An Interview With Chad Silverstein
Fail to Engage an Experienced Business Attorney — Many new businesses make the mistake of failing to work with an experienced business attorney from day one to establish the right business structure with comprehensive governing documents that include succession planning.
In today’s fast-paced business world, the complexity of legal matters can often be overlooked, leading to significant repercussions for businesses of all sizes. From startup ventures to established corporations, the absence of legal guidance can result in critical errors that affect growth, operations, and sustainability. These mistakes range from issues with contracts and intellectual property to compliance and employment law, each carrying the potential for financial loss and reputational damage. I had the pleasure of interviewing Trey Hendershot.
Simon W. “Trey” Hendershot III is the Managing Shareholder of Hendershot Cowart P.C., where he leads a team of skilled business attorneys practicing complex business litigation, health law, regulatory compliance, and OSHA defense since 1987. With over three decades of experience, Trey has built his reputation on zealous representation distinguished by personal attention, extensive preparation, and a deep commitment to integrity that stems from his strong faith and the work ethic instilled by his father and grandfather. A fourth-generation Texan with roots in ranching, Trey takes pride in partnering with clients for the life of their business — from startup to mature market leadership — handling everything from small business disputes to multi-million-dollar, high-stakes litigation while embodying his firm’s philosophy: “Your Attorney. Your Team. Your Law Firm for Life.”
Thank you for joining us. To start, could you share your “origin story” with our readers? How did you begin your career? What challenges did you face in the early days? How did you overcome them?
My decision to practice law was inspired by the strong work ethic of my father and grandfather. I grew up in Gonzales, Texas, on a cattle ranch where my dad would be out before the sun came up and wouldn’t come home until well after sunset. That’s where I learned the meaning of hard work and dedication.
My father and grandfather also instilled in me the values of honesty and integrity — that your word is your worth. When you tell somebody you’re going to do something, it happens exactly as you promised. These principles became the foundation of my approach to the practice of law.
I chose law because I enjoy problem-solving and applying creative, strategic thinking to complex issues. After graduating from South Texas College of Law, I was fortunate to begin my career under the mentorship of Turner Pope, who hired me straight out of law school. Turner was instrumental in teaching me how to run a law practice. He would call me into his office and say, “Now Trey, at some point in time, you’re going to be doing this, and here are things you need to think about.” Like my father, Turner emphasized the importance of integrity and delivering on what you promise to clients.
One of the biggest challenges I faced early on was simply figuring out how to run a law practice effectively. Learning the business side while simultaneously developing my legal expertise required tremendous effort and time. Another significant challenge has been finding the right attorneys to bring in as associates and shareholders who share our firm’s values and work ethic. Not everyone has the same commitment to excellence and client service that we demand.
I overcame these challenges through persistence, mentorship, and staying true to the principles that guided me from the beginning. Today, I believe we have an excellent team at Hendershot Cowart P.C., where every attorney is genuinely invested in our clients’ success and shares our commitment to integrity and hard work.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
While I enjoy many books that share wisdom from real-life experiences, the book that has had the most profound impact on my life and career is the Bible. I am not shy about my faith — I am a Christian and have been active in the church for most of my life. The teachings and principles found in the Bible form the ethical foundation for both my personal life and my law firm.
My faith reminds me daily that my work is not just about legal outcomes but about helping people protect what they’ve built and achieve their goals with integrity and excellence.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
One life lesson that has guided me throughout my career came from my father and grandfather: “Your word is your worth.” This simple principle has been at the core of how I conduct business and live my life. When you tell somebody you’re going to do something, it happens exactly as you promised.
This lesson became particularly relevant when I started my own practice. In the legal world, your reputation is everything. Clients come to you with their most important matters — disputes that threaten their businesses, regulatory challenges that could derail their careers, or transactions that represent years of hard work.
I’ve seen countless examples where attorneys make promises they can’t keep or set unrealistic expectations just to land the client. That approach might work in the short term, but it inevitably leads to disappointment and damaged relationships.
Throughout my 37 years of practice, I’ve built my reputation on being straightforward with clients about what we can and cannot accomplish and then delivering on those promises. I want to be remembered as someone whose word can be counted on — when I make a commitment, clients know they can count on it happening exactly as promised.
This principle has not only helped me build a successful practice but has led to long-term relationships with clients who trust us to handle their legal matters throughout the life of their businesses — from startup to mature market leadership. Some clients I’ve represented for decades continue to flourish with our firm’s ongoing counsel, which is the greatest testament to the value of keeping your word.
How have you used your success to make the world a better place?
I believe that helping businesses succeed and protect what they’ve built contributes significantly to our community and economy. Many of the clients I’ve represented for decades continue to flourish with my firm’s ongoing counsel. As a fourth-generation Texan, I love this state and want to see Texas businesses and entrepreneurs succeed. I take great pride in contributing to that success.
