Legalese is some of the most mind-numbing prose ever invented, imho. It really does drive me batty. However, if you plan on starting a business, or if you already have one and you just haven't added "legal thinking" to your list of 100,000,000 things to do as a legal entity, well, this post is for you!
Why Do It
The worst thing about trying to protect a business, is the lack of assurances that come with the price tag. It is a lot of effort, but it comes with no guarantee. So why bother at all?
Doctors and Lawyers have this odd professional pairing that goes back through time. There is a relevant correlation here, as we all know, just by seeing your doctor when you feel something is wrong, and going to all your scheduled check-ups isn't going to guarantee you anything - you don't get a piece of paper from your doctor promising you are in perfect health. It's the same with legally protecting a business. There is no state of perfection, but the generally accepted practice is, go to your lawyer when you think something is wrong and definitely get a legal check-up for your business.
There are several budget conscious ways to approach legal services for your business. How much legal service a business needs can be a complex question, certainly not anything I can conjecture here, but you want to cover down on the basics, and the best thing I can recommend is a mixture of DIY and working with at least one attorney you can trust (maybe you need a small business attorney, or something more specialized like intellectual property or import/export law, but you should have one attorney in your contacts).
I used to like services like Zoom, Rocket and various legal subscription services, but I have found that their prices have gone up and what you get in return has gone down. Not a fan, just saying.
What I want to cover here, then, is the two methods I think will work when there is a tight budget for legal services. Even if there is NOT a tight budget, the old adage of "a fool and his money are soon parted" applies to the richest of the rich. The two methods I am going to review are 1) Getting folks into your contact roster and 2) Do-It-Yoursel legal services.
Building Basic Contacts
Every business should have a minimum of two people in the contact list. First, you should have an accountant, and second, you should have legal counsel. As accounting is out of scope for this article, we are going to address the latter, but some things depend on your accountant... so let's just cover the salient points that impact the legal discussion in-play:
Your accountant is the person that will recommend whether your business should be an LLC or a Corporation, how you want to handle purchases, sales, business expenses, and what state in which you should incorporate. Those are all big choices, that will then inform your decision regarding an attorney, especially the locations where you are incoroporated and where you are doing business
Finding and retaining an attorney is an important decision (the medical doctor reference still holds). If you are starting a real estate related business, using your friend's attorney who is great at healthcare law, is probably not a fit. Consider the factors in play:
- Your state of incorporation, and, if different, the state where you are doing business
- Your business's line of work and the type of law that impact that line of work
- Are you an internet business, or local retail? Will you be selling internationally?
- Your business's structure
Armed with this outline, you can start going shopping. You can start by pinging your network and getting references, a good reference to an attorney related to your needs is a good starting point. But don't let it be your ending point... get at least 3-5 references, and then go find 3-5 of your own. How to get the non-reference ones? There's multiple ways to do that, but for brevity's sake I will cover one option: the interwebz.
There are no shortness of legal review sites on the web, but one of my favorites is avvo.com. It allows for searches by location, practice areas, and by their overall ratings.
Now, you should be sitting with a list of 6-10 attorneys. Which one to pick? Think about the factors that are important to you and come up with some kind of scoring or report card:
- How much do they charge
- What examples can they share to demonstrate their knowledge for your business
- How approachable are they
- Do they know folks in related practice areas important to you
- Do they work individually or as a team
- Will you be working with them, or their paralegals - if the latter, make sure you talk to the paralegals!
- Do they do ALL the work, or are they OK providing ala carte advisory services and letting you do some things yourself, where applicable, to reduce costs
- Any other questions you think will help you decide
Then, contact each attorney on your list - being sure to ask them the same questions, and make notes of their answers. If they don't want to talk on the phone, schedule an appointment, if they do not offer a free first consultation, decide if they are worth paying for a first consult. I personally have not had much luck with attorneys who charge for their first visit.
This is a lot of work, but when you are done, one of those contacts (or 2 or 3) will hopefully resonate with you. And, you will have likely learned a lot more about the law and how it might impact your business. It's a win-win.
Good 'ole "Do It Yourself." Certainly, I can't advocate DIY law anymore than I would advocate DIY heart surgery; however, if you are willing to read up on things and accept the associated risks, you can accomplish several legal tasks using the power of DIY. Also, if you select an attorney above who can point out specific DIY tasks, then you can save a little coin that way also.
Examples of some DIY tasks that I have had luck handling myself (again, not advised, but necessity is the mother of invention):
- Incorporating: Most states have a "secretary of state" or similar office which allows you to file for creation of your corporation. The website will of course advise you consult an accountant and an attorney, but if you are clear on what entity you want to form, you can do this directly yourself - supplying all the needed docs, which some states make easily available online.
- Registering for Taxes: Most states have an office that handles taxation for businesses. One of the first things you will need, in order to do business, is to get an Electronic Identification Number (EIN) from the IRS, and then use that to register in the state where you have either incorporated and/or are going to be doing business.
- Obtaining Permits: If your business requires permits, you should be able to get those all lined up and squared away without an attorney unless you are doing something complicated.
- Overarching Agreements: Some states will provide boiler plates for Articles of Incorporation, Bylaws, and Operating Agreements - the top level legal documents which define your company, who is in charge, and how it functions in the board room (yes, you have a board now... enjoy that).
- COPYRIGHT WARNING: Although it is tempting to just copy and paste stuff online into your own legal documents, you should be aware: legal documents can be subject to copyright protections just like any other creative works, and you should get permission from the author before using their material in one of your agreements.
Having reached this point, you've just reviewed why boring legal stuff is important, and hopefully received a couple options to help find/select an attorney and, where applicable, pursue some legal tasks yourself. All of this is of course subject to my disclaimer (which applies to this whole website), but basically, I hope you find this information helpful and wish you all the best in your business ventures.
Posted from my blog with SteemPress : https://htd.cloud/2018/09/09/the-boring-legal-stuff/