By Michael McMahon, J.D. and Trent Bunker
Balancing your business’ budget or maintaining personal solvency is no small task. In an era where every dollar counts, we see why many individuals and small businesses are tempted to turn to “Do It Yourself” (DIY) online legal services. While doing so may be appropriate in certain circumstances, we urge you to do so with great caution.
DIY services offered by companies like LegalZoom, Rocket Lawyer, and LawDepot, to name just a few, provide a range of legal documents like contracts, wills, trusts, business incorporation papers, and trademark applications. They are marketed as an affordable alternative to hiring an attorney, promising efficiency cost-savings. But while these online providers may appear to expand access to legal resources, they carry significant risks that can lead to greater costs, confusion, and potential legal pitfalls over time.
The Illusion of Cost Savings
Many gravitate towards DIY legal services primarily on the perception of cost savings. The hope of obtaining a legally binding document at a fraction of the cost of hiring an attorney is undoubtedly appealing. However, early savings can quickly lead to even greater expenditures when the inadequacies of these generic documents lead to the need for wholesale revisions or, even worse, potential litigation and even liability.
“One size fits all” language can lead to costly lawsuits or even the loss of the business due to lack of detail or provisions protecting the specific business. In contrast, a qualified attorney would be much more likely to craft a document that reflects the particular needs and risks of the business, providing a more robust safeguard against potential disputes.
An individual or business using a DIY service to draft a contract may believe that the document provides full protection, only to discover later that it lacks critical provisions. When the deficiency is discovered, rectifying the situation without significant expense or legal complications may be challenging or impossible. This false confidence can be especially dangerous in high-stakes situations, where the consequences of a poorly drafted document can be severe.
Here are some examples of the many reasons DIY legal service providers may fail to match the standard of aid offered by a traditional attorney.
Issue 1: The Changing Legal Landscape
The law is constantly evolving, especially in California. Federal and state legislatures passes new laws, courts hand down decisions that interpret existing statutes, and regulatory bodies issue new guidelines. These changes can have significant implications for legal documents. For example, a change in tax law could affect the validity of a will or trust, or a new regulation might necessitate revisions to a business contract.
Online legal services are not fully equipped to keep pace with these developments. While they may update their templates periodically, they cannot provide the adaptive legal advice that an attorney can offer. Furthermore, many of these services explicitly state that they do not offer legal advice in their disclaimers. This means that if the law changes after creating your document, you may not even be aware that your document is outdated and potentially unenforceable.
In contrast, a practicing attorney must monitor changes in the law to provide quality services for clients. They can proactively advise you when your documents need to be updated, ensuring your legal security. DIY legal platforms struggle to provide this level of dynamic service.
Issue 2: The Uniqueness of Your Legal Needs
Every legal situation is unique; what works for one person or business may not work for another. DIY legal services rely on standardized forms designed to be broadly applicable. While this approach can work for simple, routine matters, it falls short when more complex or individualized legal needs arise, including in closely regulated industries like alcoholic beverages and financial services.
A one-size-fits-all will template from an online service is unlikely to address the nuances in, for example, a complicated divorce settlement that must balance the wishes of conflicting parents. In contrast, an attorney would take the time to understand the family’s dynamics and craft a will that reflects their specific circumstances and intentions.
The challenges to DIY legal services providing customized solutions can lead to significant future problems, weeks, months, or even years after execution of a legal document. If a legal instrument fails to account for your unique situation, it could lead to loss of revenue, lost customers, or expensive litigation down the line.
Issue 3: The Complexity of Legal Documents
The law is a complex field that requires years of education and experience to navigate effectively. To become an attorney, a candidate must obtain an undergraduate degree and juris doctorate and then pass a comprehensive state bar exam. This education and training equip attorneys with the skills necessary to draft precise and legally sound documents tailored to their clients’ needs.
Legal documents are often filled with technical language that can be difficult for the untrained eye. This complexity is not arbitrary; it reflects the need for precision in legal matters. A poorly drafted clause can have significant consequences, potentially invalidating an entire document. Something as “small” as a missing comma can completely alter the intended meaning of a contract clause.
When using DIY legal services, you are responsible for understanding and completing these complex documents independently. While the platforms may provide some guidance, they cannot match the expertise of an attorney, and they cannot provide legal advice. If you make a mistake or overlook an important detail, the consequences could be severe.
In contrast, an experienced attorney can guide you through the process, ensuring your documents are completed accurately and suited to your needs. They can also explain the implications of various clauses and help you make informed decisions about structuring your legal agreements. This personalized attention provides security and peace of mind that is absent with DIY services.
When Are DIY Legal Services Helpful?
While the risks associated with DIY legal services are significant, they can be useful in some situations, particularly for more straightforward legal tasks. Generally speaking, the lower the stakes of the legal matter, the less risk is associated with using a DIY service. For example, these platforms can be effective for filing routine paperwork to incorporate a small business as a sole proprietorship or limited liability company (LLC). In these cases, the legal requirements are relatively straightforward, and the potential consequences of an error may be less severe.
Similarly, DIY legal services can be helpful in securing intellectual property rights, such as trademarks or copyrights, for relatively simple creations. The process for filing these applications is often more formulaic. This is somewhat analogous to California’s system for seeking domestic violence or civil harassment restraining orders, where the application and related documents are submitted on forms intended to allow applicants to seek protection without being forced to retain an attorney. However, even in simple cases, consulting an attorney can help to ensure your application is complete.
The Value of Professional Legal Representation
While DIY legal services may seem attractive for those looking to save money, they come with significant risks that can ultimately lead to greater costs and complications. The law is complex and constantly evolving, and legal documents must be carefully crafted to reflect your specific needs and circumstances.
One of the key advantages of working with an attorney is the ability to obtain legal advice tailored to your specific needs. Legal advice goes beyond the mere drafting of documents; it involves a comprehensive analysis of your circumstances, goals, and potential risks. This level of service is something that DIY legal platforms lack.
In most cases, the cost of hiring an attorney is a worthwhile investment that can prevent future problems and provide peace of mind. Your assets, your business, and your family are too important to be left to chance. Working with a licensed attorney ensures that your legal documents are accurate, up-to-date, and tailored to your unique needs.
Michael McMahon is a Partner in Carmel & Naccasha’s Litigation Practice with a focus on business, real estate, employment and public agency litigation, in addition to insurance defense and corporate and business transactions. Mike can be reached at (805) 226-4148 or mmcmahon@carnaclawcom.
Trent Bunker was a summer intern at Carmel & Naccasha and currently a senior at Tufts University. He plans to attend law school at Harvard Law School upon gradutation.
About Carmel & Naccasha
Founded in 2004, Carmel & Naccasha has offices in San Luis Obispo and Paso Robles. The firm’s lawyers focus their practice and provide exemplary client services in the areas of business transactions, real property, land use, commercial and employment litigation, trusts and estate planning, municipal law, and insurance coverage. For more information about Carmel & Naccasha, visit the website at www.carnaclaw.com
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Published November 20, 2024
