Trying to Keep Legal Costs Low? When Should you Consider Breaking the Bank on a Lean Budget?
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In my experience, most entrepreneurs, start-ups, and small businesses want to limit their legal budget to the extent possible. But at what point will not finding the money to spend on legal fees do more harm than good and end up costing you more money? In my practice, virtually all of the expensive legal problems I see arise out of spending too little money on legal at the front end, when a problem could have been avoided. The following scenarios are what I see causing entrepreneurs and start-ups the biggest financial headaches when they did not have sufficient legal support over time: (a) the hiring and firing of employees and contractors; (b) deals with business partners with whom the founder or entrepreneur was at one time good friends with; (c) deals with larger companies who have supplied the contract to be negotiated; or (d) transactions involving the performance of services by a third party. Given the large number of legal problems that seem to arise in these scenarios, I would encourage business people with limited budgets to contemplate obtaining legal counsel in all of those scenarios, to the extent possible. Forbes put together a list of some additional scenarios in which their advisory team recommends having representation, which list is linked below:
