Looking Closely at What Lawyers Really Do?
A potential client recently told me that he was going to use a non-lawyer service instead of me because the other service was more in line with his budget. This is a common statement made to lawyers who work in business formation, trademarks, and contracts.
The non-lawyer services industry has done a fantastic job with their marketing. They’ve left people with the impression that non-lawyer services (which always include a disclaimer that they’re not responsible for any errors or mistakes) are a viable substitute for using a lawyer.
I think they’ve been successful with this marketing plan because people don’t really know what lawyers do. So I’d like to take this opportunity to pull back the curtain on what lawyers in my practice area actually do and why it is valuable. I’ll address a few common assumptions.
Assumption #1: I can form my business online with ABC non-lawyer service for a fraction of the price this lawyer is charging. They’re doing the same thing. Why should I pay more?
Truth #1: The lawyer and the non-lawyer service are not providing the same thing. The non-lawyer service cannot help you choose the right type of entity and cannot give you tax advice or advice on the liability issues facing your business.
In fact, the non-lawyer service can’t give you legal advice at all. They’re prohibited from doing so. What they can do is help you file the documents with the state so you can form your business. But you could do that all by yourself online directly with the Secretary of State. Filing the documents with the state is the easy part. I have some guidance on how to do that in this post.
The hard part is choosing an entity that fits your long-term and short-term goals. The hard part is structuring the business so that it complies with state law, so that your governing agreement overrides the default parts of the statute that aren’t appropriate for your business, and so that your governing document properly reflects the rights and obligations of the owners. The hard part also includes ensuring that the entity is efficient from a tax standpoint and that the owners are advised on how to maintain the limited liability afforded by having a business entity.
Assumption #2: I can file my trademark documents online and by myself. Why should I pay a lawyer to do it for me?
Truth #1: Trademark law is a large body of law. Most laypersons don’t know the difference between copyrights, trademarks, and patents. While those all fall under the umbrella of intellectual property, they are vastly different and protect different things. Understanding what you’re filing for is the first step and a lawyer can help you with that.
Secondly, some marks can be registered and some cannot. A lawyer will research your mark and advise you on its “registerablity.” When your application is submitted, it will be reviewed by a lawyer at the U.S. Patent and Trademark Office. Any issues with the application will be addressed by that examining attorney with cited cases and other legal objections. Understanding how to best respond to those office actions is not easy for a layperson.
Thirdly, a lawyer will also help you come up with a plan for which marks to register and a timeline for doing so based on your budget. She will also advise you on how to protect your mark once it is registered. Here’s a hint. The U.S. Patent & Trademark Office does not police your mark for you.
These are not things the layperson is typically equipped to handle. Many large companies have whole teams of lawyers that monitor their intellectual property. They do this because they recognize the importance of protecting it properly. You should also note that the USPTO itself recommends that you use a lawyer. And they have no financial incentive to make such a recommendation. If you mess up your application, they keep your application fee. So the more times you apply, the more money they make.
Assumption #3: I know how to read. I don’t need a lawyer to look over my contract or to draft one for me.
Truth #3: There are books on how to perform a C-Section that I could probably read and understand. That doesn’t mean I’m qualified to deliver someone’s baby via a cesarean section procedure. Understanding the words on the page and having the requisite base of knowledge to know how those words are used and interpreted in practice can make a world of difference.
There are thousands of cases that set precedent regarding how the terms of contracts are construed by the courts. When a lawyer reads a contract, she’s thinking about those cases and how courts have treated similar contract terms in the past. When a lawyer reads a contract, she’s not just reading for typos and formatting. She’s reading it to determine whether the rights, obligations and remedies in the contract will hold up in court and whether the way the contract is drafted will be a benefit or detriment to her client. A lay person has neither the skill nor experience to do this.
Sometimes when I’m drafting or reviewing a contract, I research and read several court cases to make sure the language in my client’s contract is stated properly. This takes time. If the language in a contract isn’t enforceable, the contract may be worthless. One of the reasons to have a contract is so that if one party breaches, you can get your legal remedy. If the contract terms are unenforceable, you need to know that up front.
For more information about why you shouldn’t draft your own contracts, see this post.
Because the value of a lawyer’s work isn’t necessarily immediately noticeable compared to the way some service professionals’ services are (think developer creates a pretty website, painter recolors your living room walls flawlessly, etc.), it can be hard to appreciate the work the lawyer performs.
The value from using a good lawyer will be seen later down the line when you have a dispute between your company’s founders, when you’ve built a brand and someone tries to infringe on your trademark, or when you have to sue under a contract to get paid. Just because you can’t immediately see the benefit of using a lawyer doesn’t mean you shouldn’t recognize the value in it.