Ok, let’s now turn to the central part of our interview. What is the most common legal mistake you see businesses make due to the lack of proper legal counsel, and what are its potential consequences?
The most common and costly mistake I see businesses make is not putting foundational agreements — such as an operating agreement or shareholder agreement — in place.
When you’re forming a business, you’re usually on good terms with your other shareholders or partners. Everyone is excited about what the future holds. But a few years down the line, those opinions may start to branch out and go in different directions. As the saying goes, “The best thing between good neighbors is a good fence.” That’s essentially what a good operating agreement or shareholder agreement provides — clear boundaries and protocols for handling changes and transitions.
Failing to implement proper succession and exit planning is another common mistake. Over 80 percent of businesses that come through my door don’t have a formal written succession plan in place. This oversight can lead to devastating consequences when partners disagree, someone wants to retire, a key person becomes disabled, or worse — when someone passes away unexpectedly.
Without proper planning, a business can face expensive litigation, paused or disrupted operations during disputes, forced sales at unfavorable valuations, or even complete dissolution. I’ve seen family businesses torn apart and decades of work destroyed simply because the founders didn’t plan for inevitable transitions.
Can you share an example where early legal intervention could have significantly altered the outcome of a business dispute or challenge?
I recently dealt with a situation involving earn-outs in a business sale that perfectly illustrates the importance of early legal intervention. A business owner came to me after things had already gone wrong — unfortunately, too late for us to prevent the problem, but they sought our help to fix the mess.
In this case, the owner had sold their business with a significant portion of the purchase price structured as an earn-out. In the definitive closing documents, they had to hit a certain EBITDA threshold before they could receive the earn-out payment. However, buried in the fine print was language stating that even if they hit that EBITDA target, the buyers didn’t have to pay the earn-out unless there was “sufficient free cash from operations.”
The definition of “free cash from operations” essentially meant whatever money was left over after the new owners did whatever they wanted with the company’s funds. In this particular case, the new owners purchased a building for themselves and then claimed, “Sorry, we just bought this building and used all your free cash from operations, so you don’t get your earn-out.”
Had this business owner consulted with us before signing the letter of intent (which, despite being labeled “non-binding,” locked them into certain terms), we could have identified this problematic language, negotiated better terms, and structured the deal to protect their interests. We would have ensured that the calculation of earn-out payments couldn’t be manipulated through creative accounting or self-serving expenditures by the buyer.
This business owner essentially lost millions of dollars that represented years of hard work building their company — all because they didn’t have proper legal counsel reviewing their documents before signing. With early legal intervention, they likely would have received the full value they thought they were getting when they agreed to sell their business.
How do changes in digital technology and online business practices complicate legal issues for businesses without dedicated legal advice?
Digital technology and online business practices have transformed how businesses operate, but they’ve also created new legal complexities that many business owners aren’t equipped to navigate without proper counsel.
One critical area is regulatory compliance. For healthcare providers, telehealth has expanded rapidly, especially since the pandemic, but it brings complex compliance challenges related to patient privacy, data security, and licensing across jurisdictions.
Intellectual property in the digital realm is particularly complex. We frequently work with clients who didn’t realize they needed — or don’t know how — to protect their online brand and intellectual property. In one case, I represented an e-prescribing company in litigation alleging patent infringement — a situation that could have been avoided with proper IP planning from the beginning.
Employment issues have also evolved with remote work becoming common. Many businesses don’t realize that having employees working in different states creates jurisdictional issues with employment agreements, varying workers’ compensation requirements, and employment law compliance issues.
Contract formation in the digital world presents additional challenges. Is a digital signature valid? Are terms presented on a website legally binding? Without legal guidance, businesses often use inadequate online contracts that may not be enforceable when disputes arise.
These challenges are compounded by the rapid pace of technological change and regulatory adaptation. What was compliant last year may not be today. Without dedicated legal advice, businesses often find themselves playing catch-up with compliance rather than proactively managing these issues.
In your experience, how does the absence of legal counsel impact a business’s approach to contracts and negotiations, and what advice would you give to mitigate these risks?
The absence of legal counsel in contract negotiations often leads to what I call the “cocktail party approach” — where business owners rely on casual advice from friends or colleagues rather than professional guidance. This approach typically manifests in several ways that create significant risk.
First, businesses without legal counsel tend to focus exclusively on the business terms (price, delivery dates, etc.) while overlooking critical legal provisions that determine what happens when things go wrong. They sign contracts with one-sided indemnification clauses, unfavorable dispute resolution provisions, or unrealistic performance guarantees that create enormous liability.
Second, I’ve seen countless businesses sign form contracts provided by the other party without any modifications. These standardized agreements are almost always drafted to benefit the party that created them. Without legal counsel to identify and negotiate problematic terms, businesses essentially agree to play by the other side’s rules.
