “you’re kind of just making it up as you go.” He added one that surprises a lot of owners: beyond registering with the state, you may also need to register with your county and city. In Broward County, those are called tax certificates. Elsewhere they’re occupational licenses.
When should you bring in an attorney? Matthew’s view is to budget for one from the start, in a professional fees line alongside your accountant, banker and web help. Is it tens of thousands of dollars? “No. Is it thousands of dollars? Maybe. Is it more than hundreds of dollars? Yes.”
Balance, mentors and two free programs
Running a practice while serving clients seven days a week and raising a family comes down to “effective clock management” and good written plans. His advice for anyone opening their own practice: do your due diligence, ask people for help, and be ready to learn how to run a business, not just do the work you did before.
His mentors were his dad, a former boss he still talks to almost daily, and two programs he recommends to business owners: the Jim Moran Institute at Florida State University and the Kauffman Foundation. Abbey closed with her fill-in-the-blank question, “You have to blank to blank,” and Matthew answered: “You have to prepare to succeed.”
You can find Matthew’s videos, articles and white papers at fornarolegal.com and connect with him on LinkedIn.
More on this from the show: Phil Crowley on the operating agreement that wasn’t, and our roundup on where a small business should not use AI.
This article is general information for business owners and is not legal advice. Reading it or listening to the episode does not create an attorney-client relationship.