Breathe A Sigh Of Relief - There’s One Less Thing To Worry About! | Why I recommend Legals By Design® over templates!
When it comes to legal documents, many business owners make the mistake of treating them like any other DIY project—grabbing a generic template, filling in a few blanks, and hoping for the best. However, unlike assembling a bookshelf, legal templates could leave you vulnerable to costly mistakes. As someone with over 12 years of experience as a litigator, I’ve seen businesses sued or embroiled in legal disputes for one simple reason: they didn’t have the right legal documents in place.
Here’s the harsh reality: contracts get challenged, disputes arise, and no two businesses are the same. If you’re relying on generic templates for your legal protection, you might be missing critical elements that could protect your business. Below are four major pitfalls of using templated legal documents, and why your legal foundation should be as strong as any other aspect of your business.
1. Lack of Personalisation and Professionalism
Your legal documents are a reflection of your business. When they are professionally tailored, they not only protect you but also help set you up for success by exceeding client expectations. Well-drafted legals build trust, align with your brand, and ultimately convert prospects into paying clients. However, generic templates often lack the necessary personalisation.
How you refer to your business in the legal text—whether as "we," "us," or by your business name—should align with your branding. Additionally, generic legalese like "herein referred to as" or "aforesaid clause" can make your documents feel cold and impersonal, potentially turning off clients. Your legal documents should leave you feeling proud, not confused or uneasy.
2. Tailoring for Industry-Specific Needs
Each industry has its own set of norms, risks, and specific requirements. A template downloaded online will likely only include generic terms like party names, dates, and payment information. What it will probably lack are industry-specific provisions that could be critical for your business. For example, if you're an interior designer, how do you deal with procurement or custom purchases? Do you include clauses to handle scope creep, where the client requests more work than originally agreed upon?
If your template doesn’t cover the nuances of your particular industry, you could find yourself facing unexpected legal challenges. Payment terms, for instance, need to be more than "issue an invoice and get paid." You might need provisions for stopping services if payments aren't made or guidelines for charging interest or legal costs.
3. Warranty and Liability Protection Clauses
Depending on your business and the services you provide, you may need specific warranties and liability protection clauses. A generic template often includes one-size-fits-all clauses that might not adequately protect your business. The scope of your warranties, as well as your liability limitations, should be carefully drafted to suit your business operations. This is particularly true for creative or consulting industries, where the scope of services and client expectations can vary greatly.
4. Enforceability: The Risk of a Worthless Contract
Imagine this scenario: you’ve been using a templated contract, and a client decides to dispute your agreement. You feel confident your legal document will hold up, only to find out it’s not enforceable. Missing provisions, incorrect wording, or even sending out terms and conditions in the wrong order can all render your contract worthless in court.
I’ve seen businesses send out agreements that clients haven’t signed, but because a deposit was paid, the business assumed it was okay to proceed. When the agreement was later challenged, it didn’t hold up in court. That’s the danger of using a template without fully understanding how legal contracts work.
The Bottom Line: Don’t Tempt Fate
Many business owners tell me they’ve been lucky so far with no legal issues, but "hoping for the best" isn’t a strategy I can recommend. Your legal documents are foundational to your business, much like the foundation of a house. You wouldn’t ask a builder to cut corners on the foundation, and the same goes for your legal documents. Relying on templates is tempting fate.
DIY might be fine for home projects, but not for your legal documents. Get the legal foundation of your business right by seeking professional help to create tailored, enforceable, and industry-specific contracts. It’s the smart investment that will protect your business in the long run.
By understanding the pitfalls of templated legal documents and investing in professionally tailored ones, you’ll have peace of mind knowing your business is well-protected.
Remember: DIY is for Bunnings, not for your legals.
If you’re interested, I talk more about this topic in Episode 180 of the Rise Up in Business podcast - 4 things your templated legals could be missing.
Be sure to reach out here if reading this has made you feel uneasy about your documents. I offer a judgement-free space, so if you’d like me to help you, let’s make a time to chat.
