Hiring an attorney can be expensive, with hourly rates typically starting around $250. But until recently, if you needed legal assistance, you didn’t have much of a choice. Now, however, thanks to the Internet, there are several good sites dedicated to helping small business owners tackle seemingly thorny issues such as business formation, employment agreements and contracts, and the protection of intellectual property or inventions for a fraction of the cost.
As the Small Business Administration explains in its online Small Business Planner, “Not all legal matters require a lawyer, but they do require understanding. Sometimes the best way to protect yourself and your business is to know where to go for assistance.”
Online Legal Assistance
Three of the best sites that offer a variety of legal assistance are Nolo, LegalZoom and FindLaw. Created by attorneys for use by laymen, these sites provide lots of good (and often free) information and let small business owners create, fill out and/or file a variety of business-related documents from the comfort of their computers. They can also help you find an attorney if and when you need one.
“We had attorneys research a variety of documents that can be used in all 50 states and how those documents need to be processed and filed in accordance with each state’s laws,” says Chas Rampenthal, general counsel and vice president of product development at LegalZoom. “We’ve simplified that information so that individuals can read and understand it. Sites like ours help you cut right to the chase.”
Incorporate or Form an LLC?
Before you rush to check out these legal assistance sites, you first need to “identify the legal issue that you’re trying to resolve,” says Richard Stim, a practicing attorney, an editor at Nolo and a co-author of Whoops! I’m in Business: A Crash Course in Business Basics. For example, “When forming a business [deciding whether it should be a sole proprietorship, partnership, limited liability company (LLC) or corporation], you don’t really need an attorney,” he says. You can find the information and forms you need online, and there are even third-party sites (including the ones mentioned here) that will, for a fee, set up a corporation or LLC for you.
Laurie Cantus, the founder and owner of Go2Girls, recently helped a small business client of hers convert to an LLC using an online service called Your Entity Solution. “Their Web site is not impressive, but their service is amazing,” she says. “They basically help you do everything: file papers for you [according to the laws of your state] and then send you everything wrapped in a nice brown embossed folder, complete with share certificates. The company made everything easy.” Your Entity Solution also provided Cantus with good phone and e-mail support.
Protecting Your Intellectual Property
Protecting your business ideas, inventions, company name and logo is another area where you don’t necessarily need to hire an attorney. You can get lots of good, free information and more by visiting Nolo, LegalZoom or the Web sites of the United States Copyright Office and the United States Patent and Trademark Office.
“Once you’ve read a little bit, you can decide whether or not you need an attorney,” says Stim. “You probably don’t need one to register your name as a trademark. But if you run into a problem with the registration, then you’ll probably need to bring in someone. With copyrights, generally you don’t need an attorney to take care of the registration or to protect them. You just need a little knowledge about the way they work,” he says. However, “you will probably need a lawyer if you create something patentable, like an invention or a new business method.”
Contracts, Agreements and Forms
The third area Stim identifies as ripe for the do-it-your-selfer is contracts. “Most business owners really want to get a form agreement and use it over and over,” he says. So where do you get a reliable, customizable agreement or contract? “There are a wide range of agreements out there,” says Stim, but he cautions against buying form agreements that don’t explain each provision.
“If you’re going to buy form agreements, buy ones that have explanations,” he says. “Also look for ones that have been reviewed, just like when you buy something on Amazon you read the reviews first.” You’ll find reliable form agreements on many sites including Nolo, LegalZoom and U.S. Legal Forms, which provides thousands of state-specific legal forms. Trade associations are another great resource.
As always, a little knowledge goes a long way. Before you download a contract, “you want to start by reading a little about the basics of contracts,” says Stim. “For example, a lot of people aren’t aware that you can enter into an agreement electronically, no paper required.”
If or When You Need an Attorney
“As an attorney, I don’t believe that a Web site can replace me or the training I’ve had,” says LegalZoom’s Rampenthal. “But at LegalZoom we perform functions that lawyers have typically done in the past, such as filing a document with a state agency or preparing an article of incorporation or the formation certificate of an LLC.” And while an attorney may cost you a few thousand dollars, sites like LegalZoom and Nolo charge only a few hundred dollars for similar services.
Of course, you probably can’t go forever without hiring an attorney, especially if someone sues you — in which case you should get an attorney pronto — but you can go pretty far. The first step is taking a long, hard look at what your issue is and asking yourself, do I need an attorney or can I figure this out myself? Then educate yourself by visiting different legal assistance sites.
When you do decide it’s time to hire an attorney, ask for referrals from other small business owners who have dealt with similar issues. If that is not an option, Nolo, LegalZoom, FindLaw and the American Bar Association offer online attorney directories and referral services. Next, find out how much an initial consultation will cost. Then at the first meeting, ask if you can get a task-oriented or flat rate.
The bottom line: “You should save your attorney dollars for attorney time and legal advice and not waste your dollars getting standard business advice that you might otherwise research and find online,” says Rampenthal.
Jennifer Lonoff Schiff writes about business and technology and contributes to SmallBusinessComputing.com.
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