Buyer Beware: The possible pitfalls of using online legal documents
After investing countless hours in your business, guaranteeing your services, products and business practices are superb, why would you use a cheap legal document to protect your assets?
The popularity of online legal document sites has skyrocketed over the last few years, with companies like FindLaw and LegalZoom leading the way. A quick Google search provides access to all kinds of legal documents to be used for personal or business situations, but with so much at stake it might not be a good idea to draft important papers without legal advice.
Attorney Jaelynn Jenkins, with Fetzer Simonsen Booth Jenkins, thought she’d give it a try and purchased a basic will online for $69. On the plus side, it was affordable and convenient, but that’s where the accolades end. “The site had lots of legal terms that are not defined,” she says. “Before law school, I wouldn’t have known any of this terminology.”
The inability to decipher legal terms can lead to an incorrect or invalid document. Even a small misunderstanding could have unforeseen consequences that could make your simple, online document a major nightmare. Jenkins says most online sites don’t have attorneys reviewing the documents. While they might have a person checking the data entry for misspellings, no one with a legal background reviews the document itself.
In fact, most online document sites have disclaimers that state the company cannot provide legal advice, is not a law firm, is prohibited from providing any recommendation regarding legal rights and is not permitted to practice law. This allows potential litigious issues to fall through the cracks.
Jenkins says buying an online legal form is like purchasing a jacket off the rack. It might fit OK in some places, but the shoulders might be too big or the sleeves too short. By hiring an experienced tailor, the jacket can be custom-made to fit perfectly.
“Getting something mass produced isn’t going to fit your needs,” she says. “Maybe start out with a simple document that you can update later. Then you can review it and get something tailor-made for your business.”
Using online forms as a starting point could be a useful way to begin the conversation. Maybe you’re leaving for a vacation to Belize and want some type of will in place. An online document might handle that requirement until you can create a thorough will with the counsel of an attorney that covers every situation.
Business owners run into similar problems. Entrepreneurs might need protection up front and a quick pre-made form can address certain aspects of business start-up. But Jenkins cautions that a cookie-cutter document will not serve you well and won’t allow for all the variations that arise.
“You’ll have to hire an attorney who will end up cleaning the messes that the document didn’t cover. With these documents, you don’t get specialized information. When things fall apart you could be left with a huge bill,” she says.
The court system is filled with legal disputes that arose due to an incorrect filing or a situation where a contract wasn’t specific enough. An attorney can bring up scenarios you hadn’t considered—like what happens when your business fails or what happens to your family-owned company when you divorce?
Issues like bankruptcy, power of attorney, trusts, intellectual property and succession plans need to be spelled out in detail to avoid long court battles that could evaporate any profits and earnings a company has made. Investing some money and time into protecting assets could pay off big in the long run. A well-written legal document offers a much-needed level of protection for business owners.
Individuals make up the majority of users purchasing online legal documents, followed by business owners. They usually turn to these websites because they don’t know they have other options. Users assume if they work with an attorney, the documents will be expensive and difficult to put together, but depending on what is required, it might be easier than expected.
Several organizations offer low-cost or free legal consultations, including the Utah State Bar, the Legal Aid Society of Utah and Utah Legal Services. You can also talk to friends to get a referral or visit licensedlawyer.org to find an affordable attorney.
“These [online] industries are so big because there is an ‘absence of justice’ where people think they can’t afford to get real legal help,” Jenkins says. “These sites may be good for a simple will, with nothing involving property or business, but for everything else, find a good lawyer.”