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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Pat Shriver
December 2013-January 2014

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Online services might do for some basics, but beware for others

The Internet has radically changed all types of businesses, and the legal services industry has not been immune to this change.

There are various well-established online services such as legalzoom.com, rocketlawyer.com, and nolo.com that will help you with a number of basic legal needs, including forming a new business entity, registering trademarks, and putting together simple wills and other estate planning documents.

These services are inevitably priced lower than similar services provided by most practicing attorneys, and this price competitiveness is a large part of what drives popularity.

A common question is whether people are as well protected as they should be when using these types of services versus using an attorney. The answer, of course, is “it depends.” Let me explain.

Routine vs. complex

There are a number of legal issues that some people consider “routine.” For example, drafting a simple will is something that, strictly speaking, can be done without the assistance of an attorney, and in some cases, these types of wills may be perfectly acceptable.

If all you need is to have a document that describes how your assets are to be distributed amongst your heirs, a simple will should do the trick, and it is very likely that an online legal service will produce a will that meets the minimum state standards to make the will enforceable and binding on your heirs.

However, drafting a simple will is only the tip of the iceberg when it comes to estate planning. Knowledge of state and federal tax laws permits an estate planning attorney to take advantage of various provisions to protect your heirs from having their inheritance reduced by paying taxes.

Also, there are other issues that are relevant to most people that are not addressed by a simple will, such as guardianship for minor children, powers of attorney, durable powers of attorney (which are different from regular powers of attorney and survive the incapacitation of an individual), and health care directives.

Another area where people commonly use online legal services is to create their business entity. Several services will help you create your new corporation or limited liability company for much less than a law firm would. For simple types of business entities, especially single-owner businesses, there’s probably little harm in using online legal service. However, whenever a business has two or more owners the internal rules governing the operation and management of the business and the relationship between the owners becomes significantly more important.

Online legal services do not include a number of provisions in the paperwork needed to create a corporation that attorneys routinely include. An example under Minnesota law is the statute that directors of the corporation are elected under a “cumulative voting” mechanism that “weights” the vote of minority owners so the board of directors is more likely to include representatives elected by minority owners.

However, this rule is counterintuitive to most people’s understanding of how election of directors should work (most people presume the majority owner of a corporation is able to elect the directors of the corporation), and without modifying the cumulative voting rule in the articles of incorporation (which every business attorney would advise), the owners of the corporation may one day be surprised to find out they have been electing directors incorrectly for several years.

Beyond the obvious

Yet another legal task that is commonly marketed by online legal service providers is federal registration of trademarks. And at first glance, the registration process looks fairly simple. The U.S. Patent and Trademark Office accepts applications to register trademarks online, and the information required in the application is not particularly onerous.

The simplicity of the process hides the fact that there are several nuances to the registration of trademarks that may affect  the holder’s ability to register the trademark now or to enforce trademark rights in the future, and these nuances are not apparent to attorneys who do not regularly practice in this area, much less non-attorneys.

It is common for applications to register trademarks to be rejected for one of several formal or substantive reasons, requiring the filing of additional materials or modifications to the trademark application that do not readily lend themselves to easy understanding, and it can be difficult even to understand the reasons for rejection, much less how to resurrect the application.

A medical analogy

Being an attorney, I am somewhat biased in favor of having a real, live attorney to advise clients on all legal matters. But this bias is not so absolute that I wouldn’t advise potential clients to utilize these online legal services sometimes, and I have given that advice on several occasions.

So how are you able to decide when to use an online legal services provider and when to engage an attorney? Of course, there is no hard and fast rule, but I can analogize legal services to medicine. Everyone knows to take an aspirin when they have a headache, or to use antibiotic ointment and a bandage in the case of a cut or scrape. But no one should try to set a broken bone or self-diagnose a concussion. Similarly, forming a single-owner business entity or applying to register a fairly basic trademark may be something that clients could and should do on their own or with the assistance of a legal services company. However, more complex services will obviously require the assistance of counsel.

Lastly, it is important to recognize what you are actually looking for. If you already know what type of business entity you need or how you want your assets passed on to your heirs (and understand the tax ramifications of your plan), you may only need the assistance of a service company that will help you draft or file the right document.

But if what you are looking for is the ability to discuss your legal needs and receive personalized advice, you’re likely better served by hiring an attorney.