Do You Need a Lawyer For Your Business Right Now?

My answer to this question depends on your level of comfort with whatever you’re facing and your ability to read/comprehend/apply knowledge from laws/statutes, books, and other materials.

Nearly every entrepreneur struggles with the question of when to get a lawyer – after all, one of the main reasons you started a business was to make money, not spend it on legal paperwork and lawyer's fees!

We live in a country where, theoretically, you can handle many of your legal needs without a lawyer. No one will arrest you for drafting your own contract or fine you for filing your own trademark application. Anybody can draft and submit incorporation documents with the relevant Secretary of State. In fact, through the genius of Google, you can find out much of what you need to know just by asking the Internet. Who hasn't googled "[insert relevant word here] contract," changed the party names, and used that contract for their own purposes?

Yes, the Internet is incredibly helpful. But, if you don’t have the proper legal knowledge and understanding of those terms from your googled contract, the consequences can be dire for you and your business. Sure, the basic terms and the title sound good, but the devil is always in the details!

Think of it this way: you know how to brush our teeth, but unless you also have D.D.S. behind your name, I’m not going to trust you to put a filling in my mouth or yank out my wisdom teeth!

I struggled with something like this early on with my first company. Of course, I didn't have the "lawyer" question (ha!), but I had others. I didn't think I could afford a web designer, so I learned as much as possible with the help of several books and Google. I put together a pretty impressive website, but I had no idea how to make is secure; frankly, I hadn't even thought about it. Only a few months after the site launched, I was burned by hackers and my site was destroyed (RIP, 21stlaw.com). What looked good on the outside was completely vulnerable to outsiders. I ended up having to pay a web designer anyway to save the site. I had acquired some good knowledge along the way, but I hadn't thought about those very important details.

The same rationale applies to hiring a lawyer. You may be able to acquire basic knowledge online, but the really important stuff requires much more depth and training. Maybe you can get all of this yourself through NOLO, sba.gov, or Entrepreneur Magazine, maybe you can't. Are you willing to bet the future of your business on it?

The tricky part here is knowing the many rules, regulations and nuances that go along with starting a business. This is how Warren Buffett, one of the richest billionaires on the planet, pays a lower tax rate than his secretary. He has a team of very knowledgeable lawyers and tax professionals assisting him with his business ventures.

But, you say, I'm not Warren Buffett! I'm broke (or driving reeeeeal close to 123 Broke Street)! I certainly get that. Here are some steps you can take that shouldn't be as hard on your bank account:

  1. Work with a consultant first. Consultants can help you figure out the basic steps you need to take to get your business off the ground. The cost should be lower than attorneys fees, you'll get guidance about where you need to go next, and you can always hire a lawyer later. Some things may not be as complicated as you thought, and perhaps you can handle those on your own!
  2. Gather research. Reach out to lawyers who work with small businesses and collect information about fees, areas of expertise, etc. Figure out who you like best, who has fees you can live with, and who can handle the various types of work you need without bringing in more people and racking up more costs. You can identify what things you need help with now, and save up to pay for them when it becomes necessary. Just because you talk to a lawyer doesn't mean you have to hire them on the spot.
  3. Ask about "unbundled legal services." With this type of arrangement, a lawyer will offer a limited scope of representation, usually at a lower price, and leave other responsibilities to you, the client. Rules on this vary by state, but these types of services can help you save money. If you have some level of familiarity, this might be a good option.
  4. Ask for a DIY Review. Some lawyers will review your DIY efforts for much less $$ than if they drafted it from scratch. So, if you want to pull that contract off of Docstoc and make some changes, some lawyers will read it, tell you where you went wrong, and maybe even help you fix it.

I hope these suggestions help. I completely believe that you can learn anything with the right methods. But, a better question is should you? Where is your time best spent - learning about copyright rules, contract clauses, and corporate structures, or doing the things you created your business for in the first place?

Have you been wondering about the best time to hire a lawyer, or wished you had hired one earlier? Please leave me a comment and let me know what you're curious about!

With gratitude,

Shontavia