DIY LLC vs. Real Lawyer — Is It Worth the Extra Money?

2 people start the exact same business on the same day. The first one grabs a laptop, pulls up an online setup website, or in these days just asks AI, and forms an LLC in 10 minutes for $99. Boom, done. I'm a business owner. The second one calls a real law firm and pays about $1,000 for what looks like the exact same LLC. So which one was smarter? In the age of AI, answering that question is harder than it's ever been. Today, we settle it. When doing it yourself is the smart move and when it's the most expensive shortcut you'll ever take. I'm Mark J. Kohler, CPA, attorney, bestselling author, and after 25 years in the tax and legal industry, I'll let you in on a little something. I'm also a diehard do-it-yourselfer. I built my own law firm from nothing, several businesses. I'm still building a real estate portfolio and I love to swing a hammer on my rental rehabs. So this is not some lawyer telling you to always call a lawyer. This is the no BS version to help you save some money and to start your business off right. Let's get into it. Okay, I've got a business to run and a sink to fix, so let's knock this out. I'll just go to one of these DIY entity setup websites. If I get confused at any point, I've got ChatGPT. I'll ask AI what to do. They've never let me down. Okay, Business name available, boom. All right, what state? Everybody swears by Wyoming online, Wyoming. Next, member managed or manager managed? Well, I'm the member, so member managed makes sense to me. So let me ask AI what to do here. I'm the member of the company. Okay, so we'll be member managed. All right, company address, registered agent. Well, I don't have an office address. I'll use my home address, makes sense. It's where I get the mail anyway. Done and done. Operating agreement, $99. Eh, AI can do one for me later down the road. Skip. And that's it. Submit, pay. Ah! What was that? 10 minutes? I love it. I own a company and my LLC is done. Now let's get to work. I'm outta here. Round 1, cost. I feel like clearly I win round one. It's cheaper. A lawyer like you is expensive. A grand, two grand, three. I don't need to pay a lawyer to fill out a form. I got work to do. Fair. But did you get all the pieces and parts? An LLC isn't just one sheet of paper. That state filing fee you just paid is only one piece of the equation. Say what now? Where's your EIN, your operating agreement, your corporate book and membership certificates, your organizational minutes? You still have to set up a business bank account and need all the paperwork for that. Not to mention the annual filings, the to keep you in good standing. I didn't think of that. Okay, fine. I'll get the pieces. I can watch a YouTube video like this one for free, learn what I need, and then just do it myself online. Still cheaper than you. Honestly, yes, you can. Even with all the parts, even with the online services fees stacked on top, you can do it and it will be cheaper than a law firm. And look, I, I get the instinct. Costs matter, especially when you're just starting out. So I'll concede this round. Setting it up on your own is cheaper. Just make sure you get everything you need. Round 1, DIY, 1 to 0. Round 2, did you set it up right? Setting it up and setting up correctly are two different things. Okay, so we'll be member managed. You set it up member managed? Okay, you just told the entire world who owns this company. With manager managed, it keeps your name private as the owner unless you bring in partners or swap out family members or your trust down the road without having to refile the articles and expose the ownership to the public. AI didn't mention that, did it? It gave you exactly what you asked for. You just didn't know what to ask. I'll use my home address. Makes sense. It's where I get the mail anyway. You put your home address because it seemed easy, the natural thing to do. But now it's public record on every filing forever. Tenants, marketers, vendors, and the guy who decides to sue you will all know exactly where you sleep. Everybody swears by Wyoming Online. Wyoming next. You don't live or do business in Wyoming. Your LLC has to be registered where you actually operate, do business, or own that rental property, or it doesn't protect you. So now you end up paying fees for the state of Wyoming and for the home state where you ultimately register your LLC. What you did when you were setting up your LLC is similar to something I did wrong when I was remodeling a kitchen. I chose the wrong size of the cabinets that downstream changed all of my appliances. It was an expensive mistake. Okay, so winging it and asking AI maybe wasn't the best move. It's okay. I probably got to redo some of this. I can do that. Got to take out some aggression. My hatchet here. If you can do it with a hammer, you can do it with a hatchet. Round 2, lawyer, 1 to 1. Round 3, I don't want to deal with a lawyer. I don't want to work with some arrogant lawyer. They're condescending. They don't listen. They don't get the journey I'm on. I've got to make an appointment and it takes forever. It's miserable. Tape drop. Oh. Ow, ow. You know what? Fair. I went to law school and had to hang out with a bunch of wannabe lawyers. I met plenty of people who became lawyers who are not warm, cozy, or friendly. Finding the right lawyer is genuinely tough. Right, and besides, I don't need a lawyer. I follow this guy. Bro, forget the stuffy lawyer. I've got the Elite LLC for you. Wanna set it up in Wyoming? You wanna do what the rich people do. That's what I do. That's where you wanna be. So you wanna follow what I do. Get my Elite LLC. Click down below. I got you. Even though I make a few bucks on that deal, down below. My lawyer told me I have to say that. I'm headed over here in the parking lot to my new Lambo. Well, it's a rental. It's not really mine. Lawyer said I have to say that too. But hey, I've got you. See, he's exciting. He treats me so nice. He's not condescending. He's just like a lawyer. I'm going to go with him. So let me get this straight. You'll trust a guy because he has more social media followers than me, a TikTok account, and a course to sell over someone who went to law school and has done this for decades because he's got better vibes? Yeah. And honestly, I freaking win this one. I'm not excited to learn anything from someone who just takes my money and smugly tells me everything I'm doing wrong. Mm-mm. You know what? On bedside manner, you're right. The average person does have a hard time finding a lawyer who's both kind and knowledgeable. That's why I work so hard at my law firm, KKOS Lawyers, to train my attorneys to not act that way. That's on my industry. I get it and I own it. But hear me out too. That guru has never once told you what you don't need. My entire job as a lawyer is to tell you what you do and don't need. It's called a fiduciary duty. That's the difference between a lawyer and a salesman. Lawyers have some room to improve. They can be egotistical and condescending, but if you find the right one, it can make all the difference in the world. A lawyer who genuinely has your back and will work for your best interest, that can be incredibly valuable. But fair enough, you win. DIY Mark back in the lead, 2 to 1. Round 4, the bigger picture. Let me ask you something, DIY Mark, are you coordinating this LLC with anything? Your entire estate plan? Your other entities? What happens when you start employing your family members? What's your 5-year plan, your 10-year plan? It's just an LLC. It's a piece of paper that makes my small business official. Why has it got to be coordinated with anything at all? Because you've got dreams, a big American dream. What happens when this little thing does take off? What happens if you pass away, get divorced, have more kids, buy more equipment, or that next rental property? Is any of that coordinated with this LLC you're creating today, or is this LLC just sitting in a vacuum? I mean, I just I did my will and trust, also online. It's right here, I've got it in my shop. I just keep it handy for easy reading. Doesn't it cover most of that stuff anyway? That is great you did that, but is your LLC and estate plan coordinated? Does your LLC show your trust as the owner? Does your trust reference your LLC? Are your entities connected? Do they work together as a unit? I didn't think they had to. Have you ever heard of the trifecta? It's my trademark method for bringing it all together. Your entities, your tax planning, your estate and trust running as one machine. Because it's never just about this LLC, it's about the empire that you're trying to build that grows out of it. Right now, sounds like you've got a house of cards. If everything is connected in a unified structure though, you've now got a solid, defendable fortress that can grow along with you. And I'll be honest, this is the one I learned the hard way. I set up entities in a vacuum for years before I understood how they all work together. But now I get to help people like you avoid those same mistakes entirely. I've never had a lawyer who could see I can't see the whole board like that. Okay, I lose round 4. Where the hell have you been my whole life? 2 to 2. Round 5, the tax strategy you didn't know to ask for. Did you have a tax strategy for this thing? Did I have a what? Do you know when to elect an S corporation? Did you put an accountable plan in your minutes so you could reimburse yourself for home office, your health insurance, your auto mileage, your travel? Did you get the right EIN and fill out the SS-4 correctly? Is your bank going to be confused with the paperwork you prepared? Did you make the de minimis safe harbor election so you can write off all your equipment under $2,500 and keep it audit-proof? How did you plan to report this LLC on your 1040? Schedule C, Schedule E, a 1065, an 1120-F? I don't even know what most of that stuff is. I kind of thought once I had the LLC, everything was just automatically a write-off. Unfortunately, there's even more to talk about. When my team sets up an LLC, we're talking tax strategy, estate planning, asset protection, all in the same conversation. 