The Hidden Risks of Using a DIY Legal Service to Form Your Business

Starting a business can be an exciting time. You’ve got a brilliant idea, the “go get ‘em” attitude, and maybe have even picked out the perfect name. And now for the not so exciting part, the legal paperwork. Where do you even begin?

We’ve all heard of online DIY legal services like LegalZoom and Rocket Lawyer that promise fast, affordable legal documents that guide you to establishing your LLC or corporation. But here’s the truth: what’s fast and cheap at first can become stressful and expensive down the road. These online platforms may provide you with the forms to complete, but they don’t offer the proper guidance and services tailored to your specific goals to make sure the form is completed correctly as working with an experienced business attorney. In fact, they often miss important legal steps that could affect your business in the long term.

If you’re starting a business in Northwest Arkansas, it’s important to understand the hidden risks of using a DIY service before you hit “submit.” 

Potential Pitfalls of Using DIY Legal Services

There’s no denying it— online DIY legal services are appealing. They offer fast services at a flat fee — you choose your business type, fill in a few forms, pay a fee, and you’re done. No appointments, no legal jargon, and no big bills. For many entrepreneurs, especially those just starting out, it seems like the smart, budget-friendly choice.

But what online DIY legal services don’t offer, are answers: answers to your questions, and solutions to your problems. Legal services for businesses are not one-size-fits-all.  And when legal questions and problems come up, as we know they will, the forms you filled out online may not be enough to protect you.

#1: One-Size-Fits-All Doesn’t Fit Every Business

Most online DIY legal services use templates. These templates are designed to work for a wide range of businesses and are not tailored to your specific business needs. For example, a restaurant has different legal needs than a software startup, while a vendor working with Walmart in Bentonville has different contract risks than a freelance graphic designer. Your business needs a business law specialist to help you navigate the world of entrepreneurship.

#2: Choosing the Wrong Business Structure

When forming your business, one of the first decisions you’ll make is choosing a structure—like an LLC, corporation, or partnership. Each business structure comes with different rules for taxes, liability, and how your business can grow.

Many online DIY legal services push an LLC as the easiest and most flexible option. While LLCs are great for many small businesses, they may not be the correct choice for your business. In some cases, a corporation might make more sense if you’re planning to raise money from investors. If you don’t fully understand the pros and cons of each business structure, it’s easy to choose incorrectly.

Working with a business law attorney can save you time, money, and headache from the beginning to the establishment of your new business.

#3: Incomplete or Incorrect Paperwork

Ok, you’ve filed your business with the Secretary of State, now what? Filing with the Secretary of State is only part of forming a business. You also need to create an Operating Agreement (for LLCs), write Bylaws (for corporations), get an EIN from the IRS, register with the appropriate governmental entities, and obtain the relevant licenses and permits. If any of these words or processes sound confusing, you should contact a business law attorney, as many DIY online legal services skip or gloss over these pertinent steps.

If these documents are missing or done incorrectly, your business could be seen as a fake entity in the eyes of the law. That means you could be personally responsible for business debts or lawsuits. You could also face delays opening a bank account, applying for loans, or signing contracts.

A business law attorney will make sure everything is filed correctly and on time, that your business is legally protected, and that you don’t miss a critical step in the process.

#4: No Ongoing Support or Legal Advice

Online DIY legal services help with one thing: filing your basic formation documents. After that, you’re on your own.

But filing the documentation is just the tip of the iceberg.  As your company grows, you’ll face new challenges—hiring employees, creating contracts and NDA’s, protecting your brand, dealing with disputes, and even planning for growth. Online DIY legal services don’t offer ongoing legal advice to help you make smart legal business decisions along the way.

Having a business law attorney on your side means you have someone to turn to when business gets complicated. You get advice that fits your business, not just a list of FAQs.

The Value of a Local Business Law Attorney

Working with a business law attorney based out of Northwest Arkansas isn’t just about paperwork—it’s about strategy. A hometown business law attorney understands the area, knows how local businesses operate, what industries are growing, and what legal challenges are common. They can also help with local compliance, licenses, and connections that online DIY legal services simply cannot provide.

Whether you’re in Fayetteville, Bentonville, Springdale, Rogers, or beyond, having a business law attorney in your backyard makes a big difference.

Contact the Law Group of Northwest Arkansas Today

Starting your business with an online DIY legal service might seem like a good way to save money, but it can actually cost you more in the long run.

When you work with a business law attorney, you get peace of mind. You get a trusted advisor who’s invested in you, your business, and your success.

If you’re ready to start your business the right way—or fix problems caused by a DIY service—we’re here to help. Contact our office today or call 479-316-3760 for a consultation, and let’s build a strong legal foundation for your business.