If youâ€™re looking to turn your side hustle into your full-time career, you might be wondering if you can use your current employerâ€™s group legal insurance for your start-upâ€™s legal needs. It's common to opt for group legal insurance offered through your workplace benefits. These group insurance plans provide free legal assistance for a variety of needs from law firms that have contracted with the insurance company to perform the legal work.
While group legal insurance might seem like an easy option to save on your start-upâ€™s legal documents, itâ€™s likely inadequate to serve the specific needs of your business and provide the ongoing legal support you need to turn your side hustle into a successful business.
Here are the reasons why your start-up needs the kind of legal expertise and attorney-client relationship that goes beyond the scope of group legal insurance coverage. Iâ€™ll explore the potential pitfalls of using group legal insurance for your start-up and share suitable alternatives to ensure your young business is protected and prepared for every stage of its growth.
One Size Doesn't Fit All
When it comes to your start-upâ€™s legal needs, there is no such thing as a one-size-fits-all solution. While there are some documents that every business needsâ€“articles of organization, an operating agreement, and a company handbookâ€“there are additional legal documents that every business needs that are unique to that businessâ€™s operations and the ownerâ€™s aspirations and definition of success. Your businessâ€™s exit strategy, cash flow, expenses, and projected growth must be taken into account to provide comprehensive documents that will serve you and your business.
Your current employerâ€™s group legal insurance plan may offer some business legal services, but a generic set of business documents simply isnâ€™t enough to protect your business and set it up for long-term success. To create a successful business, the process needs to begin with an evaluation of your business goals, your exit plans, and your plans for financing the business and growing the business. This is why we donâ€™t have a one-size fits all solution for business owners, but instead begin our work with you by looking holistically at everything that makes up your company.
Unfortunately, the type of cookie-cutter legal documents you are likely to receive through your group legal insurance plan simply wonâ€™t include the kind of comprehensive considerations and strategic counseling necessary to properly plan for and protect you and your start-up from any issues that may arise in the future.
Legal Insurance Plans Nickel and Dime
Many group legal insurance plans boast free legal services after your deductible is paid, but what isnâ€™t revealed is the limit of the coverage.
Only certain types of legal services are covered under group legal insurance plans. Business law is frequently covered, but the kind of work you will receive is a mere set of documents, similar to what you could create yourself online, and not a customized, well-counseled strategic plan that will be sure to work for your business and your life.
More importantly, most legal insurance plans have limits to the amount of claims you can file for each type of service each year. For example, you may only be covered to create your companyâ€™s operating agreement once a year, but wonâ€™t be covered if you need to edit the operating agreement mid-year due to changes in your companyâ€™s structure or processes. Business planning isnâ€™t something you do once, as your goals in life will change, your business will change, and the law will change. Business documents created through a legal insurance plan will not keep up with those changes, so you may receive documents, but those documents arenâ€™t likely to be what your business will need when something happens to you.
Legal Insurance Plans Lack Long-Term Considerations
You may own your business for a short time or a lifetime, but no matter how long you own your business, it requires a continuum of proactive strategic legal planning in order to limit liabilities and run smoothly. Your business may expand, team members may be hired and let go and tax laws change. Your businessâ€™s legal services need to keep up.
Sadly, group legal insurance makes it impossible for the attorneys it contracts with to get to know your business or provide the kind of ongoing strategic legal guidance that yields meaningful results.
Under group legal insurance, your choice of attorneys is limited to the firms that have contracts with the insurance company, and there is no guarantee that the attorney you worked with this year will be available to help with changes in your business next year.
Certain areas of business law, like negotiations and workers' compensation, may not even be included in your coverage at all. Time-sensitive legal work needed as a result of a filing deadline or an emergency that affects your businessâ€™s succession plan may be impossible to carry out when using an attorney through group legal insurance.
As a small business, you donâ€™t have the time or resources to make legal mistakes or delays. And if youâ€™re starting your business while still working for someone else, you really donâ€™t have time to file insurance claims every time you need to meet with a business lawyer.
Instead, you want to work with an attorney who can pick up right where you left off, allowing them to quickly and effectively address your businessâ€™s legal needs with just a phone call.
You Need a Heart-Centered, Counseling-Based Planning Approach
Owning your own business is far more than filing Articles of Incorporation or running payroll. Itâ€™s also about proactively avoiding issues for your business and creating strong systems that your business can leverage for planning and growth.
Whatâ€™s more, the needs of your business and the challenges youâ€™ll face as a business owner are constantly changing. Thatâ€™s why itâ€™s crucial to work with an attorney who has an ongoing relationship with you and your business and who can advise you strategically throughout your business journey, rather than just serving you one time with incorporation of your business, but with little understanding of your business needs.
We take a holistic approach by working closely with you to understand your business and the dreams and aspirations you have for your company and life as a whole. To do this, we start by getting to know you and your desires for your business. We look at your Legal, Insurance, Financial, and Tax systems to assess which areas need attention and make sure your business is built on a strong foundation.
From there, we offer several service models to address your needs on a flat fee basis or through monthly meetings as your ongoing legal counselor. No matter which service model you choose, you always receive personalized service and can call on me at any time as an extension of your team.
Trusted Expertise in Business Legal Services
While group legal insurance may seem like the ultimate way to get your start-upâ€™s legal needs taken care of, the services available through these group insurance plans simply arenâ€™t comprehensive or strategic enough to ensure you and your business get the support and guidance you need. Instead, itâ€™s crucial to work with an experienced business attorney who gets to know you and your company on an intimate level.
You put your heart into your small business, and your business deserves personalized attention, technical expertise, and unwavering dedication of your attorney. Thatâ€™s why we have dedicated my practice to mastering the intricacies of business law as well as providing strategic guidance, allowing me to guide you skillfully through the decision-making process while looking ahead to proactively avoid issues in the future.
If you want to feel like your business attorney is a part of your team and not just an insurance claim, schedule a phone call with me. Iâ€™ll share all the details of our business planning process.
This article is a service of Ganvir Law, Personal Family Lawyerâ„˘. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a Business Strategy Session for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.
The content is sourced from Personal Family LawyerÂ® for use by Personal Family LawyerÂ® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.