We live in a world where we are encouraged to “Do it Yourself”. Everything from filing our taxes to web design is sold to us as something we can do on our own if we just find the right instructions and follow them assiduously. Legal work is no exception. However, the potential pitfalls when “Do it Yourself Legal” goes wrong can be very serious indeed.
Three cautionary tales and a disaster averted
Recently, I had three clients who asked me to fix mistakes that they made and one who I saved from a potential mess by convincing him not to “Do it himself Legal”… or taking responsibility for cleaning up the mistakes afterwards.
1. Client A asked me to help him file for a trademark. I quoted him a price, but he decided to “do it himself legal”. Six months later he requested that I fix his trademark application that had been rejected by the US Patent and Trademark Office.
2. Client B requested a Partnership Agreement for himself and his partner. I asked him if he needed help forming the entity. He wanted to form a Limited Liability Company (“LLC”) and he really needed an Operating Agreement. He declined, choosing “Do it Yourself Legal”, and formed a Corporation instead. In the short-term, he saved my fee, but the result was he had to dissolve the corporation and start all over again when he found he formed the wrong type of entity. It cost him more to untangle the mess than he would have paid at the beginning, and it delayed his business from opening its doors.
3. Client C called me after filing her State Annual Report by herself (another “Do it Yourself Legal” job). Her company owed $75,000 in state taxes. How could I help her? It turns out that state has an alternative way of assessing taxes. What did she owe in the end? $800. What did my advice cost her company? $500. As they say, “You do the math!” on the Return on Investment (ROI).
4. Client D called me as he was hiring his first employee. “Could I just buy an Employment Agreement online and use that?” He asked me. I asked him a few questions and it was clear that he needed a seasoned professional. (Note: online legal forms do not substitute for a qualified lawyer). The online form would have been a disaster for my client.
Moral of the Story: When you are managing a business and filling out a governmental form (Trademark, taxes, creating an entity) or signing a contract, there can be a lot at stake. A mistake can be costly. In all these cases a call to a lawyer prevented serious financial damage and, in each instance, the legal fees were below $1000 (and in some a fraction of that). So, call a qualified, experienced lawyer and leave the “Do it Yourself” to your hobbies.