The Hesitant Legal Services Consumer
No Budget, Go on a Handshake
  • Slide 01
  • Where there is no contract, there is no compass or guidance when an issue arises in the business relationship. The parties' memory of the substance of an agreement changes over time (sometimes innocently), as do their monetary and personal interests.

    You need to pin down what exactly the agreement is now. Oral contracts can be enforceable, but they are sometimes hampered by these same issues. You can achieve raised awareness of a variety of potential future issues, dramatically reduce differences of memory and opinion, and develop much greater comfort and certainty, with an attorney-drafted written contract based on your business lawyer's advice. If the arrangement is worth tens of thousands of dollars or more to you, it is certainly worth spending a modest fraction of that amount to have the contract memorializing it prepared correctly and professionally, and to thus know that it protects your interests.

We can sign their agreement
  • Slide 02
  • The idea of obligating your business to another company's contract on-the-spot without having sufficient opportunity to review it can be stomach-turning. It should be! Going ahead and signing it without negotiation might make you appear powerless and set the stage for further dealings where your influence will be discounted. Also, you are quite aware that the strategic partner's standard agreement is almost certainly favorable to the strategic partner.

    You might at least say you will review the agreement later so that you don't appear to be a total push-over. Given the length of your to-do list and the fact that no one else is there at the office with you at 7:00 p.m. to discuss the agreement when you can finally have a look, "reviewing the agreement later" may very well mean looking at it for five minutes and signing it to get it off your desk.

  • That result is understandable, but worrisome. There were some parts of the contract that weren't clear and there was a lot of legalese in it; but everyone knows what was basically agreed, right?

    Almost certainly not. You should not commit to any agreement without an experienced second set of eyes on it and some discussion of the issues presented. A good business lawyer is, in fact, a business lawyer, and will not only interpret the legal terms for you, but will add valuable advice about business decisions to be made that might have been obscured.

Find an Internet Form
  • Slide 03
  • Internet Contract Scavenging

    A template contract you find on the Internet was not crafted for your individual needs. It has no tailoring for the overall commercial context or specifics of your transaction. You simply cannot fill in the blanks and receive the protection you and your company need.

    You don't know what major provisions may be missing in a form agreement. They may relate to the laws of the jurisdictions in which the contract will be performed, the particular kind of goods or services that are its subject, or various legal or corporate formalities. In any case, it is very dangerous not to know what issues have gone unaddressed, because they will inevitably surface.

  • Alternatively, are there clauses already in the template legal agreement that should not be there? Is there something inapplicable to your situation or harmful to your position? Is there an unenforceable section that invalidates the agreement because of the specific laws to which you and your operation are subject?

    The major questions about Internet contract forms are really these:

    • Who is vouching for the quality, sufficiency and enforceability of the Internet template agreement you find?

    • When a serious liability question arises months down the road, who do you go to for professional interpretation of, and formal legal advice regarding, a form contract from "Author Unknown" (who may or may not have known what he was doing in the first place)?

  • Lawyers Just Use a Form Contract, Right?

    It is correct that a good business lawyer may often start from an existing document to create the work product you need. You benefit from this, and it's not a "form agreement" your lawyer found in the back of an American Bar Association magazine. The predecessor agreement was professionally tailored for a certain kind of transaction and particular circumstances, and will, apart from its basic skeletal structure, be re-worked top-to-bottom for yours.

    Imagine how long it would take (and how much you would have to pay for) the preparation of a 40-page agreement to sell your company if the drafter started with a blank piece of paper and created each provision from scratch. After all, you want your lawyer to have some first-hand familiarity with projects like the one you are bringing him, so it would follow that he should have some skeletal material from which to start.

  • LegalZoom and D-I-Y Legal Services

    You may have heard advertisements for various "do-it-yourself" legal services companies, and wondered if you could save money and get an equal result by using them instead of hiring an attorney. Classic "you get what you pay for!"

    First, pay attention to the real-life small print. There, each of these companies tells you that that it is not a law firm, and is providing you "self-directed" document preparation services based on information you supply. LegalZoom "cannot provide legal advice, and can only provide self-help services at your specific direction" - this is literally what their website says! Read: "If you're buying our basic service, you are on your own after we sell you this auto-generated document."

  • You are not getting input or advice from a legal professional – you are getting a fill-in-the-blank piece of paper that cannot possibly be conversant with your enterprise or address all the particulars of your situation. The automated interview questionnaire used by these services may not ask all the right questions, and you may inadvertently provide incorrect answers to those questions the site does ask. Do you really know how using this document will affect your rights and responsibilities? What if you need to negotiate or amend the instrument later after your purchase it? What if someone calls its legitimacy or enforceability into question?

  • The Problems Created

    The most important point here is that a random template agreement found on another company's website or a form purchased from a do-it-yourself ("D-I-Y") legal document preparation company do not come with the most important component of legal services provided by an attorney - individualized discussion of your questions, and personalized advice and strategy geared for both immediate needs and big-picture outcomes.

    Of similar concern, it takes too much of your time as a key person or executive of your company to delve into the review, negotiation, and administration of contracts (and that's when someone else is doing the actual contract drafting). It can be a tremendous drain on your time when the operation and growth of your business should clearly be the higher priority.

  • Performing a D-I-Y job on legal documents is almost always a save now, pay (significantly more) later proposition. The only questions with variable outcomes are: How bad will the resulting problems be? And how much will you pay later (in both time and money) to fix them and then get the work product you should have had initially?

OK, We Might Need a Lawyer
  • Slide 04
  • There is still pressure "not to get legal involved" because all parties to your transaction want to get it inked quickly and without undue expense. Attorneys slow down business deals, don't they? Everyone wants to get moving immediately, start working together and generate revenue. After all, some of the terms can be worked out later, and everyone believes the person next to her is professional, competent and like-minded enough to resolve any issues arising going forward. Isn't that right?

    Have a look at the best- and worst-case outcomes.

Use the navigation boxes at right to explore Richardson Sixth's systematic guidance under this scenario.

The Hesitant Legal Services Consumer