Home > business > Legal News Update Begs the Questions: are Universal Legal Forms a Good Investment for a Business Start-up?

Legal News Update Begs the Questions: are Universal Legal Forms a Good Investment for a Business Start-up?

Happy Friday!

The ABAJournal reported today that LegalZoom “has gotten a green light to operate in the United Kingdom as an alternative business structure.”  You can read the entire article here

The ABAJournal also has an interesting extensive article about the value of these alternative legal service providers see that article here

I’ve previously commented on my own views of universal legal forms, and the complications that can arise from using those forms without obtaining legal counsel. You can check out my previous article here . That article highlights a case where an individual used a universal legal form that ultimately did not likely result in her intentions coming to fruition.

Regardless, People Use These Products.

Legal Zoom and others like it encompass a multi-million dollar industry. So people, a large part being small businesses, start-ups and entrepreneurs, are using these products.

Question: Is a minimal investment in these pre-made legal documents a good investment for start-ups?

First, I can understand why an entrepreneur might be drawn to buying such a product.

Entrepreneurs (particularly those involved in small business/start-ups) are more likely to utilize low cost legal forms as opposed to retaining legal counsel. For two reasons:

1. Entrepreneurs are more likely to take risk (e,g, – venturing into a business transaction without legal counsel = RISK);

Lawyers, on the other hand, are in the business of limiting liability for our clients. We are risk averse!

and

2. start-ups lack cash flow.

I have stated in previous posts good reasons for why I believe everyone (whether business, or consumer) should have a lawyer involved whenever a legal documents are undertaken.

At some point, the small business owner needs to make a cost-benefit analysis:

what is the cost of engaging a lawyer, and what is the risk if I do not? Is the risk worth it?

The problem here is that it is hard gauge the risk without seeking legal counsel (catch 22).

It’s no surprise that the legal industry is always considering whether alternative legal fee structures are worth considering. (e.g. – fixed fee v.s. hourly rate). The legal industry needs to make legal services more accessible, since there is an unmet need for legal services.

My exhortation to the start-up business owner: 

get a lawyer referral from a trusted source, and see if the lawyer will work with you regarding alternative fee structures. What could it hurt?

A lawyer who works with start-up businesses and entrepreneurs likely understands your competing business interests.

The lawyer probably also values the relationship with a growing business client that the lawyer can look forward to advising over the course of many years to come.
Thoughts? Questions?

http://www.dwlawpc.com

Jeshua@dwlawpc.com

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: