Skip the lawyer…use LegalZoom!
By: Matt R. on August 3rd, 2008
Categories: Legal Stuff, Phase 1:The Implementation, Recommended Services, Starting a Business
A while back I was thinking it would be smart to consult with a lawyer to see what kind of things need to be done to set-up my business and trademark my business name. I was pretty sure, at the least, that I’d need to file for trademark protection for my company name and file a DBA (Doing Business As) which will allow me to start a bank account under the name of my business.
So I called a local lawyer who specializes in helping small businesses. You’d think that, being someone who is supporting the cause of the small business owner, she’d charge fees that small business start-ups can afford. Boy was I wrong. Here are some of her fees:
$200/hr. - for pretty much anything, filing the DBA, talking to me, doing work for me, I’m surprised she didn’t charge me to ask her how much she charges!
$500 - to do a thorough trademark search to make sure my business name isn’t in use, in any capacity, anywhere in the country. I don’t think this is entirely necessary as I will only be doing business in my local area….for now.
$675 - for her to file my trademark application and my intent to use application. This doesn’t include the filing fee charged by the trademark office which is $325!
Now, I don’t know about you, but I don’t think it makes much business sense to spend over a grand on a lawyer when I don’t expect to make much more than 2K my first year in business. That’s half of my business income going to my lawyer!
So, at this point, I think I’m going to skip the lawyer. At LegalZoom.com I can file my trademark for $159! And they can do a comprehensive US logo search for $249! That’s light years cheaper (in my eyes) than what the lawyer was going to charge. The DBA will be around $154 to file. It would have been at least double that through the lawyer.
Legal zoom makes it clear that it is not a legal firm, but simply a service that assists with submiting legal documents on your behalf. So it goes with out saying that you should tread carefully when using it. They do a VERY good job of leading customers through the necessary steps for filling out a particular form, but, as I found out the hard way, they can miss certain things. I’ll explain more about that in a future post, but I will say that so far, Legal Zoom has been very cooperative and helpful in trying to get the situation rectified.
Now I wonder, with Legal Zoom and the amount of free information on the web, does a small business owner ever need to consult a real-life lawyer?
August 4th, 2008 at 9:25 am
Wow! That is ridiculous. I totally agree with you that you may not need to consult a real lawyer.
There is so much information on the web, that you can find everything you need if you know where to look.
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August 4th, 2008 at 3:22 pm
well congrats on finding a way around the rediculously overpriced lawyer and congrats on the progress you are making as well, it seems things are falling into place nicely so far….
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August 4th, 2008 at 10:56 pm
Matt:
Thanks for the comment on my site. Sorry but I obviously disagree with you. I think Legal Zoom and other document preparation companies serve a purpose with certain people but it doesn’t replace a lawyer in all situations. However, I must laugh at your comment about whether a small business owner ever needs to consult a real-life lawyer. I wonder if people could say the same about overpriced computer support consultants?
But seriously, I wish you the best of luck with your business. In time hopefully you will be so successful it won’t make sense for you to do your own legal work.
Rush
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August 5th, 2008 at 8:04 am
Hi Rush,
Thanks for the comment. I definitely agree with you that LegalZoom and other companies cannot replace a the advice of a “real-life” lawyer. Just as “Computer Diagnostic” software cannot replace a real-life computer tech.
However, being in the VERY early stages of starting my business, and with the very limited seed money I have, I thought I’d give Legal Zoom a shot. Just as I wouldn’t expect someone in my stage of business formation to hire a computer expert to set-up their business computer…that’s something they can figure out on their own with a little bit of research.
But I too hope someday that I will be successful enough to see the value in professional legal advice and assistance.
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August 6th, 2008 at 12:17 am
I know you plan on coming up with all of the money yourself to build and develop you business, but if I were you, I would have gotten a small business loan.
Legal Zoom sounds cool, but I would trust a real life lawyer TONS more.
But just remember, the two statements above are MY OPINION! I admire you for trying your damndest to be self sufficient. That’s a good personality trait to have for an entrepeuner!
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August 6th, 2008 at 12:31 am
Yes Andy, I am trying hard to keep this a fully self-contained project. Mainly because I’m a bit hesitant on how much money I’ll be able to make initially and I’d rather not have a business loan on my shoulders without the confidence of knowing I’ll be making enough money to pay them back.
Same thing with the lawyer. I’d LOVE to consult with a lawyer, but for the simple initial step of filing my business name, I decided it wasn’t quite worth it.
I’m treading lightly, slowly, and carefully right now. I’m going to grow this business slowly and cautiously…which isn’t too entrepreneurial of me…but that’s how I roll! =-)
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April 9th, 2009 at 3:44 am
Matt:
I am a small business lawyer and about 33% of my clients are do it there selfers. They incorporated or did something else with LegalZoom and came to me to fix it. I agree LegalZoom is a great tool if you know what you are doing, but it is not a replacement for real legal advice. I always tell my clients that there are less expensive alternatives out there. I also barter with with my IT guy, my trainer, my chiropractor. They all utilize my services and I use theres. It is a win win….Good luck.
Daniel
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