Don't waste your money on lawyers
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Don't waste your money on lawyers
1–10 of 38 posts
Re: Don't waste your money on lawyers
#2I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful.
The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that you shouldn't...I could go on and on.
$9,000 is a paltry sum relative to the risk that was averted by having a professional get things done right. Yes, by all means, read up on the sites linked in the OP and exercise due diligence in understanding what you're getting yourself into, but find other places to cut your budget. Don't skimp on having good legal and good accounting. These people pay for themselves many times over.
Furthermore, if the OP spent this money prior to having code written, the bad decision was in the order the money was spent, not in the way it was spent.
On a side note, and this is really what I'm expecting the downvotes for: I question the judgement of anyone who finances their operation with credit card debt, especially a relatively small sum like $12K. If you can't save that money over time by getting slim with your personal budget, you are probably in for a world of hurt caused by an upside down balance sheet. Debt is not your friend, despite what "sophisticated" people tell you.
Re: Don't waste your money on lawyers
#3I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful. The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that…
In the US, how is "adopting the wrong corporate form" a terrible mistake? Your realistic choices are LLC, S, and C corporation, and the only thing you're likely to do wrong here is spend the extra time, money, and heartache setting up a C.
You should engage a lawyer for transactional work like contract review, of course. But I don't read this article as an argument for not having contracts reviewed. Rather, it's an argument for keeping your legal overhead transactional, rather than integrating a lawyer into the early planning stages of your business.
I think your comment is a bit hyperbolic.
Re: Don't waste your money on lawyers
#4I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful. The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that…
Perhaps I'm missing something (I've never lived in lawsuit happy US), but I've relied on basic human decency all my life and it has turned out fine for me.
I think there is a time for lawyers, but it's not when you are building your first prototype. You just can't afford to throw money at problems that don't exist yet.
Re: Don't waste your money on lawyers
#5Also, don't ever ask lawyers if there's any liability in your interface. I once had a lawyer loving client who wanted to create a social site, he consulted with his lawyer and he came back to us asking that every single piece of the interface where you could share information should have a disclaimer.
So under every comment box, every I like it button, every photo upload there's a "I hereby grant permission to share my opinion with this site. View privacy policy".
Re: Don't waste your money on lawyers
#6I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful. The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that…
I think the point of the article is "In order to use your financial and legal counsel less, you're going to have to self-educate."
Note that the author says to use professional services less, but does not say to completely eliminate them. The more you can learn yourself, the less "research" your lawyer has to do, saving you money.
Re: Don't waste your money on lawyers
#7I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful. The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that…
In the US, how is "adopting the wrong corporate form" a terrible mistake? Your realistic choices are LLC, S, and C corporation, and the only thing you're likely to do wrong here is spend the extra time, money, and heartache setting up a C. You should engage a lawyer for transactional work like contract review, of course. But I don't read this article as an argument for not having contracts reviewed. Rather, it's an a…
Maybe it is hyperbolic; it's probably obvious that the OP has me pretty agitated.
I won't go into detail unless it's requested, but choosing the wrong corporate form cost my business a multiple of the $9K sum the OP mentions in taxes and legal fees arising from the lack of protection afforded by the right form (which was for us an S corp). If we'd done it right in the first place by shelling out the money to a good attorney, we've have saved some scratch and more importantly, time.
Bottom line, this advice is just really dangerous. The pennies saved by not consulting an attorney or by self-researching can end up being very costly, and the worst part is that you don't know what that cost is until you find yourself with a big tax bill or a liability you didn't forsee when you were trying to play lawyer.
I may be committing the sin of taking my own experience and making a rule out of it. Having been through some nastiness that could have been avoided by paying for good legal counsel makes me twitchy about this issue.
Re: Don't waste your money on lawyers
#8Earlier quoted context omitted.
In the US, how is "adopting the wrong corporate form" a terrible mistake? Your realistic choices are LLC, S, and C corporation, and the only thing you're likely to do wrong here is spend the extra time, money, and heartache setting up a C. You should engage a lawyer for transactional work like contract review, of course. But I don't read this article as an argument for not having contracts reviewed. Rather, it's an a…
Maybe it is hyperbolic; it's probably obvious that the OP has me pretty agitated. I won't go into detail unless it's requested, but choosing the wrong corporate form cost my business a multiple of the $9K sum the OP mentions in taxes and legal fees arising from the lack of protection afforded by the right form (which was for us an S corp). If we'd done it right in the first place by shelling out the money to a good a…
Protection from what? Liability to customers, business partners, and people affected by your business? Or liability to company members with equity claims?
I'd like to know more about what kind of legal threat an S corp is specifically better at protecting you against. Were you a C corp before, and had a company officer problem?
You mentioned taxes. Taxes are a huge difference between company structures. But you don't need a lawyer to sort that out; you need an accountant. And you probably don't need the accountant until you have significant or prolonged revenue. Either way, the tax problem with company structures is one that every freelancer has to deal with, and most of them don't spend $9k on legal fees to work it out.
[Edit]: Part of this conversation has gone offline into email, and without putting it on HN, I'll reiterate: get client/customer/partner contracts reviewed. Nobody should argue that you should skimp on contract review.
Re: Don't waste your money on lawyers
#9I'm cringing in anticipation of the downvoting, but I can't help myself here: this is TERRIBLE advice. Absolutely egregiously awful. The consultation of a good (that qualifier is important) attorney is worth every single penny. He/she will save you from making terrible mistakes like adopting the wrong corporate form, creating contracts that don't protect you and expose you to liability, signing off on contracts that…
Perhaps I'm missing something (I've never lived in lawsuit happy US), but I've relied on basic human decency all my life and it has turned out fine for me. I think there is a time for lawyers, but it's not when you are building your first prototype. You just can't afford to throw money at problems that don't exist yet.
"basic human decency" is so 20th century (at least here in U.S.).
...not that 99.9% of people cannot be relied on to be such - but that when you expose yourself (as the internet does) to the other 0.1% you are exposing yourself to thousands of less-than-decent folks.
Re: Don't waste your money on lawyers
#10It is like saying that it is a waste of money to hire an electrician to rewire your house. There is enough free information on the internet.
Is there? Sure. But your lack of experience and knowledge on the topic could still lead you to electrocuting yourself. Similarly, so could hiring a bad electrician. But the safer bet is with the man whose trade is in working with electric and wiring.
And when financial liability, your livelihood, and matters of the law are on the line, the safer bet is with the man whose trade is in the law.