Why an online “document” or “legal forms” vendor is no substitute for legal advice

21 Dec

We have seen an increasing number of “legal forms” vendors spring up across the internet.  In a difficult economic climate, many of these vendors appear to cater to the fear of consumers that when or if they need an attorney, it’s going to be costly.  For individuals who need a will to provide guardians for their minor children or establish a distribution for their estate assets, individuals hoping to form a new business or corporation, or those who wish to lease commercial space for their business, the opportunists who offer forms to “fill that need” are a dime a dozen, which is ironically closely linked with the value their forms bring.

Some individuals will always make their decision to buy any good or service based on a price, while overlooking value.  This is why you can find everything from cars, to furniture, to medications, to tax advisors, to doctors, to attorneys at rock bottom prices.  As we all know, low price doesn’t always mean value, just as the converse isn’t necessarily true (that the most expensive is the best).  The cheapest products, whether they are goods or services, can sometimes be the most expensive in the long-run, if the product fails, doesn’t live up to the consumer’s expectations, or proves to be inadequate.  This couldn’t be more true for legal forms.

What many consumers forget when they call an attorney to discuss the cost or process involved in crafting an appropriately tailored document or contract, whether it is a will, a sophisticated or comprehensive estate plan, a real estate lease or purchase agreement, a set of business formation records or business sale agreement, or other transactional or advisory services, is that the form the consumer wants to have drafted is only a small part of the equation.  The form is the ultimate product, like the medication a doctor prescribes.  Simply purchasing low cost forms or medications is not equivalent to obtaining legal advice from an attorney for a legal issue or receiving the diagnosis and recommendations of a doctor for a medical issue.

The only way to get to a form or document that best serves the need of a client is to have some degree of dialogue, information gathering, or decision-making, between attorney and client.  That’s the same reason doctors want to review medical history, evaluate a patient and make a diagnosis before prescribing treatment; it’s the same reason a car mechanic wants to see or hear the car before telling you what part to buy.

Case study:

In recent months, I’ve seen a litany of examples of extremely poorly drafted and unsuitable/unusable forms from some of the most well-recognized internet forms providers.  In one scenario in particular, the form the client wanted me to review (asking in effect for a second opinion for the form they purchased online) was a contract for deed that was not compliant with the Minnesota laws regulating what constitutes an acceptable and recordable contract for deed. 

Not only was it not recordable, but the client was left unaware of key issues that needed to be considered, negotiated, and disclosed before signing/executing such a contract.  This is only one of many scenarios I’ve seen first-hand where a client thought the form they purchased would fill their need, only to find out that reviewing and revising that form to address their situation and comply with state law would be more difficult and costly than had they simply started with a competent attorney in the first place. 

The point of this article isn’t to say that it isn’t possible to get an acceptable or potentially valuable form on the internet for a specific transaction, nor is it to imply that all attorneys are adept at drafting or negotiating perfect contracts.  Instead, it is this author’s hope that before paying for a prescription to a problem, consumers who need legal advice will recognize the need for and value of having a proper diagnosis and treatment plan, to make sure the right medication is being offered for the right circumstances.

Before prescribing your own medications and buying them online, it’s prudent and well advised to see a doctor to have an appropriate evaluation, diagnosis and treatment plan.  Similarly, before purchasing a form off the internet for a transaction or situation that may have specific and significant legal consequences or risks, it’s prudent and well advised to hire an attorney to obtain appropriate advice and counsel in connection with such a form or contract.

This blog entry is written by Brad Boyd, a Shareholder at Thomsen Nybeck. Brad is the chair of the firm’s Transactional Group, and his practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law, and Wind Energy Law.  Brad provides legal advice, guidance, and representation related to risk management in a wide variety of real estate and business law matters.  He is counsel to the Minnesota Association of Realtors, many individual Realtors and brokerages, business clients and individuals.

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