When do I worry about the legal stuff?

No, you need to worry about the important legal stuff before you start your business!

1. Many states, cities, or townships require a business license. If you don't have this you are breaking the law, even if you never make a sale.
2. Some localities have very strict rules on home businesses. You may be legally prohibited from running any business from you home. You need to check in advance.
3. Sales tax- does your state/country charge sales tax or VAT? If so you have to register with the proper authorities before trying to sell something. And you have to collect the tax.
4. Are you planning to release software with no license? Sounds like a bad idea. In general, your software should be making the customer agree with your license terms just to install the software.
5. What kind of warranty are you offering? If you don't state your warranty, in proper legalese, your warrant terms default to those set by the individual states. That may not be in your best interests if something goes wrong with your software!

Software is a product, not just a file that runs on a computer. Your software product needs that computer file, of course. But it also needs an installer (for the Windows world), license and warranty information, documentation, order forms, ways to take payment, and a number of other minor items. Getting all that right can take a significant amount of time.

As an attorney working with startups in many countries for the past fifteen years, I can give you the firm answer of: That depends. Technically, it can't hurt to have one up front. Find someone who is willing to not charge your for every clarifying point, a ten minute call (unless it's ten minutes every day) and actually is working with you - be fair about paying them when they have reached a critical point and really should be paid something. Startup lawyers are really good at "carrying" you to some degree with the hope that you will pull something off and actually gain value of what they can offer.

Lawyers want to be in on the deal at inception. Not only does it add a client to their base but it also allows them to gain valuable institutional knowledge at the outset about what the client really wants long term. All negotiations and contracts are supposed to reflect that vision.

The real answer is: it depends on what you already know. Have you run businesses before? Had to negotiate contracts provided by the other party? Do you come from a business background? The more answers you can answer yes to, the longer you may be able to avoid retaining counsel and still not make irreparable mistakes.

Any time you are dealing with investors, key employees or long-term high-dollar deals, make sure you are comfortable with your knowledge base before you sign anything or entice anyone else to start performing tasks with pricetags based on your 'offer'.

You need to find a lawyer that you are comfortable with and use that attorney as needed. Make sure it's someone who can and will focus on what your issue is and respond in a timely manner. Don't pay unreasonable retainers. And give them the boot if they are not doing what you need them to do. The caveat there is make sure that you are not dilusional in your expectations.

Only you can answer the question, because the answer depends on how much additional risk you are willing to take on in exchange for saving money.

For example, the LLC - if you comply with appropriate formalities (see Beware Your Alter Ego, which discusses corporations, but also applies to LLCs) - can protect you against personal liability for business obligations. If you want to minimize LLC-formation costs, you probably can create it yourself - see Can I form an LLC without a lawyer?

Similarly, having a good set of online terms of service could provide significant legal protections (see, for example, How Websites can Avoid Liability for User-provided Content). Unfortunately, developing good online terms without professional assistance would be pretty difficult.

Sorry that I cannot say anything more definitive - the choice is yours.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Yes you need to worry about legal issues now!

Not only for terms of service, warranty, licensing etc., as mentioned by Gary, but also to structure things correctly for you and your investors. There are some complex and remarkably important things like "83B election" with which a good attorney can assist. Make sure you find an attorney who specializes in start ups. You want to make sure that at a minimum, you have the right corporate structure in place to protect your personal assets from any company related liability (i.e., an LLC structure).

There are multiple web sites and blogs such as StartupCompanyLawyer.com which are a good source of education for many of the legal topics.

Don't worry about legal stuff until you are making money.