Award-winning solicitor and founder of A City Law Firm Karen Holden explains the pros and cons of online legal templates.
The internet affords many businesses a wide range of online resources, information and often cheap downloadable legal documents, for a fixed fee. We understand the attraction of easily accessible and affordable documents compared to those drafted and tailored by lawyers. However, is this right for your business?
There are pros and cons to everything. Legal document templates are obviously cheaper and faster than bespoke documents, but can one template truly be assembled to fit all? More importantly, do you understand the consequences of signing up to its specific terms and conditions?
Templates can be ideal for start-up businesses and standard legal documents, such as non-disclosure agreements, tenancy agreements and website policies. But, as your business grows and changes, they may not adapt with it to adequately cover everything. Worse, you have an outdated, incorrect document that binds you to erroneous and restrictive terms.
The benefits of online legal templates
- Easy and quick to download
- Sign up to instant protection (sometimes better than nothing)
- Tailor them yourself, so long as you understand the construction of the terms
- The cheapest way to obtain the documents
The potential drawbacks of online legal templates
If something goes wrong, a dispute arises for example, these documents will be scrutinised and used to challenge you. As such, any gaps or weaknesses not known until then could cause serious issues for you down the line.
By meeting with a solicitor, who takes the time to understand you and your business and thus understand your short and long-term goals, bespoke documents can be drafted to fit around your requirements and anticipated changes. It also means they can be updated and adapted as your business evolves.
With legal advice, you will not accept accidentally, erroneous or restrictive terms you perhaps did not fully understand or mean to adopt.
Tailored legal documents, with advice, do not have to be expensive. Reputable firms offer start-up and scale-up packages, monthly retainers and fixed fees. Bear in mind that it is not the document you are not paying for, but the advice and the security this offers you: someone to guide and support you as things arise. In fact, done correctly, these documents can save you money in the future.
Which documents are not suitable to be downloaded online?
As a minimum, we recommend that your contractual terms and conditions, shareholders’ agreement, directors’ service level agreements and data protection policies are drafted bespoke to you. These are lengthy documents, and essentially your protection against disputes. They are often required for investors, so must cover you for all eventualities and be as tight as possible.
A client or departing founder or director will look for loopholes or exploit weak terms and this could result in real financial harm or loss of clients or confidential data. Templates can only cover general terms and so won’t be specific to your products or services, delivery criteria, cashflow terms and the restrictions required to prevent competition directly with your business.
GDPR is a big headline concern so you need to be sure what you put in place is not only correct, but that you can commercial monitor and enforce it. As such, you need to understand it, align your contracts accordingly and update it as things change.
Employment contracts and handbooks are often downloaded. While these are tied to employment regulations, you may want to make changes to this (such as unlimited annual leave or provisions around bad leavers, monitoring emails and data), address home working, extend probations or offer various benefits. Get it wrong and it could be costly. Get it right and your staff are happy, but you are also protected in the event they leave or something goes wrong.
The benefits of legal advice
You need tight, bespoke documents to protect yourself against disputes. You also need solid legal documents, in the long run, because:
- Clients and associates will know that you have set the tone and your strict terms for cashflow, adherence, and to govern the relationship and set you up as the professional
- It protects your confidential data and client details, not only for GDPR purposes, but against staff exploitation or cyber issues
- Investors will be more impressed if you offer them a set of documents that are professional and clear, making the due diligence process slicker and more likely to succeed
- You will cover off things you may not have thought about, as your lawyer’s experience and expertise will feed into this
- You have a clear platform on which to build your business, where founders, directors, staff and investors all understand the terms and goals
Whichever area of business you work in, it’s essential to ask yourself how much you could lose if your documents are incorrect or contain a loophole.
Hiring a lawyer offers you experienced advice, protection against matters you may not be aware of, support and guidance as you expand and – if you choose your advisors wisely – a friendly face to help you make the right decisions.
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