So much more complicated is an understatement. Complications with IP, firing and sickness spring to mind.
If you know the person well you still need to be careful with the contract but you should be less likely to fire them and get into an argument about equity.
To think about it, knowing the person well might even be worse if you end up in a sticky situation. Not only have you just lost a friend, but your reputation as well. Moreover, chances are high that he/she will be in the same social circles as you - which ends up getting even more messy
To clarify when I say know well I don't mean friends I mean people who I know have the coding chops to be worth the equity and pitfalls. I'm never had any luck telling how good a coder is without working with them for 3-6 months, after that it is obvious :-)
If you know the person well you still need to be careful with the contract but you should be less likely to fire them and get into an argument about equity.