Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

People looking to start a business of any kind understandably (and intelligently) look to prevent spending on any unnecessary services or goods. Sadly, legal services are often lumped into the “too costly” or “unnecessary” category. It’s easy to see why - legal services are not cheap and Foonberg’s Client’s Curve of Gratitude reflects a form of Buyer’s Remorse as applied to legal work. The former is the experience of the younger (lawyers are too expensive), the latter the experience of the older (I could have done it without legal advice). These reasons appear sound from a business standpoint. However, there are some very real downsides….

- Purchased form documents create a false sense of security as “boilerplate” terms are assumed by the entrepreneurs to be “safe,” which is hardly the case. Owners who are not getting along and decide to split may find themselves mired in extremely expensive litigation over a long period of time, all of which could have been avoided by spending a fraction of the litigation costs on quality document drafting by an attorney.

- Technical faults in any number of license or regulatory filings go unnoticed until the company is audited, a criminal investigation occurs, or some other form of litigation begins. The litigation costs dwarf up-front legal costs due to the belief that preventative legal advice was not necessary or worthwhile.

- Buyers and sellers throw together an amalgam of words, believing that the resulting document reflects a mutual understanding. Eventually, one party feels aggrieved and suddenly the so-called contract is revealed as imprecise and nebulous…and so costly litigation commences.

While I am an attorney and we attorneys do like to earn a living, most of us hate (and I do mean hate) to see client’s creations swallowed up by truly preventable events. As one business attorney told me “Businesses will either pay me now, or they will pay me later.” That’s not a threat, it is a fact. That fact may not apply to every situation, but it applies to enough of them to warrant attention - so much so that not getting good legal advice up front results in an inverse form of Buyer’s Remorse…that services should have been procured at the start.

The question is: is it worth it to pay now, or to pay later?

UPDATE: I failed to note that the Milwaukee Business Blog discussed this same issue a few weeks ago.

This entry was posted on Tuesday, February 12th, 2008 at 12:24 am and is filed under Business Formation, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.