#180 - 4 Things Your Templated Legals Could Be Missing
DIY is for Bunnings, not legals.
I say this regularly, and there’s good reason for that: the amount of business owners using templates in order to save money is more than a little eye-watering.
I understand that with all the costs involved in running a business, there’s a certain allure to the convenience and cost-effectiveness of legal templates.
But trust me, after over 12 years as a litigator, I've seen just how badly things can go.
I’ve acted for many businesses being sued because most of the time, they didn’t know what they needed to. Their contracts were challenged because they unknowingly didn’t do the right thing or have the correct documents in place.
You name it, I’ve seen it - and I don’t want this to happen to you.
So to help you avoid getting caught up in any legal disputes, I want to take you through four crucial things that templated legals often miss - as well as the potential fallout if these gaps are left unaddressed.
1. Personalisation and Professionalism
Templates tend to miss one key factor time and time again: personalisation and professionalism. When crafted correctly, your legal documents can be one of the most powerful tools your business has. They protect your business, exceed client expectations and foster positive word of mouth.
However, if your legals aren't personalised, they won't reflect your brand or build the trust needed to convert prospects into paying clients. Generic templates loaded with legalese about "aforementioned clauses" won't cut it. Ask yourself: how proud are you to send out your current legal documents? Do they reflect your brand accurately?
2. Industry-Specific Tailoring
Another significant shortcoming of templated legals is the lack of industry-specific tailoring. Stock templates you find online are likely to be generic, containing only basic terms around the parties, the agreement, and payment schedules. Your business is unique, and your legal documents need to be explicitly tailored to reflect that.
For instance, if you're an interior designer, you’ll need specific clauses to handle procurement and custom purchases. Similarly, a scope creep clause is vital for creatives and consultants to define what constitutes a variation in the initial agreement and how additional costs will be handled. Without these tailored provisions, you risk misunderstandings, delayed payments and misaligned expectations.
3. Warranty Clauses and Liability Protection
The third overlooked area in templated legals is the inclusion of adequate warranty clauses and liability protections. The warranties you offer and the extent of your liability should be specifically outlined based on the services you provide. Generic warranties and liability limitations from templates just won’t cut it. If your legals are not properly tailored to your industry and specific service offerings, you leave yourself open to potential legal issues.
4. Enforceability
Last but by no means least, enforceability is a critical aspect that templated legals frequently lack. It's all well and good to have legal documents, but if they’re unenforceable, they’re as good as useless. Key provisions might be missing, or the sequencing might be incorrect, making it difficult to rely on these documents in disputes.
In the end, hoping for the best or sticking your head in the sand isn't a viable strategy when it comes to legal protection. Solid foundational documents are crucial to any business: you're not going to ask your builder to skimp on the foundation of your house to save a few dollars, so why do the same with your legals?
If you want to get a conversation started on creating tailored legals for your business, please reach out and shoot me an email or DM. Alternatively, you can sign up to my Briefing Notes newsletter via the link below.
I just love sharing these insights with as many business owners as possible - and I’d love that to include you!
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Tracey: [00:00:00] I talk a lot on this podcast and over on Instagram about why I say DIY is for Bunnings, not for your legals. My view hand on heart is that templates have no business being used for your legal documents. I based that off more than 12 years of experience acting as a litigator in court, acting for businesses, suing or being sued most of the time because they didn't know what they needed to know. They didn't do the right thing. They didn't have the right documents in place.
Contracts are being challenged. You name it. I've seen it. That's why I say templates have no [00:01:00] business when it comes to your legal documents.
In today's episode, I'm going to go a little more specific and I'm going to share with you four things that your templated legals could be missing. And these are really important. The first thing that templated legals tend to miss time and time again is personalization and Professionalism. If you're a long time listener, you will have heard me say so many times that your legal documents, if developed right for your business and if used correctly, can be one of the most powerful tools you have in your business.
