I looked into this a while back and came to the conclusion I maybe/probably didn't need to do it upfront but it was cheap enough that it was probably worth going ahead and doing. As it turns out, my timeframes for doing anything with the business slid out but a don't really regret having put the LLC un place.
YAGNI…without customers and forming an LLC can happen as contracts are being written…but if you think your first potential customer is likely to sue before there’s a contract, walk away and find a different first customer.
It seems like what Paul Graham called “playing house.” Forming an LLC feels like progress but it’s not.
It's not so much about the legal liability. But a lot of companies want to deal with other companies and you can deal with that by just making up a name, doing a DBA with your town or whatever for probably tens of dollars, or making an LLC for hundreds of dollars.
It probably doesn't really matter for small-time stuff. It may also be worth spending a small amount of money in advance to put some structure in place. I agree that involving lawyers and thousands of dollars in advance a lot of the time is probably not worth it in many/most cases.
