Legalese with Steve Fireman: Famous Last Words
August 20, 2010 § 2 Comments
(I am pleased to present the first post of the “Legalese” column by ECDI’s President and General Counsel, Steve H. O. Fireman. Steve will be taking over the blogging reins from time to time to weigh in on legal matters that affect entrepreneurs, give counsel, and provide resources. -Evelyn)Famous Last Words: Why Entrepreneurs Think They Don’t Need Legal Counsel
I’ve been around the small business world for a long time, as an entrepreneur myself, as a lawyer advocating for small businesses, and as a part of ECDI’s team of small business development specialists. When you are first starting up a business, a lawyer can seem like an unnecessary expense. In reality, sound legal counsel can save you a lot of money and heartache in the long-term.
The following is a top ten list of reasons entrepreneurs give for not seeking legal counsel as they are starting their business. Sadly, I have consistently heard some form of these reasons out of the real mouths of real people over the years.
- I’m already paying my realtor, and he’s great. Why should a lawyer review my lease?
- My banker said that since my business will start off small, I can just use a personal checking account.
- I don’t have any private assets to protect, so why should I go through the hassle of setting up an LLC? What are they going to take? My cat?
- We don’t need a partnership agreement. My business partner is my best friend and we have agreed to never disagree on anything…ever.
- Eh. I’m not going to worry about taxes until I turn a profit.
- My accountant is a part-time bookkeeper for my mother’s boss and she loves him.
- I am sure my business is legal. Everyone’s doing it!
- My great great grandpa did business with a handshake and he was rich. People are trustworthy. Who needs a buy/sell agreement?
- Operating Agreements? By Laws? Corporate Minutes? Resolutions? Who needs that stuff? That’s just for big corporations.
- With websites like legalzoom.com, I have access to all the legal information I need. I AM my own lawyer!
This type of thinking leads many small business owners into legal minefields, which could result in unnecessary victimization by landlords, dicey disagreements with business partners, not to mention loss of their business. Fortunately there are resources available to the entrepreneur to keep their business legally protected. ECDI business developers can refer you to low or no-cost legal resources. You might also find the following links useful as you’re looking for a lawyer: