I think the rule applies to most professions, but other than health and law, mistakes are usually not that costly.

It also helps as a gut check. Many lawyers care more about billing lots of hours and covering their own ass than saving you a few bucks. If 5 experienced entrepreneurs say, “in my experience, this is a waste of money” and my lawyer says it's an important thing to do, I might grill him a bit and find that, under pressure, he says “Yeah, I guess you can probably do without that for a while.”

The key here is (like everywhere else) to really consider the source of any advice If I hear someone say, “When I ran into this with my company, we did X on the advice of our lawyer (who was a big gun at WSGR),” I'll consider it pretty seriously. If I hear someone say, “I read somewhere that you should do X, but I've never been in this situation before. And I'm 12.” I'll probably blow it off.

I was not trying to suggest that you should incorporate before you start writing code, but my personal assets are worth protection, so I wouldn't launmch without forming an llc. Luckily their are sites that do this for you very cheaply.

While I see your point, I fall perfectly into the category that
Tom describes: I want to launch something eventually and don't have the bankroll to pay for the good legal advice that I probably need. (By the way, hu4rollz one day…)

How does Y Combinator do it? If you're accepted to their program and have issues, do you have to settle them before demo day?

And I think you'll agree that a lot of people at Hacker News don't have money. They're bootstrappers, get a prototype out then worry about it later types who don't have the capital for good legal advice. So what is your advice for them? Don't start until you can afford a lawyer? Go with a crappy cheap lawyer? I think the philosophy of Hacker News is “don't wait, do your start-up now.” If everyone waited until they could afford a good lawyer to answer every legal worry they had, then we would have a lot less companies out there.

I'm certain we both agree that legalities are a huge deal, and doing it wrong can turn into huge problems. But I think you're ignoring the fact that some people who aren't you might be fine with that risk. You're assuming everyone wants to mitigate risk as much as possible. But what if people are perfectly fine with a huge amount of risk if it means they get their company up and running? For those people, the advice they get on Hacker News is good enough. They don't have the capital for real legal advice and they don't care. If they get sued and it all falls apart, well, thats just what happens. They want a quick and dirty answer that might be right and they move on, using their available capital for something else. Others have done it that way and so will they.

Your article makes the assumption that having your affairs in good legal order is a necessity for starting a successful company. Its not. You can have a successful company with completely messed up legal affairs and a substandard or even false knowledge of what the law really is. Will it be risky? Sure. Can it fall apart at any time and go from successful to huge crash in a moment? Yes. But for the time being, it will be a successful company, and at any time they can change things around and pay for legal advice.