Should I use online legal services to draft business contracts?

Using an online legal service that produces form/template contracts for use by businesses or for other large contracts might seem appealing for small businesses looking to save money on legal fees. Upon first glance, these services are convenient and cost-effective, however, they come with significant risks compared to hiring a skilled business lawyer. Here are some key pitfalls to consider:

1. Lack of Customization & One-Size-Fits-All Contracts

• Online legal services may provide generic, boilerplate contracts that don't address your specific business needs.

• A good lawyer can tailors agreements to your industry, risks, and unique circumstances (e.g., intellectual property, liability protections).  

2. Potential Legal Errors or Omissions

• Online forms may contain outdated or incorrect clauses based on generic state laws, not your jurisdiction.

• Missing key provisions (e.g., dispute resolution, indemnification, termination rights) can lead to costly litigation later.

3. No Legal Advice or Strategy

• Online legal services state - and courts have upheld -- that they do not provide legal counsel—they just supply documents, meaning that if something goes wrong, you have no recourse.

• A lawyer helps you negotiate terms, assess risks, and strategize (e.g., "Should I sign this vendor contract as-is?") and can stay involved if there's a future dispute over interpretation of the contract. 

• A lawyer ensures compliance and can revise your contracts as your business grows.

4. Hidden Costs of Fixing Mistakes

• If a boiler-plate contract you purchased is later found unenforceable or flawed, you could easily spend far more on litigation than you saved by obtaining a cheap contract.

• Courts may interpret vague language against you (contra proferentem rule) if you don't include the correct language to avoid this.

5. Limited Protection in Disputes

• If a contract dispute arises, a company that just provided a boilerplate contract won’t represent you in court.

• A lawyer who drafted your contract can enforce it or defend you if you are sued.

Bottom Line

Using an online legal service to draft a contract is like using WebMD instead of a doctor—it should never take the place of a skilled attorney for anything worth agreeing to in writing. While it may seem cost-effective to use an online legal service, it often costs clients much more down the road, so it’s always best practice to have a lawyer review your or your small business's contracts.

Need help drafting or reviewing your contract? Reach out to us today to schedule a consultation!

Disclaimer: This blog provides general information and does not constitute legal advice. Any referenced laws or regulations may no longer be current and subject to change.