The High Price of Do-It-Yourself

Over the past few years, pre-printed legal forms have become widely available at office supply stores and on the Internet. LegalZoom operates a website that offers various legal forms that allow customers to prepare various documents including those necessary to start a business, rent a house or draft a will. Their website is fairly sophisticated and offers forms that are tailored to the laws of your specific state. I think there are many legal documents that don’t require a lawyer to draft. A commercially available legal form is probably more cost-effective and efficient for some legal needs. For instance, a basic sales agreement, a residential lease or business incorporation are generally straightforward and a commercially available form may be the best solution. Providers such as LegalZoom can provide a valuable service for these types of legal needs.

However, like any do-it-yourself project, there are limits. I’ve watched enough HGTV where I’m comfortable re-wiring a light switch or repairing drywall. But, I’m not about to replace the roof or pull out the electrical panel. The problem is when a non-lawyer attempts to pull off the legal equivalent of replacing a roof.

I was recently involved in a case about the valuation of corporate securities. The entirety of the case came down to the meaning of four words that were not defined or clarified anywhere in the stock restriction agreement. The company’s founders drafted the documents themselves when the business was started years ago. However, they never had a lawyer look at the documents or revise them. The interpretation of these four words meant a difference of several million dollars in the valuation of the company’s securities. Similarly, The Supreme Court of Florida recently issued an opinion in a probate case that spurned almost 5-years of litigation because the testator used an off-the-shelf pre-printed legal form to draft her will. Justice Pariente noted the substantial cost ultimately incurred compared to the minor amount saved as a result of using the pre-printed form.

I’ve litigated numerous cases where I wish the client would have called me when they were drafting their legal documents (or at least called me before the need for litigation arose). I’ve been in the courtroom when a judge looked up with a confused look on his face after reading a corporate governance document and asked, “Who drafted this thing?” And, trust me, you don’t want to be the one sitting at the defense table that drafted that “thing”.