On anther site I had a blog on useful things a newbie to the hobby. I got permission to move them here so I updated them and will move all three of them over over the next little while. Please feel free to add your knowledge to them. I am not an expert in the law nor the hobby. I have done my homework but I do have gaps in my knowledge.
Newbie primer how to deal with LE if you should meet up with them in the hobby.

I know of to many people that have done real damage to their lives by not knowing how to deal with the police and how to utilize their rights in a way that keeps them from making things worse. I know many areas has a vice department who's job it is to stamp out prostitution. Anyway this information is important both in and out of the hobby. You never know when the popo is going to enter ones life.

First things first, an ounce of prevention is worth a pound of cure. Screening for both clients and providers is essential. I will have a dedicated  thread in the future on that so I will be short on the subject. Ladies get and check references, or get real information like employment and check it. Guys see well reviewed ladies. Sites like this is cheaper than one bad experience. It is a whole lot cheaper than getting busted. Backchanneling is your friend. Screening will greatly reduce the odds of being busted.

Next should that fail you need to be prepared. It is good to be prepared even if you are not doing anything illegal, but it is vital if you are. Have some money set aside so you can make bail and pay a lawyer if needed. Do you research and find a lawyer and bail bondsmen and have their number on you or better yet memorize them. You do not want to do this research in a time of desperation. Please do so now. Please know your rights. Your rights are your only protection in a police encounter. Do not learn them after you wave them. It is best to be prepared.

Most of our rights that are involved in a police encounter come from three amendments. Lets read them:
Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Amendment V

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Amendment VI

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.
These amendments in the constitution are summed in what is known as the Miranda Warning. Here is one example of said warning:
1. You have the right to remain silent. Do you understand?

2. Anything you say may be used against you in court. Do you understand?

3. You have the right to the presence of an attorney before and during any questioning. Do you understand?

4. If you cannot afford an attorney, one will be appointed for you free of charge before any questioning if you want. Do you understand?

5. Do you wish to waive these rights?

http://www.criminallawconsulting.com/blog/what-exactly-is-the-text-of-the-miranda-rights-statement-police-read-to-suspects

Please note the cops can and often will question you before reading said rights and can and will use what you say against you in the court of law. They only have to give you your rights if you are being arrested and if the are officially questioning you. Know them before you need them.

But what do you do when the time comes and you are face to face with LE?

First and most important, STFU! You have the right to remain silent, use it. Nothing good can come from opening your mouth. Everything that could possible be used against you will be used against you in a court of law. Nothing you say can help you, but it sure can damn you when it come to trail or swinging a deal.

You are far more likely to talk your way into a jail cell then out of one. And do not believe the cops threats or promises to help. Cops can and do lie to get you to incriminate yourself. Cops can't make binding deals only the DA's office can do that in most jurisdictions. Just shut up.

Here is a two part video on why you should shut up:

http://www.youtube.com/watch?v=i8z7NC5sgik

http://www.youtube.com/watch?v=08fZQWjDVKE

About five years ago the Supreme Court ruled you must invoke your right to remain silent do so. So do so. Here is an article on that:

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/01/AR2010060102114.html

Second remain calm, be polite, and show respect. Cops have a hard job that can be dangerous. If you are act scared, run,  behave panicked, or come across as angry it could make the cops nervous or angry. This can lead to bad situations. Never run, touch a cop, or resist this will cause things to escalate. Don't lie to a cop, that too can make things real bad for you in a hurry. Just politely execute your rights and things will go better for you.

Third, you do have the right to refuse searches. It is wise to do so verbally. If they have a warrant or probable cause they can and will preform the search anyway but it is still wise to state your objections. It may stop the search or it may help you in court after the fact. Do not physically try to stop a search.

Fourth, It is a good idea to ask for a lawyer even if you are not yet under arrest. If you are arrested call that lawyer up as soon as possible. There is a reason you need to have that number handy, you do not want to deal with this alone. You will need help. As with all things in the hobby do your homework on this early and often.

Fifth, Find out if you are being detained. A simple way to do this is ask if you are free to go. If you are free to go, go.

This four part video explains it better then I can on how to handle a police encounter better then I did:

http://www.youtube.com/watch?v=gmrbNLt7Om8

http://www.youtube.com/watch?v=CKPutNg88bA

http://www.youtube.com/watch?v=REJ2RsLp1Kk

http://www.youtube.com/watch?v=mUv3A4hscc0

I found this video useful as well:

http://www.youtube.com/watch?v=yqMjMPlXzdA

I am not a lawyer. I am not an expert on Nevada law. I am just posting this as I know of too many good people in this hobby that mishandled a police encounter and things didn't go well for them. Please screen and please study and know the laws of your state and your rights. Please protect yourself by doing your own homework.

P.S. The LE check is pure BS and cops do not have to identify themselves.  And if nothing else remember to use your right to remain silent. You do not have to answer the cops questions and in fact it is best you don't.

One thing I would add:

The Supreme Court has ruled that LE is at liberty to hold you until they have satisfactorily determined who you are.  Therefore, you do have to give your name and address, and in most jurisdictions, you have to have an ID on you that verifies that information, and show it when asked.

(still not a lawyer)

That's not true.  You only have to have an ID if you are operating a motor vehicle.  If a cop walks up to you on the street and asks for an ID you don't not have to show it you can say you left it at home.  If he asks you for your name, you are supposed to tell him.  But and ID is only required to be presented if you are driving.

As far as holding someone...that's called a Terry Stop and anyone interested can read up on that.

While you can not be charged for an offense per se, SCOTUS did rule that you can be held (indefinitely?) until they are able to determine who you are, which is pretty much just as bad as being arrested, and perhaps worse.

If any lawyers familiar with the case (~30 years ago?), I'd appreciate being corrected if what I have stated is not correct, but I learned this on this board about 6-7 years ago from a poster who was a lawyer

These cases established that cops can frisk you if they think you may be aimed and you are required to give your name and address if the cops have reasonable suspicion you committed a crime and they may detain you until they do. About half the states have a "Stop and Identify" on their books. My home state is one of them. You are not required to carry ID unless you are operating a car or similar but it will not hurt you to present it to expedite identifying yourself and shorten your detainment in states with "Stop and Identify" laws. Also in some state failure to identify can be used in determining if the officer is going to arrest you. In short Identifying yourself is a smart move but it may or may not be required depending on what state you are in.

END OF MESSAGE

for those of you interested: http://law.justia.com/constitution/us/amendment-04/13-stop-and-frisk.html

Also, it should be pointed out that there is case law holding that in certain jurisdictions/instances you must affirmatively ask for a lawyer. In other words, you must SAY "I want a lawyer before I answer any (further) questions." If you do this, the police must IMMEDIATELY suspend questioning until a lawyer is present; if they do not, the evidence they obtain as a result may be tossed.  

However, if you don't specifically and clearly request an attorney, the police can continue to question you.

Yes the supreme court has made it clear you must state your exercising of your rights. You must state you are exercising your right to remain silent or your silence is admissible. You must state you wish to have a lawyer or the cops may continue to question you without one. You must verbally refuse searches or cops may assume they have consent to do so. You must state you are exercising your rights and you must do so each and every time it is relevant. Some of that makes no sense to me like having to say you wish to remain silent and exercise your fifth amendment rights but you do. Between identifying yourself, asking if you can go and exercising your rights should be the only communication between you and the cops. Anything else can end poorly.

In school it was suggested that it might not withstand a court challenge but it was on the books at the time.  In any case, trying to be a hard ass & refusing to identify yourself is a swift way to be detained.  If you give your identity, Police could come find you (probably would not) if there's a reason to.  Like a dead body found in the hotel you were leaving...  

I'd resist the temptation to be chatty & as soon as possible ask if you are free to go.  Many jurisdictions run every person LE comes in contact with for wants & warrants.  These days, with advanced comminications it's pretty quick.  You come back clean & you are on your way.  As in a traffic stop, LE will not let you leave until the check comes back.  Be patient & STFU.