The expertise that an attorney can bring to a business comes at a cost that not all entrepreneurs can afford, which leaves many aspiring business owners asking, “Do I need a lawyer to start my small business?” Below, I outline some of the benefits of consulting a lawyer to get your business up and running.
Save your money and avoid sites online legal websites:
Starting a business usually involves dealing with complicated legal forms. Online legal platforms that offer flat rates for generic documents are often times overly complicated, while leaving their customers wondering if they ever even filled out the document correctly, and don’t take my word for it go check out some reviews.
Essentially, these online platforms use expensive marketing techniques that trick customers into paying hundreds or thousands of dollars to do all of the work themselves. They bury in complicated terms and conditions, so they become extremely difficult to cancel, while their platforms fail to offer any legal guidance or accuracy guarantees. Not to mention these sites are more expensive than doing it yourself and they give you much less than hiring a lawyer and assuring that the job was done right. So, what I say to entrepreneurs is – you deserve better than that!
There are some situations where a lawyer is not likely needed. Whether it be representing yourself in small claims court or responding to a subpoena to be a witness in a case that you are not a party to. In these limited circumstances you’re likely okay going it alone. However, for more complicated matters it’s important to hire lawyer. Typically, undoing mistakes made with “do it yourself” online ‘legal services’ can cost you and your business significantly, as opposed to just using a lawyer the first time around. Also, these platforms use fill in the blank legal documents that can open your business up to legal exposure down the road and can put you in a situation where you are on your own when things don’t work out. Hiring the services of a lawyer gives you an actual legal professional who is devoted to making sure your businesses affairs are in order. Moreover, the real value of a lawyer at the incorporation stage is not just in preparing the actual documents, but in helping you figure out what you need such as an LLC vs. corporation, or what sort of vesting schedule makes sense, and so on. Online legal form providers don't always do it right. Businesses aren't one-size-fits-all, so blanket legal documents don't always work.
Things you should keep in mind when considering a startup:
There are two professionals every small business will need early on – an accountant and a lawyer. Hiring an accountant has its obvious reasons, a startup will need assistance in setting up things like "chart of accounts," and review the numbers periodically, while preparing all of necessary federal, state and local tax returns.
The reasons for hiring a lawyer may not be so apparent. A good lawyer will provide vital assistance in almost every aspect of your business, some of the most common reasons a startup will need a lawyer are:
• Name Availability Assessment
• Business Entity Strategy & Formation
• Business Licenses & Permits
• Acquisition of Employer Documents (EIN & EDD Registration)
• Corporate Documents (Operating Agreements & Bylaws)
• Employee & Contractor Agreements
• Private Stock Issuance and SEC Compliance
• Business Policies & Procedures
• Intellectual Property Assessment
• Copyright and Trademark Protection
• Licensing Agreements
All of this will enable you to focus on other aspects of the business, so you don't have to spend time learning the legal processes. Lawyers can also add value in the obvious ways, such as helping to avoid early mistakes, like not having the company’s independent contractors sign sperate service agreements limiting liability. But more importantly, a lawyer on the early team can contribute to a thriving company culture by asking the right questions at the right times, providing perspective on crucial transactions, and getting smart fast on issues where the rest of the team lacks expertise.
It’s been said that America's judicial system is a lot like a Roach Motel – it's easy to get into court, but very difficult to get out once you've been “trapped.” Even lawyers understand that nobody likes to pay attorneys' fees for anything, or let alone even want to deal with lawyers, but the fee a lawyer will charge to keep you out of trouble is only a small fraction of the fee a lawyer will charge you once you’ve gotten into trouble.
How much will it cost to incorporate your new start-up?
The most common way to keep legal costs manageable is establishing a fixed flat fee for the services. After discussing the scope of the legal services required, a lawyer at our firm will typically estimate the total hours necessary to complete the project, multiply that by their hourly rate, and establish the flat fee. A flat fee fixes the amount that a project will cost and will not be exceeded. However, flat fee agreements are not a one size fits all approach and depending on the size and complexity of the matter hourly billing may be more appropriate. No matter the issue, give Aaron a call personally at (314) 808-4696 with all of your business questions or concerns.