The real benefit to businesses of using a lawyer is counseling and advising and not just getting a document; that’s the outcome of the strategy and advising. Businesses should be using lawyers to help them succeed, put them in situations to avoid unnecessary risks, and recognize opportunities to move the business towards its goals. It’s hard to see how a DIY legal website and document production software can get that done. Proactive legal services can prevent a lot of issues before they become issues, concerns can be addressed, pointed out, and planned for in ways that make them manageable when they come up, for example, a partner wanting out of the business.
DIY legal websites seem attractive on the surface: low priced (everyone knows lawyers can be expensive, right?). On these sites, you simply fill in the blanks and your documents are created instantly. What could possibly go wrong? What is, at best, a subpar, piecemeal solution can easily turn into a situation that will leave a business open to significant liability that could have been avoided.
DIY legal sites are just as likely to confuse business owners as they are to help them. Here are some common examples of issues that businesses run into after using a DIY to handle important company documents:
Here’s what happens when these situations come up for business owners - they spend a lot of time and money getting the agreements or documents “fixed” and amended. Time and money that could have been avoided from the start.
The common reason businesses seem to use DIY legal websites is that they are affordable and save money on expensive legal services. There are endless advertisements for agreements, formations, and other documents for $69 or $99, and when a business is starting out with finances being a major concern that certainly looks like a great deal. While that certainly looks like a good deal, what does it really get you, and where does it leave your business? If you’re paying $69 plus the filing fee to get your LLC registered with the state, you’re only a small part of the way towards properly getting your business set up; what about the rest, what does that cost and how is that handled? That’s the real question.
After incorporating or registering your business, underlying corporate governance documents need to be completed. This is how business owners limit personal liability and take advantage of some tax reduction strategies. Sure, the DIY legal websites will handle that for you as well, but how are they going to know the specifics of the business, what the goals are, how it will be managed, and other important details? What’s the cost for these additional documents, and how close are you starting to get to the cost of hiring an actual lawyer who can advise on the strategies for setting up a company? Yes, they have predetermined questions about some of that, but businesses aren’t a one size fits all deal where a drop-down menu can solve all the problems.
Plenty of business owners aren’t interested in doing their own legal work (perfectly understandable), but the answer to that might not be finding an online resource that will generate a generic form that doesn’t understand the complexities or goals of the business itself. Don’t be sucked in by the convenience of the cheap rates. Most of the DIY legal websites state outright that they are not a substitute for a licensed attorney. Most business owners have poured significant money, time, and energy into getting a business going. Is it worth risking all of that on a computer program that can’t separate a real estate company from a pet grooming business?
Lawyers well versed in the complexities of the law can advise and consult business owners on risks versus rewards and alternative and strategic planning to help protect company assets. Attorneys know what to look for, helping businesses avoid unnecessary bumps in the road, and help keep your legal costs down over time by building in solutions to common issues that are likely to come up. Using an actual attorney allows business owners to build strategic relationships with continuous collaboration. This allows businesses to use a lawyer as a resource (not the last resort) with an understanding of what the company does, its strategy, long-term goals, obstacles, and opportunities. That type of relationship is likely to help a business make money, save on time and limit risks.
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