As most of us in Utah know, Utahns tend to be fairly frugal. When something can be done oneself, why hire someone else to do it for you? And it is this attitude (which I admire by the way) that results in a lot of professionals – or service providers in general as opposed to those selling products – to struggle for business in Utah. For example, my uncle is a Harvard business grad and has worked for more than 25 years as a consultant for high power global companies all over the world. But recently he spent a few years in Utah trying to build a consulting business for the little guy. He wanted to work with small business owners and executives at small to mid-sized companies, but he found that they did not want him. Why would they hire him when they could go to the bookstore and get all the advice they needed? Or so they thought, anyway. So when I told this uncle of my plans to start a law firm in Utah for counseling small businesses, one of his first pieces of advice was to warn me of the difficulty in communicating to small businesses in Utah the value that a professional could bring them. So that’s what I will attempt to do in this post – communicate some of the value that an attorney brings to the table as opposed to DIY.
1) What are you actually buying? – A common misconception is that when someone goes to a lawyer to help form their business, for example, all they are buying is the completed forms. And if that’s the case, why not download your own form and do it yourself? (BTW, LegalZoom will charge you for these forms, but you can get them for free from your state government’s website and even many lawyers’ websites.) But the truth is, most lawyers won’t let you come in and just say, “I need you to form a corporation for me.” Because he is not a fast food restaurant where you can just order anything you like no matter how bad it is for you. The lawyer will take the time to find out about your business, you, your partners, what your future plans are, etc. And based on this information he will make a recommendation on what entity you should use. He has spent countless hours researching and learning about which entities are best in which circumstances. He will know better than you which entity will serve you best.
So what are you buying? Not a filled in form. You are buying the years of experience and knowledge the attorney applies to your situation so that you know which form you need. In fact, attorneys understand this so well that, to save you money, they will often only charge you for the advice and will give you the form for free in the end to fill out yourself and send in. Don’t you think that an attorney’s knowledge of the law and extensive experience will serve you better than a blog post you find on the internet? Not only will his advice be tailored to you specifically, but it will be reliable and completely thorough.
2) The unintended consequences – Keeping in line with the above hypothetical client who walks into a lawyers office “knowing” exactly what he needs, what would happen if that client hadn’t visited the attorney, but had simply formed his corporation on his own? Well the problems will all arise from the all too common deficiency of him not knowing what he doesn’t know. It is common for people to see an entity such as a corporation as existing purely for tax reasons, or maybe for the limited liability. But what they don’t realize, is that there is a lot more to it. Corporations, for example, can be very complicated and involved to set up and especially to maintain. And if they are not set up or maintained properly, not only may there be a loss of the limited liability, but the whole company may collapse under the weight of any disagreement within the company.
Attorneys have countless stories of new clients walking in the door for help because they set up their company on their own and something happened that they did not expect, and wouldn’t have known what to do about if they had expected it. The bottom line is that most non-lawyers will not know enough about the law in order to anticipate all the potential consequences of taking certain legal actions, even something as seemingly simple as setting up a company.
3) Time is valuable – And no, I am not talking about the attorney’s time. I am talking about yours. Starting, maintaining, and growing a small business is extremely time-consuming. People do not start their own businesses because they want to work less. More often than not they end up working more. And if it takes all the time that you have to market your products, build relationships with clients/customers, produce the goods ordered from you, ship the goods ordered form you, fix your equipment, do payroll, explore new markets for your goods, design new lines of your goods for the coming holiday season, research new trends in your industry, and everything else involved with running a business, why would you want to put all that on hold to spend the mountains of time it would take to become even slightly versed in the relevant law necessary to draft an independent contractor agreement for the guy who’s coming on to help you with your shipping? Any time you take away from the other tasks to research the law will only stunt the growth of the company because you are not doing what’s necessary to grow it.
This is where professionals in all sorts of fields really shine. They are able to help you with your burden by allowing you to spend your time growing your company, while they quickly give you the advice it would have taken you months to figure out for yourself. Sure you have to pay a little up front for their services, but you save mountains of time. And which is more valuable in the long run? You can make more money if you work hard, but you can never get your time back once it has passed.
4) Malpractice Insurance – When a business owner downloads a legal document from the internet and uses it, there is no protection. Even LegalZoom, in the disclaimer I showed you in the picture above, ensures that they make no promises as to the legal effectiveness of their products and thus cannot be relied upon to help out if something goes wrong. But attorneys have malpractice insurance, so even though there is a possibility of an attorney making a mistake, there is insurance which can help you make up for any loss you might have suffered as a result. This doesn’t have anything to do with the services provided, but it is a safety net that is nice to know about.
So the next time you need some legal work done. Try to remember the attorney’s profession is not one of producing paperwork, it is a valuable resource of knowledge and advice that can save you time and money in the long run.