The Internet Does Not Make a Good Business Attorney
Entrepreneurs are smart people. They create new and exciting business concepts and work tirelessly to bring these concepts to market and reap the rewards.
Sometimes, though, entrepreneurs are too smart, so smart that they become foolish. They become foolish when the eschew the advice of professional advisors under the guise of cost-savings, and no advisor is seen more often that not as a commodity more than the business attorney.
Why do many entrepreneurs see a business attorney as superfluous to their success? Well, it’s simple: attorneys cost a lot of money (they think) and all they do is replace some names in forms on their computer and charge me a lot of money for those forms. So, the entrepreneur asks, “why can’t I just go get the forms off the internet and use the money I would have paid an attorney for my business?”
Unfortunately, such an attitude is short-sighted and is a recipe for business failure. Failure to create a good team of advisors and instead taking the DIY (do it yourself) approach increases the business’ chance of failure exponentially. Here’s why:
1. Documents Downloaded From the Internet May Not Comply With Your State’s Law: every state has its own set of laws, and each state’s laws dictate differences in organizational documents, standard contracts, and the like. For example, the time required for notice of a shareholder’s meeting under California law might be different than the time required under Minnesota law. Use of documents acceptable in one state may not mean that those documents are acceptable in another, and if they are not, the business owner is going to have problems.
2. Some Documents Might Not Be Appropriate for Your Business: Many secretaries of state have a form of articles of incorporation (for a corporation) or articles of organization (for a limited liability company). These forms typically provide for the bare minimum to form the desired entity type; many state statutes (including Minnesota’s) have “opt-in” and “opt-out” provisions which must be addressed in the articles in order to avoid the default provision; an attorney takes these things into account when drafting your organizational documents; the internet likely does not.
3. Lack of Contextual Advice: Even if you’re successful in finding a set of appropriate documents, how will you know what they mean? It’s an attorney’s job to answer questions about certain terms and provisions of the organizational documents he or she drafts; maybe the internet has an answer or too (on, for instance, the Yahoo Answers page), but how do you know if it’s right and who do you hold responsible if the answer is wrong?
Do attorneys cost money? Yes, but we also provide value for that cost, and often times retention of an attorney up front can actually save a business owner money in the long run.