We live in a Do-It-Yourself society, especially now that the secrets of the universe can be unveiled with a simple google search. If you can learn how to build a bomb or do brain surgery on the Internet, surely you can figure out your own legal advice. So, one of the most common questions I hear is: Can’t I just download a form (or use an online service like Legal Zoom), instead of paying for a real live lawyer?
It’s a good question. And, being a life-long “Do-It-Yourself-er,” I understand the appeal. But there are lots of reasons why this is a really bad idea . . .
1) The Short Answer: Would you really attempt brain surgery based on what you read online? No of course not — at least not on someone you cared about! And while drafting legal documents is not quite the same as brain surgery (and usually won’t have a life or death impact), it is similarly difficult to do well without lots of specialized training and experience. Here’s why:
2) You Can’t Really Tell Good From Bad (And Why It Matters): When a non-lawyer downloads a legal document he has no way to determine its quality. I’ve found many “legal” documents on the web that clearly were not drafted by lawyers (this is especially true in the world of web developer and artist agreements). Even if you download from a supposedly reputable site, like Nolo.com or Legal Zoom, there is a wide range of quality in the documents available. Without legal training, you have no basis for determining best, worst or mediocre.
Why does it matter? Read more
Ok, so you’re ready to start-up your business — either online, home based, or (the old-fashioned way) in a brick-and-mortar building. What do you need to do to make sure you’re operating legally? Here is a checklist of some essential first steps:
√ Get a Business License
Contact your local government to find out what sort of license is required for the type of business you plan to open. Most cities and counties now have websites where you can download the application forms, as well as get further information. Don’t make the mistake of thinking that just because you have a home business you don’t need a license — most cities will require one and can impose penalties if you fail to get a license or you wait until after you’ve already been doing business for a while. Some local governments even have arrangements with state tax authorities to check returns for home-based business income generated by unlicensed businesses.
Also, check to make sure your business complies with local zoning requirements, especially if you are operating from your home. Finally, make sure you have the permits necessary for your particular type of business operation (e.g., food preparation, liquor sales, daycare, etc.). Again, you can get this information from your city or county website, or by contacting your local government office or town hall. Read more
I first got the idea for this blog when I met a couple (let’s call them Bob and Mary) who wanted advice on how to form a limited liability company. Or, at least I thought they were a couple. Turns out they were just a man and a woman who wanted to go into business together. Or, at least it seemed like they wanted to be in business. Because after 20 minutes of conversation about corporate formation and filing fees, it became clear that these people had no intention of sharing profits, decision-making, liabilities or any other aspect of running a business together — except, maybe, some marketing. They were each independent business people with stand- alone companies they were seeking to expand. They just hadn’t realized it yet. Needless to say, they didn’t incorporate. But if left to their own devices with a corporate formation website, or with a lawyer who would mechanically fill out a form, they might now be stuck in an LLC that made no sense.
Bob and Mary are great examples of the sort of people who benefit most from talking to a lawyer at the start of setting up a business. And not just a lawyer who drafts documents, but one who listens closely and asks questions to find out what they really need and want. Which led me to think about the different roles a lawyer can play, and how the lawyer-as-mentor is a model I like. Which in turn led me to this blog (see. . . there’s a path here somewhere). In a way, it’s about helping business owners create the perfect agreement — with partners, suppliers, lenders, customers, and even a legal advisor — to meet their business needs. So, in future posts I hope to talk more about when and why a lawyer can help, how a business owner can choose the right one and how to get the most out of that relationship. I’ll also include some practical business law tips and links. By doing this, I hope to help some other Bob or Mary get their business moving in the right (legal) direction.