3 pieces, 1 plan. The instructions didn't include that point. Here's the truth about the website you used and that AI. It doesn't understand all the things going on in your life that a strategist is going to ask you. I can hear me losing money. One looks backward and only gives you what you ask for. The other one looks forward and asks you questions you don't even know to ask. A strategist solves these issues early while you can still change the outcome. Because when you get this wrong, you don't find out until years later. Ugh. You can overpay in self-employment tax every quarter because nobody made the S selection. Ugh. And you can miss write-off after write-off because you never set it up correctly. I'm going to have a headache. I can feel one coming on. Migraine. Advil. And potentially that day when the IRS comes knocking, you don't have an accountable plan. No minutes, nothing to back you up. So the deductions you did take are thrown out with penalties and interest on top. I need some shopping therapy. Home Depot. Patty, we're going to Home Depot. That's not one bad year. That's the same leak every single year until somebody finally looks under the hood. Yeah. Okay. All right. I know tax planning is important, but I thought once I had the LLC, it would just automatically come together. You grab round 5. But do you have one of these? A cool magnet tool, telescoping. I can pick up a screw in hard-to-reach places. It's really neat. You got to try one of these. Final score, 3 to 2. Lawyer takes it. That was a close one, though. So here's the honest scorecard. DIY Mark wins 2 rounds. Cost and the fact lawyers could be hard to work with. Both fair and both true. But 2 rounds out of 5 really isn't the point, is it? It's which rounds. DIY Mark won the rounds about your wallet. And your patience. The lawyer won every round about your protection, your plan, and your taxes. The stuff that quietly really matters and can bleed you for years when it's done wrong. If you're truly just starting, no partners, no employees, no real estate, you're testing an idea, won't clear more than maybe $15,000 or $20,000 this year, you're on a tight budget. Then honestly, set up your own LLC and keep your money. Just don't pick member-managed, please. Keep your home address off of everything, file it in the right state, and get it reviewed by an attorney the second it starts to take off. Agreed. And when I get further along and start making real money in my small business, I need to coordinate everything properly. In my estate plan, tax strategies start to matter a lot more. I get it. I'm going to find a good lawyer. Are you available? What's your number? Look, on the ranch, I'll DIY all day long. I'll fix the sink, frame the wall, rebuild the kitchen, but I've also spent years in law school and 25 years more doing this for a living. There are projects where doing it yourself may seem to save you money, but there's ones where it quietly costs you everything you're trying to build. Learning to tell them apart is one of the most important lessons in business. I get it. A penny saved is a penny earned. But if you're stepping over a dollar to pick up a nickel, that's not thrifty. I want to save money. That's why I'm trying to DIY. I mean, I could go buy a pencil that's sharpened, but Why not sharpen your own pencil? I mean, it's pretty satisfying. You're just kind of here whittling away. This is why DIY, you know, like, I don't care in the what's going to happen here. Oh my gosh, Band-Aid! Everybody got a Band-Aid? Band-Aid! If you're setting up a business and want it done right the first time, that's what my law firm, KQS Lawyers, does every day. Please book a free discovery call. We keep it affordable, we turn it around fast, and we bring the whole thing together. The entity, the taxes, the future. The link is in the description. And if you've already set up an LLC for yourself and you're now wondering if it's a mess, that's exactly what Main Street Business Services is for. We'll find out what's missing, fix it, keep you compliant, and keep you private. There's a link below for that one too. Got it. Thanks, Mark. No problem, Mark. Thanks for watching. This is the first part of a brand new series on my channel where I take the do-it-yourself way and put it head to head with how a real professional law firm handles it to help you figure out where you can save money and where you're better off calling a professional. And yeah, that guru is going to keep showing up too. So make sure you hit like, get subscribed, and turn on notifications so you don't miss the next one. I'm Mark J. Kohler. See you next time.