In a perfect world, we would all have our legal, tax, and financial professionals at our fingertips any time we needed to make decisions or strategize. But, that’s not the reality for the life of an entrepreneur. We all have budgetary constraints. This is where online legal services come into play. The idea is that you can utilize them while building a business worth protecting and then hire a lawyer later on in the life of your business (as long as you did a good enough job early on protecting your business, of course). But, in the meantime, you can invest in growing your business while also gaining adequate legal protection. Let’s talk about how to use online legal services wisely so that years down the road you have good fundamentals and a well-protected business that your general counsel can work with.
I’m one part lawyer and one part entrepreneur. I started my law firm with a Mac computer and a few thousand dollars, so I get it. But, I’ve also unfortunately seen the ugly side of going too cheap on the legal. The answer is making sure you take ownership of your legal decisions – actually understanding your documents and legal strategy, for instance.
Picking and choosing random documents from online internet searches or even the one-sized-fits-all documents for purchase on cheap online legal websites. The most important thing is that you have a gameplan for how to protect your business. For me, education is the key. You need to have a basic understanding of what’s in your documents, what your strategy is, and some general business law ideas. These are things all business owners come to learn one way or another (the preferred route is not through experiential wisdom).
Best Practices for Using Online Legal
1. Develop a legal gameplan.
2. Take Ownership of Your Legal Strategy and Documents (aka Know what it all says).
One of the problems with the forms on Legalzoom or those built out websites is that they are designed to trick the buyer into thinking that they are customized while they are in fact not (read their fine print, it’s not pretty). Additionally, you are still required to know which documents you need. This makes most people think, Is there anything else that I need? The only way you can really relieve yourself of being your legal department is to hire an attorney. In lieu of that, you need to make sure you do your best to understand what your strategy is, what documents you need, and what they say. It’s not that daunting of a task early on (you might even find it interesting, especially if you like saving money and avoiding disputes!).
While reading contracts can be boring, many agreements can be understood and improved with a little bit of extra focus. Grab a cup of coffee (or evening beverage) and commit to 1 hour. Really focus for an hour on a single contract and see how much better you understand it and how you can improve it. With the help of our Busines Law 101 course and this type of effort, you will surprise yourself with how quickly you will understand most contracts that you are presented with. This will serve you well throughout your business and personal life.
3. Execute It.
After you develop the plan and know the plan, you need to follow through on the plan. This is such an important piece of the puzzle. You have to actually get the documents signed. But, not only that, you need to make sure they are applicable to the transaction it is being used for. Just the other day I had someone who downloaded an nondisclosure agreement – it was for a different state and did not include the right type of information to be enforceable. And, it was never signed. This is why it’s important to take ownership of your legal. You need to be comfortable and confident in modifying agreements so they fit your situation. We’ll also teach you about electronic signatures and what you need to enforce your agreements.
4. Know When to Hire a Lawyer.
This is a judgment call but the more you learn about basic business law concepts, the better informed you are to know when you actually do need a lawyer. Successful businesses will eventually have to hire a lawyer to customize the legal strategy, documents, intellectual property decisions, defend the company, and a host of other legal issues. Most companies, however, don’t need the “mahogany” desk from the outset. Money is better spent on marketing and customer service. At some point you will need a lawyer. If someone sues you, or you have more than 10 employees, or your revenue exceeds $1 million, or you have lots of investors, then you should develop a personal relationship with a lawyer. It’s hard to say exactly when to call a lawyer because each business is unique, but you’ll know when you are swimming a little too far from shore. Until then, do not be afraid to give it a go.
Do Not Use the One-Sized-Fits-All Approach
When I started my law firm, my legal experience was law school (which is less than helpful in real work business contract drafting but does help), employment law, and litigation. But, the reality was that none of my experience had particularly prepared me for drafting an agreement. I know many of the concepts, but in practice, I still had a lot to learn. One thing I’ve learned over the years is that every industry (and business for that matter) is very different, so you have to understand the industry and not use a one-sized-fits-all approach. That’s what separates our Drafted Legal program from other online services. We lay out a game plan based on the industry that can be followed to take the guesswork out of your legal. Then, we equip you with the information you need to survive your first few years.
For most things, it is easy to understand the day to day legal aspects and this is where our courses really equip you with the ability to make better decisions than your competitors. You won’t be a lawyer overnight but you will be equipped with years of know-how in starting businesses and understanding the most common mistakes made.
Our industry-specific gameplans take the guesswork out of the online legal services. No longer do you have to say, what else do I need? We give you an exact gameplan to follow. While it is not tailored to you specifically, it is tailored to your industry. Our gameplan will explain when you need to hire a lawyer and what documents you will need in the meantime. It has everything you need to build a great legal foundation until your business can afford legal fees to protect it. Learn more about our education and template bundles.