Solving the Legal Advice Dilemma of Startups and Small Businesses
Starting a new business is an exciting venture, but it comes with its fair share of challenges, particularly when managing finances. Early-stage entrepreneurs often find themselves in situations where available money is scarce, forcing them to decide where to skimp and save. One area that often gets overlooked is legal advice, a crucial element that can make or break a business.
The Cost of Legal Advice
Billable rates for attorneys can be prohibitively expensive, averaging around $350 per hour depending on the area of the country. These costs can seem insurmountable for new and small business owners who are already stretched thin financially. As a result, many early-stage entrepreneurs seek free or questionable, non-attorney services for essential legal advice. This is often a critical mistake.
Questions Before Problems Arise
Some of the best legal advice comes from questions answered before problems arise. This proactive approach can save businesses from costly mistakes and legal entanglements. I encourage my clients to access competent, licensed legal counsel at various points in their entrepreneurial journeys. It is key that legal advice is sought BEFORE a minor concern develops into a full-blown crisis. Like insurance, it is typically too late once you realize you need it. However, for those who worry about being billed for every attorney engagement, the question often arises: "Is it worth $350 an hour to get a legal opinion on this?" Due to the high costs involved, they frequently decide that the answer is "no."
Without knowing the law, you may have difficulty understanding what is legally significant. Without accessing an attorney to help you decide if, for instance, a clause in a contract is legally significant, you are left to your own devices. Frequently, the result is a Google search or a ChatGPT prompt. If the answers you get are only partially correct, it can result in significant problems ahead. In hindsight, the hourly rate for legal advice, which seemed so out of your budget then, now would have been a bargain.
Changing the Calculus with Prepaid Legal Services
Utilizing a prepaid legal service changes this calculus. It flips the evaluation from deciding whether or not to ask a legal question a no-brainer. With prepaid legal services, business owners have already paid a flat monthly fee to ask questions, relieving them of the financial stress of seeking legal advice. Encouraging a businessperson to get answers to all their legal questions can be a game-changer for new and small businesses where every decision counts.
What is Prepaid Legal Services?
Many business owners and entrepreneurs are unfamiliar with the concept of prepaid legal services. In simple terms, you agree to pay a fixed monthly fee in exchange for access to a range of legal services from a team of state-licensed attorneys. It's like a gym membership. You pay a fixed monthly fee to use the gym's services and equipment. The gym knows that not everyone will use all the services all the time, but by everyone contributing, they can provide access to services that would be too expensive for one person to afford.
The slate of prepaid legal services typically includes legal consultations, letters and phone calls made on behalf of clients, document reviews, and collection letters. Areas outside the plan are usually eligible at a discounted hourly rate. Monthly membership fees for small businesses range from $50 to $200 depending on the range of services needed, so you can easily work this fixed cost into your monthly budget.
One of the biggest advantages of having a good prepaid legal plan is not just the money you save but how it actually changes your behavior for the better. Instead of having to analyze each potential legal question to determine whether it is "worth it," you can easily pose a legal question to an attorney and get the peace of mind you receive from understanding your options prior to something potentially snowballing into a costly problem. This empowerment can boost your confidence in making business decisions.
LegalShield: A Remedy for Tight Budgets
One of the best options to remedy this problem is LegalShield. Established over 50 years ago, LegalShield offers various prepaid legal services, allowing business owners to access legal advice from licensed attorneys without fearing exorbitant hourly rates. This service provides peace of mind and ensures that entrepreneurs can make informed decisions that will benefit their businesses in the long run.
Critics of prepaid legal services will point out that it doesn't cover every possible legal issue a business may encounter. If you think it through, that would be impossible. That would be akin to your primary care physician being a specialist in every possible area. That is just not feasible. LegalShield is designed to get you the legal answers you need to make the right decisions in the future. Suppose your business gets to the unlikely point of needing a legal specialist. In that case, you need to know that and proceed accordingly. As most businesspeople understand, the expectation that the plan must charge all members to subsidize those rare events that fall outside the plan's scope would be a losing business model.
In conclusion, while budget constraints are a significant challenge for new and small businesses, it is essential not to overlook the importance of legal advice. Prepaid legal services such as LegalShield offer a viable solution that makes legal advice accessible and affordable, enlightening business owners about the crucial role it plays in confidently growing their enterprises.
To learn more about LegalShield and to explore the purchase of plan options, visit my LegalShield website.
