Don’t Try This at Home

Posted on May 14, 2019 in Planning & Advisors

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Why entrepreneurs shouldn’t do their own legal work.

Women entrepreneurs shoulder many burdens, one of them often being their company’s legal work. They don’t mean to become their own in-house counsel, it just sort of happens. They don’t have an attorney when they start their business and are too busy, daunted and undercapitalized (or so they think) to find one.

But as the extreme sports disclaimers caution, don’t try this at home. Your company’s legal work is one of the last things you should do yourself. If you’ve ever considered serving as your own legal counsel, ask yourself these questions first:

  1. 1. Am I sufficiently objective to negotiate on my own behalf?
    Entrepreneurs can be so keen to get the business–or to work with a particular vendor–they turn a blind eye to the possible downsides of that business relationship. So they gloss over important issues, like payment terms, hoping it’ll all work out, but actually leaving themselves quite vulnerable. Your lawyer serves as an objective pair of eyes for your agreements. And as your advocate, she won’t hesitate to ask you, “Are you sure you want to be so generous in your collections policy?”
  2. 2. Do I have the right background and training?
    Doing your own legal work is like hiring an actuary to develop your strategic marketing plan. It’s the wrong person for the wrong job. Most business owners haven’t had the training to perform legal tasks properly and create more problems than they avoid. Even attorneys know when to specialize and when to refer out or delegate to other specialists.
  3. 3. Is this really the best use of my time?
    If you want your company to grow, remember this: Your company needs you to be out in the world as its public face, not poring over paperwork in the back room. Second, because there’s so much to know about starting and running a business, your energy is best spent leveraging other people’s knowledge. Why should you have to learn about the ins and outs of work-for-hire contract provisions when you can hire someone else to handle it for you?
  4. 4. Can I afford to think small?
    When you’re just starting out, it’s understandable to try sticking to a budget. But women entrepreneurs can be overly cautious about spending money. They may not want to hire an attorney because they’re fixated on the bottom line, rather than seeing the relationship as an investment in their business growth. If you keep telling yourself, “I can’t afford it,” you’ll continue to find yourself in the same situation. Instead, try asking, “How can I find a way to afford it?”
  5. 5. Do you really want to do it all yourself?
    Don’t you have enough on your plate? Growing your company, nurturing your clients, handling administration–and then having to do it all on the home front, too? No one person can know all it takes to build a successful business. And if you look at the great entrepreneurs of our time, they all had help in various forms: other business owners, investors, employees, strategic alliance partners, coaches, outside advisors and supportive family and friends. Can you grow and thrive without your own “Dream Team”?

If your answer to any one of these questions is no, you should find a lawyer to help create a solid legal foundation for your business. Confirm that your lawyer is familiar with businesses of your size and industry and that their fee structure is explained clearly. And make sure you feel truly comfortable with this advisor, as it’s one of the most important business relationships you’ll have.

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