In recent years, do-it-yourself legal sites have popped up with the premise of providing low-cost alternatives for some items traditionally done by law firms. As consumers try to find answers to their legal problems without breaking the bank, these DIY sites have become an increasingly attractive option for cash-strapped consumers. What are consumers to make of these sites? Do they actually provide a decent alternative for at least some of the legal services typically provided by lawyers? Or are they yet another trap for an unwary consumer? The popularity of DIY sites has increased so much that the U.S. Department of Justice and the Federal Trade Commission have recently lent their two cents on the topic. In a letter, the DOJ and FTC suggest that such websites may be a benefit to consumers by potentially providing access to those who would not otherwise be able to afford access and perhaps even lowering the cost of legal services.
While these are noble goals, consumers should be wary. Many consumers mistakenly believe that when they form a LLC or draft a will on one of these sites that they’ll receive advice from a real lawyer. This is not the case! In fact, the DOJ letter specifically states that such websites cannot provide legal advice. So the DIY sites essentially provide blank forms that the consumer completes. They’re legally prevented from providing advice that addresses the individual’s particular needs and cannot even tell the individual what form he should use.
So how is someone supposed to know that he will receive no legal help when using a DIY site? The DOJ answers this question by saying that the websites should have clear disclosure stating that they provide no legal advice and that they’re not a substitute for an attorney. In my opinion, if such disclaimers worked, we would all understand the terms and conditions of the latest iPhone app we downloaded. The fact is that consumers will most likely glance over such a disclosure without even reading it.
One might ask, “Don’t these sites help people by providing a completed document that a person can have his attorney review, thereby saving attorney time (and money) on the initial document’s preparation?” My answer is that they do not. Often, such an initial document will miss the complexities of the client’s situation, thereby requiring even more time and money to fix.
For example, suppose a brother wants to form a LLC with his sister to own a small business. She provides him some start-up cash. In this case, are there certain decisions that can be made by one of them and other decisions that require the consent of both? Is the sister’s investment an ownership stake or a loan? What rights does the sister have in the case of bankruptcy or default? If the sister gets divorced, does her ex-husband get management rights or just a share of the profit? The list could go on and on, the point being that a “simple” LLC is not always that simple. In such situations, it may be costlier to fix a bad LLC agreement (or go through litigation) than to consult an attorney in the first place.
One may argue that for people who can’t afford an attorney, a DIY site may be their only option – at least it’s better than having no help. In reality, however, that’s not the case. In fact, there are a number of options available for those who cannot afford an attorney – free forms from the Secretary of State website, legal aid, law firm pro bono services, law schools, the state bar, and others. A call to the state bar would likely result in a number of suggestions for free or low-cost legal help.
The entire debate about DIY legal sites reminds me of the last time I got sick. I searched the internet’s numerous medical information sites to check on my symptoms. Given that I have no medical training, I couldn’t tell if I had cancer or the sniffles. Thankfully for me (and the public), I’m not legally allowed to download a prescription of my choosing from the internet. My opinion – and it’s only my opinion – is that an individual should also not rely on DIY legal sites to solve their legal problems. Rather, one should speak to a licensed attorney or use one of the many free or low-cost legal services.