Powerful to protect your business, powerful to set you up for success with your clients so that you're not just meeting client expectations, but that you're exceeding them. Powerful because they then lead to positive word of mouth and referrals, which in turn help grow your business, but powerful too, because they help convert prospects to paying clients.
But that is if they're done right for your [00:02:00] business. And part of that is personalising the documents so that they look like your business, they sound like your business and they're an extension of your business. And that in turn gives the impression of professionalism through and through. And if they're done right,the reason I say these documents ought to be converting prospects to paying clients is because those legals are building trust and they are completely consistent with the touch points that individual has had with your business so far, that by the time the person gets to the end of reading your legals, whether it's a proposal or an agreement or terms and conditions, They are busting to work with you.
This is where templates lack. I've never seen a templated document that's personalised and professional to suit the business. So things like wording, how do you like to refer to your business in your legals? Is it by business name? Is it I? Is it we? Is it us? Or is it the consultant? The [00:03:00] designer? What suits your brand?
Things like that need to be considered. And the way the documents are drafted and laid out. if you're seeing lengthy legalese in there about the aforesaid above mentioned clause, very common in templates, does that suit your brand? How do you feel when you read it? My test always with new business clients that reach out to me to have me help them with their documents is I ask them, how do you feel with what you've got in place?
And many will say to me, I feel yuck. I feel confused or it's awful. I loathe sending this out to my clients. I don't really understand what it means. Your legals absolutely should not be that. So when you've got tailored legal documents for your business that are personalised and professional, you should be really proud every time you issue them to your client.
So if you're using templates, ask yourself, how proud am I every time I issue these and do these reflect my brand? So that's [00:04:00] the first thing that your templated legals may be missing. The second thing that your templated legals are likely missing is tailoring to your industry and specific provisions that are important for what your business does.
I see very often stock standard templates that go out for sale, or someone's googled and downloaded something they've got for free and it has very generic terms around the parties, the agreement, some dates and what you'll be paying. What's often lacking are industry specific clauses and tailoring for how you do things in your business.
For example, if you are an interior designer or stylist, how are you dealing with your procurement or your custom purchases? How are you dealing with that? Procurement and custom purchases in my experience means different things to different business owners. And there's no right or wrong, but the provisions need to be tailored to how you do it in your business.
Some designers [00:05:00] refer to procurement for all purchases, whether it's throws, lamps, coffee tables, custom designed sofas. Others separate them and they'll have procurement for certain items and they'll have custom purchases for items that they're designing like that custom sofa. There's no right or wrong, but it needs to work for how you do business. And there's no room to tailor that when you're working with a template.
Another clause that I see missing for creatives and consultants predominantly is a scope creep clause and a variation clause. So sometimes in a template, you might see a very vague high level variation clause. If you ask us to do anything more than what we've agreed to, it'll be a variation.
But there's no defining what that variation is, how you make a variation request, how it's agreed to, and whether or not you're going to be entitled to charge more as a result of that variation. Those types of clauses really need to be tailored depending on the nature of the services that you're providing. If you don't, you're leaving yourself open to scope creep, which we all know as service [00:06:00] providers is very, very real.
Payment terms is something else that needs to be carefully considered. It's not as simple as saying, I'll issue an invoice and you'll pay it. Sure, let's hope that happens and that's great but when are you going to issue invoices? When are you entitled to? And what are your payment terms? And do you have the legal right to cease providing services if your invoices aren't paid?
Or do you have the legal right to charge interest? And if so, how and when? What about legal costs? If you incur legal costs or if you go to a debt collector, as some people do for outstanding invoices, who's going to be responsible for those costs? Those are things that need to be carefully considered and included in the documents to make sure they're working for your business and the way you do business.
As you know, there's no two businesses the same. So just because somebody else does something one way doesn't mean you have to, or doesn't mean you do, but that means that that templated document that you've purchased, isn't going to work for both. If you're not including clauses that work for your business, and if you're not including [00:07:00] clauses that are consistent with how you operate, you can get yourself into a whole raft of issues with clients due to misaligned expectations, misunderstandings, delayed payments, and very, very real scope creep with no right to issue additional invoices. So making sureyour legal documents are tailored for how you do business specific to your industry is really important.
