Disaster DIY: Business Law Edition

  • Aug 4 2015

By Ted J. Schneider, Esq.

Have you ever watched the TV show Disaster DIY on HGTV?  The premise of the show is that many people, who have no idea what they are doing when it comes to home remodeling, try the “do it yourself” (DIY) approach anyway.  The host of the show then comes in to save the day, repairing what the DIYers have destroyed, and teaching them how to properly perform certain tasks.

Unfortunately, the DIY phenomenon has expanded beyond the home improvement sphere and sprouted up in the world of business law. It is tempting to try and find a DIY solution to legal issues.  Budgets are tight, and professional legal advice can seem like a luxury when you are a start-up business or struggling to meet quarterly goals, so many businesses adopt a DIY solution when what they really need is a good lawyer and sound legal advice.

The Internet encourages many business owners to DIY their legal issues, whether it’s access to legal information, contracts or DIY incorporation.  The problem is that advice on the Internet is rarely accurate – or thorough – particularly because business law varies from state to state.  California corporation law often contains nuances and requirements that are absent in Texas, for example.  Further, we don’t know what we don’t know.  And by trying a DIY solution, the business owner may not know the right questions to ask, or realize what other options he or she should consider in light of the business’ goals.

After pursuing the DIY route and disaster, inevitably, ensues, business owners are forced to call in the professionals to clean up the mess.  Unlike the TV show, where the show’s producers cover the remediation costs for the homeowners, the costs of fixing a legal DIY disaster rest solely on the business or the business owner.  And it often costs businesses significantly more to rework a legal framework that was not carefully or property drafted or thought through at the outset.  We have seen costly and consuming litigation arise between partners because they thought they could DIY their corporate structure.  There are two reasons for this increased cost.  First, proactive legal help is always going to be more cost effective than legal triage; it’s infinitely more costly to actively fight a pending lawsuit than to carefully draft and implement needed policies to avoid the dispute in the first place.  Second, the results that even the best attorney can salvage from an awful situation will not be as ideal, or as cheap, as it would have been to avoid the disaster altogether.

If you are considering starting a business, incorporating, or entering into a contract, please reach out to the professionals for assistance rather than relying on Internet services or advice.  The business attorneys at Schneiders & Associates, L.L.P. are skilled at crafting custom legal documents that are designed to avoid disputes and ensure that your legal structure is tailored to achieve your intended results.

Posted in: Business & Corporate


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