The dangers of a DIY legal mindset


There’s an old-school belief about starting and running a business that says business owners should do everything themselves in order to save money.

And there are certain things – like sending invoices or following up with leads – that you can certainly do on your own if you’re a small or newly launched business.

But doing your own legal work is definitely not one of them. Cutting corners on legal services, especially when it comes to drafting contracts, can cost business owners big time down the road. We talked with corporate / commercial lawyer, MaryRose Ebos, to expand on the dangers of a DIY legal mindset.

The risks of using do-it-yourself (DIY) legal templates

DIY legal templates for small businesses and start-ups have become incredibly popular in recent years because of how cheap and easy they are to set up. The premise is that there’s no need to hire a trained lawyer when you can draft a commercial contract in minutes for under a hundred bucks.

The problem is these templates are not customized to your business or your industry. They may also fail to address the realities of recent economic events impacting businesses such as a pandemic, national internet outages or supply chain challenges. 

As a result, there’s a serious risk the language used in the template won’t protect your organization from potential legal action while you cope with these challenges. A missing sentence, a wrong word or even misplaced punctuation can have catastrophic legal consequences for your business. 

Commercial contracts are your revenue – ensure they’re protected

For many business owners, commercial contracts are their lifeblood. But when they’re first starting out, founders want to get the contracts drafted as quickly and cheaply as possible so they can start earning money. And that often means choosing to forego a lawyer.

But what many business owners miss out on is the next stage of the process – investing in the contract relationship with the customer over the long term, no matter the challenges your business may face. 

The longer you and your customer have a relationship, the more opportunity for misunderstandings and disputes to arise. Getting a qualified lawyer involved in drafting your commercial contracts from the beginning will help ensure your contract has been drafted to protect your relationship with the customer over its lifespan. 

Your lawyer can identify current or future “holes” that might allow a customer to require additional services from you without paying additional fees, or allow a customer to make claims against your business. A lawyer can assist you in “plugging” those holes by amending these clauses to ensure your relationship with the customer remains profitable and protects you from potential litigation in the future.

The true cost of not working with a lawyer

The law is not an area of your business where you want to be lacking in surety. The law is structural – it’s the underpinning of your organization. And it needs to be done by a trained expert. In the same way you wouldn’t try and fix a structural issue with your house on your own, you shouldn’t be trying to manage the legal work that supports and upholds your business.

The reality is that doing legal work yourself will actually cost you more in the long run. And it’s not a matter of if you’ll get stung by poorly drafted contacts, it’s a matter of when. The number of claims against your business will grow, which will in turn result in higher insurance premiums. When lawsuits do happen, you’ll be faced with mounting legal fees to pay that likely could have been avoided if a lawyer had drafted your contracts in the first place.

[Read our blog post: How to choose a start-up lawyer]

That’s not to mention the reputational damage you’ll incur. Building a strong brand reputation is essential for the long-term success of your organization. When you operate without the proper legal documents and processes, it will reflect poorly on your brand.

If you end up with legal problems down the road, the ramifications of those legal issues will certainly hurt your brand’s image in the public eye. That damage can be difficult to turn around, and some businesses never recover.

Why hiring a lawyer is worth the investment

Working with a lawyer ensures your legal work is done properly and by the book. A lawyer who is especially skilled at wordsmithing contracts will help protect your profit margins and your relationships with your customers. 

This means your contracts will not only be accurate in terms of the language they use, but they’ll also be enforceable and defensible in court. 

Lawyers also have a better understanding of local, provincial and federal laws so they’ll be compliant with these regulations, and they’ll also know what your rights are as a business owner, so you don’t unintentionally waive them in your contracts. 

Finding a long-term legal partner

If you forego DIY legal work in favour of using a lawyer, there are still ways you can save money and maximize the value you get from your legal services provider.

Firstly, don’t look for a transactional lawyer – find a legal partner that will be with your organization for the long term. Lawyers today aren’t just focused on law, they need to be business-minded as well so that they have an understanding of your team, operations, processes and the different personalities within your business. 

The more intimately a lawyer understands your business, the better legal advice and service you will get.

[Read our blog post: Why lawyers with in-house legal counsel experience are so valuable]

Secondly, make sure you’re only being billed for the legal work that’s being done and not friendly phone calls or coffee chats. It’s worth looking for firms that have support services behind them, like law clerks and paralegals, so they can assign lower-value legal work to junior lawyers and focus on the higher-value projects, which will help you reduce your bill. It’s also worth looking at boutique and alternative law firms that offer fractional legal counsel at reduced rates with a high level of service.

[Read our blog post: Do high law firm rates equal high quality?]

Business owners don’t have control over a lot of things that impact their business – the supply chain, internet outages, financial markets, inflation and the list goes on. But they do have control over the legal aspects of their business – and it pays to make sure it’s managed properly.

Don’t want to do the legal work yourself? If you’re looking for a professional to help with your legal needs, we can help. Caravel Law is an alternative legal firm with over 80 qualified and experienced lawyers. Get in touch with our team today to find out more.

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