The third thing that templated legals may be missing are warranty clauses and liability protection clauses specific to you. So the services that you're providing will determine the warranties that need to be included in your agreements and it will determine how far we can go in your liability protections.
So depending on your industry will depend on what it is you have to promise and guarantee and warrant and it will depend on how far then we can reach when we're drafting your liability limitation clauses. The generic one size fits all [00:08:00] one or two sentences, warranties and liability limitation clauses just don't cut it in any circumstances in my view.
So when you're buying a template, you've got no way of knowing whether or not these warranties suit how you operate and what you do, whether your liability really is limited to the extent that it should be.
And the fourth thing templated legals may be missing is enforceability. Ultimately, you want to make sure that if you need to, you can rely on your legal documents to protect you. So if a tricky situation arises, or if you end up in a dispute with a client, you need to know you can rely on your legals. You need to know they're enforceable. What I see all too often with templated legals is that they're not enforceable because they're missing key provisions.
They're missing key things that that business is required to disclose to their clients according to the consumer law, but that it is missing. [00:09:00] Or, I suppose the sequencing is wrong, which means because the business owner purchased a template or downloaded something online, they don't know what sequencing means.
They don't know how they're supposed to be issuing their quotes or proposals or fee estimates. They don't know what wording they need to include in that email. If they're going to attach terms and conditions, they don't know how to make those two work together. They don't know how to make those two form a legally binding contract, or they're sending out an agreement, asking for a signature.
The client hasn't signed, but they've paid the deposit so the business owner thinks it's okay to proceed and they get into a whole host of issues later when parts, if not all of that agreement are challenged. So enforceability is key. And if we don't get these agreements, right? If they don't have the provisions we need to protect the business based on the the specific services and based on the industry, and if they're not issued at the right time, in the right order, you can find yourself in a position where [00:10:00] you're in a tricky situation with a client and your agreement is challenged. And guess what? Because things were missing or because you've got the sequencing wrong, the agreement's unenforceable, the terms and conditions are unenforceable, which leaves you as the business owner in a position where you essentially have no legal document at all.
That's not a position any business owner wants to be in. It's just not worth the risk. And I'm all for lovely, fabulous stories where business owners reach out and say, I've been so lucky so far, Tracey, nothing's gone wrong. Fantastic. Let's not tempt it. Hoping for the best or sticking our head in the sand is not a strategy that I recommend or support. Thinking it won't happen to me is just too risky. There's no shortcuts when it comes to your legals. As I've said so many times, your legal documents in your business can be the most important tool you have.
They are foundational documents. So you think about when you're building a house, you're not going to say to your builder, Hey mate, [00:11:00] take it easy on those foundations. Take a few shortcuts to keep the price down. You are not going to do that because you know how crucial solid foundations are and your legal documents in your business are no different.
You now know how crucial and important those solid foundational documents are and you now know from listening to this episode and quite possibly many others, why I say DIY is for Bunnings, not for legals. I hope you have found this short and sharp episode helpful. I wanted to share this episode with you here, because this is something I talk about so often with new business owner clients when they reach out.
This is something I talk about so often over on my Instagram page. If you don't follow along yet, please do. I'm very active there. And I write about these types of things and give these sorts of insights and tips and guidance to my email list where I send my briefing notes once a fortnight to my list with messages just like this one and so much [00:12:00] more. If you're not on my list yet, I would love to see you there.
You can sign up via the website, and we'll include a link to the briefing notes sign up in the show notes. I absolutely love putting those emails together every fortnight for my list. I sit down and draft them myself based on what's current at the time, what's topical, what I'm seeing a lot of so that I can share those insights with as many business owners as I possibly can.
As always, so much for joining me. I really appreciate your time and I'll catch you next week.
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