Lawyer Should Be Part of Business Plan
If you operate your own business, there are undoubtedly many times when you could use sound legal advice. Unfortunately, the cost of legal counsel is very expensive. Just having a lawyer write a letter, or even answer your telephone inquiry, can run more than $100. Of course, a lawyer’s assistance could save your business much more than that in the long run.
But often it is hard to evaluate whether you have a serious legal problem, and that first phone call may not be worth the expense.
Small businesses face all kinds of diverse legal problems, starting with the threshold question of what kind of legal entity should operate the business--corporation, partnership or sole proprietorship.
Almost every kind of business needs occasional legal advice. If you own a small retail business, perhaps a vendor sells you defective goods and refuses to give a refund. You’ll want to know whether you can sue to collect or get the goods replaced. Or if you are self-employed as an electrician, one of your customers may withhold payment because he says your work is substandard. Your lawyer may help you file a mechanic’s lien against the customer’s property.
If you’re a landlord, you may want to know about your potential liability if your tenant has a vicious pit bull in the yard. Or a former employee of your business may claim sexual harassment, and you’ll need legal advice before a suit is filed.
In the last few years, prepaid legal services have become available. They provide routine legal advice to consumers for a monthly fee. The idea seems to be working for personal legal matters; why not a prepaid legal plan for small businesses?
Legal Marketing Services Inc. in North Hollywood and Consolidated Legal Concepts Inc. in San Rafael have begun to market just such a plan.
For a monthly fee of $89.65, a 2-year membership in “BusinessPlan+Plus” gives clients access to attorneys who will provide certain basic legal advice on business matters without further charge and other services at a reduced rate. The basic services included in the monthly fee are unlimited telephone consultations, unlimited review of business documents up to six pages each, office consultations for 30 minutes per subject and six free business letters.
Other standard business legal matters, such as incorporation, drafting a partnership agreement, preparing a promissory note or filing a mechanic’s lien, are billed at standardized prices below the going rate. In addition, any other legal work is billed at $75 an hour, much less than the $100- to $250-an-hour rates that most lawyers charge.
“The small and medium businessman has an ever-increasing need for legal counsel,” explains William M. Wise, president of Legal Marketing Services. “And this prepaid method allows him to get the counsel he needs at a price he can afford to pay. “
It’s too early to tell how well this venture will work. The founders are just now trying to sign up business insurance agents to sell it to their clients. It sounds like a good idea, but success will depend, in part, on the quality of lawyers in the program, the marketing effort and the effectiveness with which customers’ complaints and problems are resolved.
Equally important is the role of the customers themselves. Most small-business owners are not accustomed to using attorneys and may not naturally think of consulting one routinely. And the customers will only continue in the program if they use the lawyers often enough to feel that the monthly fee is being well spent. Follow-up efforts to educate customers about the best way to use a lawyer might be helpful.
Klein cannot answer mail personally but will respond in this column to questions of general interest about the law. Write to Jeffrey S. Klein, Legal VIEW, The Times, Times Mirror Square, Los Angeles 90053.
