Any business owner knows the high cost associated with legal services. Even filling out simple forms can be an expensive task. Fortunately, many new online legal companies are providing services that previously required expensive hourly rates from lawyers. See the following article from The Street for more on this.
No matter how great they are at multitasking, few owners can run their businesses completely solo. Almost every owner eventually has had to call in a professional to handle tasks outside his or her area of expertise, whether it’s an accountant to sign off on tax returns, a computer tech to refresh a dated website or a plumber to fix a leaky bathroom sink.
For decades, paying for legal advice has been one of those impossible-to-avoid expenditures. If you wanted to run a reputable, aboveboard business, you had no choice but to hire a lawyer to draw up the necessary documents and contracts.
But little by little lawyers have been losing their monopoly over the paperwork involved in opening a business. As do-it-yourself legal contracts become more widespread and lawyers face an ever-tightening job market, small-business owners should reap the benefits of more affordable legal services.
Certain business documents follow a set format and are easy to customize — so why do you need a J.D. to fill them out? That’s the idea behind the company LegalZoom, which sells a variety of business-related documents online. Forms that would have once taken hours of a lawyer’s time to draw up and discuss can now be printed out from your office computer.
Forms available through LegalZoom include articles of incorporation, applications for state tax ID numbers and partnership agreements. The company also offers other specialized services, such as trademark searches or a customized business license compliance report, which gathers the license applications necessary for your business to operate legally in your state.
While legal documents follow strict formats, making them easy to reproduce, other legal services aren’t so easy to replicate online. Say you want to know how to terminate an employee without opening yourself up to a lawsuit or need advice on fighting a potential copyright infringement. You can post your question online, but will you get reliable information back?
Understandably, few owners are willing to risk the future of their business on tips they gather online. Not to mention the fact that state laws vary, so what works in Florida might not be an option in Minnesota.
But a new website called LawPivot — operating only in California for the moment — may be changing the equation. (Another bonus for West Coast startups: For now, they can ask questions for free.) Its goal is to be an online marketplace for legal advice, matching attorneys with small companies looking for answers. The idea is promising enough that LawPivot got funding from Google recently.
LawPivot recommends specific lawyers in its network to answer each request based on their expertise (you can also choose a particular lawyer after browsing online profiles). Lawyers respond directly via email; for confidentiality reasons, answers are not posted to the site.
The fact that reputable attorneys are willing to hand out free advice online — rather than charging for their time in 15-minute increments — may be a sign times are tough in the legal profession. According the LawPivot execs, lawyers who participate consider it a form of marketing: Answer a basic question well, and it may lead to an ongoing (paying) relationship with a company they’ve advised.
With few companies being formed or new ones growing these days, law firms catering to the business market are hustling for work. That’s good news for small-business owners. If you foresee significant legal issues in your future, you find yourself in a stronger than usual position when it comes to negotiating a law firm’s hourly rate. You may also find more attorneys willing to work on a flat-fee-per-service model, so you can predict upfront what your costs will be.
Just remember that getting the right guidance from a qualified expert isn’t a luxury — it’s a necessity. When it comes to the law, you don’t want to wing it.
This article has been republished from The Street. You can also view this article at The Street, a site covering financial news, commentary, analysis, ratings, business and investment content.