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Blog >> Choosing Form(s) over Substance: The Dangers of Using Online Legal Forms



Good business owners always look to save money and increase their bottom line. So it is understandable that, when facing the need for a contract or other legal documents, many business owners seek to avoid the financial commitment of retaining an attorney and paying his or her rates by turning to the Internet for help. There are numerous websites, such as LegalZoom, that provide boilerplate legal documents allowing you to "do it yourself." However, using these one-size-fits-all documents without the advice of an experienced business attorney can result in missed opportunities and increased exposure, which cost substantially more in the long run. For this reason, business owners should hesitate before trying to draft their own documents using online forms.


Websites are not a replacement for an attorney

Legalzoom offers a wide variety of forms for businesses to use, including formation filings, operating agreements, corporate filings, compliance reports, various types of contracts, license and permit applications, commercial real estate documents, among many others. While this array of documents may seem to be comprehensive and cover all of a business's legal document needs, providing documents without any counsel or guidance leaves owners at serious risk of the following issues:


1) No oversight. For example, a website may offer forms to create a limited liability company (LLC), an S corporation, and a C corporation, however the website cannot advise you which of these entities is the best option for your business. Choosing the wrong type of business entity can have serious tax and legal implications and can lead to unnecessary liability for owners in the future.


2) No tailoring to specific needs. Additionally, the contracts that govern every business transaction should be individually negotiated and drafted to ensure that they address any important and unique details of the transaction. Many business owners may not foresee potential legal issues and, therefore, may not realize the need to include certain provisions in a contract. In such cases, your best interests may not be adequately protected if the other party fails to fulfill their end of the bargain. Anytime you use a boilerplate contract, you may face complicated and expensive legal disputes down the road.


3) No understanding. Perhaps the worst risk of all is that a business owner does not understand the nuances of the legal forms he or she fills out. These forms usually are complex and filled with legal jargon that can be confusing to the average person. It takes an attorney three years in law school and years of practice to comprehend the import of these minute details. As a business owner, you do not want to put yourself at risk because you fail to see the importance of where a comma is placed in the sentence.


The Legalzoom website, in fact, includes a specific disclaimer that the service should not be considered to be a substitute for the services of an attorney. It also states that any legal information provided on the site may be inaccurate or out-of-date.


Many business owners believe that it is too expensive to have an experienced business attorney on retainer. However, trying to navigate legal matters on your own can often lead to issues that cost significantly more to solve. Having the advice and assistance of an experienced business attorney who has a thorough understanding of California law and can skillfully draft all necessary legal documents is often the most cost-effective approach for any business owner.


If you own a business and do not have have the counsel of a qualified business attorney, please do not hesitate to call the Law Offices of Nate Kelly at 415-336-3301 to find out how we can help you. We offer affordable pricing and the highest quality of business representation so that you can achieve your business goals.



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