Third, businesses without legal counsel often fail to document their agreements properly. They rely on emails, verbal discussions, or incomplete drafts, creating uncertainty about the actual terms agreed upon. When disputes arise, they’re left without clear evidence of what was promised.
To mitigate these risks, I advise businesses to:
- Always consult with an attorney before signing any significant contract, especially letters of intent. Despite being labeled “non-binding,” these documents often contain provisions that are binding and can limit your options moving forward.
- Develop standardized contracts for routine business transactions that protect your interests. Having your attorney create templates that you can use repeatedly is cost-effective in the long run.
- Never sign the other party’s “standard form” without review. These forms are designed to protect them, not you.
- Consider the whole lifecycle of the business relationship, not just the immediate outcome. A good contract addresses not only how the deal works today, but how it may unwind in the future.
- Understand that negotiating fair terms from the beginning is much less expensive than litigating disputes later. The cost of proper legal counsel in contract negotiation is an investment that pays dividends in risk reduction.
- Remember that contracts are not just legal formalities — they’re the rules that govern your business relationships. Having counsel help establish those rules ensures they work for you, not against you.
What legal pitfalls do new businesses often overlook during their initial setup and growth phases, and how can they proactively address these issues?
New businesses frequently overlook several critical legal considerations during their initial setup and growth phases. These can create significant problems down the road.
First and foremost is choosing the wrong business structure or failing to properly document the relationships between owners. I’ve seen countless partnerships and small corporations operate with inadequate or non-existent operating agreements. When disputes inevitably arise, there’s no clear protocol for resolving them, often leading to expensive litigation or business dissolution.
Another major pitfall is inadequate protection of intellectual property. Many entrepreneurs don’t realize the importance of securing their trademarks, copyrights, or trade secrets early. They may also fail to implement proper confidentiality and non-disclosure agreements with employees and contractors who have access to proprietary information. This oversight can result in losing control of valuable assets or facing costly infringement claims.
Employment law compliance is frequently neglected as businesses grow. Many startups hire workers as independent contractors when they legally should be classified as employees, or they fail to implement proper employment policies and handbooks. These mistakes can lead to wage and hour claims, discrimination lawsuits, or reputational damage caused by improper or illegal activity by employees on social media.
Finally, new businesses frequently underestimate the importance of proper contracts with customers, vendors, and partners. They often use templates found online that don’t address their specific needs or adequately protect their interests.
To mitigate potential pitfalls and ensure long-term success, new businesses should hire an experienced business attorney from the start.
Here is our main question. Could you list and briefly explain “Top 5 Mistakes Businesses Make Without Legal Counsel” based on your experiences and insights? If you can, please share a story or example for each.
1 . Fail to Engage an Experienced Business Attorney — Many new businesses make the mistake of failing to work with an experienced business attorney from day one to establish the right business structure with comprehensive governing documents that include succession planning.
2 . Fail to Identify and Protect Intellectual Property — Businesses often fail to implement a systematic approach to identifying and protecting intellectual property assets.
3 . Fail to Create and Implement Proper Employment Practices — Businesses routinely fail to develop proper employment practices and documentation before hiring their first employee.
4 . Fail to Develop Robust Compliance Protocols — New businesses often fail to identify all regulatory requirements for their specific industry and create compliance protocols.
5 . Fail to Design Customized Contract Templates — Many businesses fail to create customized contract templates that protect their business’s interests in all key relationships.
6 . Fail to Build a Team of Trusted Advisors — New businesses generally fail to establish relationships with a team of advisors, including an attorney, CPA, and wealth manager, who can collaborate on their long-term business strategy.
At Hendershot Cowart P.C., we’ve developed a comprehensive checklist that helps new businesses address these considerations from the start. By identifying potential legal issues early, we can help entrepreneurs build their businesses on a solid legal foundation that supports growth rather than creating obstacles.
Remember, it’s never too early to get proper legal advice, but sometimes it can be too late to undo damage that could have been prevented.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
As we wrap up, how can our readers follow your work? They can find us on X, Facebook, Instagram, LinkedIn, and YouTube.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
About the Interviewer: Chad Silverstein is a seasoned entrepreneur with 25+ years of experience as a Founder and CEO. While attending Ohio State University, he launched his first company, Choice Recovery, Inc., a nationally recognized healthcare collection agency — twice ranked the #1 workplace in Ohio. In 2013, he founded [re]start, helping thousands of people find meaningful career opportunities. After selling both companies, Chad shifted his focus to his true passion — leadership. Today, he coaches founders and CEOs at Built to Lead, advises Authority Magazine’s Thought Leader Incubator.
Trey Hendershot of Hendershot Cowart PC On The Top 5 Mistakes Businesses Make Without Legal Counsel was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.