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What's Wrong with Legal Documents Downloaded from the Internet?

Posted by Jonathan Krems | Mar 23, 2023 | 0 Comments

In today's Freedom Friday blog and email newsletter, I want to talk about something that comes up in so many cases and transactional matters that I get involved in, and that's legal documents downloaded from the Internet.  Not only do I get asked to review these almost every week, but many of the lawsuits that I get involved in on behalf of my clients come from issues arising from documents downloaded from the Internet.  So, in today's Freedom Friday blog and email newsletter, I'm answering the question, “What's wrong with legal documents downloaded from the Internet?”

Let's look at some of the reasons why businesspeople use legal documents downloaded from the Internet, and why these reasons may not be satisfactory:

The first reason why some businesspeople use legal documents downloaded from the Internet is to save money, or for cost reasons.  The problem with this reason is it's not a real reason to use documents downloaded from the Internet.  While you may save money in the short term by downloading a free or reduced price document online, you may be incurring legal fees later on down the road when you need to restructure your small business, or if litigation is necessary to move forward in your business.  For example, I've seen many LLC operating agreements that hold LLC members hostage (they can't leave the LLC or allow a member to leave, even by agreement), and I've seen many loan agreements that are supposed to be secured by some kind of collateral, but they are in fact, unsecured loans.  I've also seen strange clauses in various legal documents that hinder a lender as a creditor or hinder a business partner in an LLC or other business relationship.

Another reason why some businesspeople use legal documents downloaded from the Internet is because they want a “standard document.”  They think that the “cookie cutter” approach to legal documents is good enough for their small business.  Unfortunately, there are also problems with this approach, as well.  There is no such thing anymore as a “standard” business document, or a “standard” business.  Most small business owners start a small business because they want something unique and wish to somehow challenge the status quo.  That's why they've started their business.  Why should a business owner use “standard” legal documents when they're starting a non-standard business?  I don't know, but that's the problem with the “cookie cutter” approach and legal documents downloaded from the Internet.

A third reason why some businesspeople use legal documents downloaded from the Internet, is because they want to avoid using an attorney.  Sometimes this is related to the first reason, because some business attorneys are perceived to be expensive.  For instance, I charge my clients $500.00 to help form a single-member LLC, and included is the articles of organization, operating agreement, and their EIN number.  This does not include registered agent service, which is $150.00 annually.  Some people don't want to pay this much because it's out of their budget, and they are looking for a budget-friendly legal solution.  However, in some instances, the issue with attorneys has nothing to do with what the attorney might be charging.  In some cases where there is more than one business owner, they don't want to use an attorney, because one of the business owners knows the attorney, and the other(s) do not.  A concern might be who the attorney is representing --- is it the business or the individual owner?  A business lawyer must decide whether he or she represents an owner in the business or the business as a whole.  This is a critical decision at the beginning of a business venture.  If the attorney represents the business, the attorney cannot represent one owner against another, even in the case of a partnership dispute or LLC dissolution matter.  However, the attorney may represent the business against threats to the business, including issues arising from departing business partners who seek to harm the business by taking valuable intellectual property, client information, or financial information concerning the business.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

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About the Author

Jonathan Krems

Jonathan is the Founder and Managing Attorney of Liberty Legal Solutions, LLC, a law firm dedicated to building, protecting, and defending the business and personal interests of our clients in Oklahoma.  Jonathan's primary practice areas are business law, contracts and agreements, business liti...


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