Business Opportunities Weblog

January 18, 2005 by Dane Carlson | 1 Comment

StartupJournal:

At a recent meeting of a small-business subcommittee of the American Bar Association, attorneys swapped tales of entrepreneurs who were determined to cut legal corners. Common legal mistakes in the early stages, according to Jeff Mitchell, an attorney at LeClair Ryan in Blacksburg, Va., include commingling funds of the corporation with those of the founder or shareholders. Or the new business fails to keep adequate records or maintain corporate formalities, such as formally voting to issue stock.

But the attorneys were particularly vexed by the recent practice of downloading legal document templates from the Internet to, say, incorporate or create employment contracts. One exasperated attorney said that if an entrepreneur retains him from scratch to start a business, he might charge around $2,500 for particular legal work. But if that business owner comes in with something he or she has downloaded and completed, and asks the attorney to “review” it, he’ll probably have to charge $4,000 to $5,000, “unless it’s more,” to make the necessary revisions, he says.

One brave attorney at the meeting displayed sympathy for entrepreneurs who simply want to know what the legal costs are going to be as they proceed. It’s sensible for them to be cautious, she pointed out. “Is there any other service you buy that’s open ended?” she asked the room.

In Legal, Posts | 1 Comment