I encounter this a lot in my practice: clients who pull a contract from the internet (or have ChatGPT create it), then send it to me to do a “quick review.” They think they’re going to save money by using less of my time.
Let’s be clear. That will not save a client money because I will still need to review that contract thoroughly. And I’m not rubber-stamping something a bot wrote. It’s often cheaper for an attorney to draft a contract from scratch or use a contract they’re already familiar with and tailor it to a client’s business, etc. Many attorneys won’t even look at a contract pulled from the internet. And it speaks to a larger issue that tempts business owners – to call the lawyer later rather than sooner. If you need a contract, you need a lawyer now.
Know Where Your Leverage is in a Contract
With regard to contracts, your greatest leverage exists before a problem arises. An upfront investment in a well-drafted, air-tight customer contract that can be used repeatedly is almost always worth it. Here’s why:
- It protects your business
- It sets expectations
- It reduces friction – over and over again.
Why I’m Not Down with Downloaded Contracts
Negotiating Leverage Goes Away
If you download a contract from the internet, begin negotiating on your own, exchange multiple drafts, and then call an attorney to “take a quick look,” most of your strategic advantage and negotiating leverage is already gone. By then, positions are anchored, concessions have been made, leverage has shifted, and the contract you are about to execute may not reflect your specific business model or contain sufficient provisions to protect your interests.
Now You’re Managing Exposure
At that point, you’re no longer structuring a deal – you’re managing your exposure, assuming it’s not too late. This approach rarely saves money in the end.
Good Transactional Legal Advice Matters Most Before Not After
Experienced transactional counsel is most valuable at the front end – before drafts circulate, before terms harden, and before expectations are set. Good contracts are designed intentionally from the beginning. They’re not repaired mid-negotiation. Strategy cannot be retrofitted easily once negotiations are underway. Engaging counsel late doesn’t just limit effectiveness – it often increases cost and friction.
Parachutes & Attorneys Don’t Mix
I’m not the attorney who parachutes in after the fifth round of negotiations to “just take a quick look” and validate, paper, or mitigate a transaction that was shaped without legal strategy at the front end. If I’m involved in a contract matter or M&A deal, it’s to structure the framework properly from the beginning – not to retrofit risk into a deal that’s already been informally agreed to. There’s a difference between saving money and postponing cost. The former is strategy. The latter is damage control.
Why Business Partners Need to Document Up Early – When You Like Each Other
Another issue I encounter a lot in my practice is business partners who have no documentation in place to define ownership, governance, financial rights/obligations, and exit mechanisms so the business – and the relationship – are protected before disputes arise. Starting a business with a partner is exciting – optimistic, full of momentum. That’s exactly when you should put a strong Operating Agreement or Shareholders’ Agreement in place – when you still like your business partner. Not because you expect things to go wrong – but because you’re smart enough to know life happens.
Putting Off Operating Agreements or Shareholders’ Agreements Will Cost You Later
A well-drafted Operating Agreement or Shareholders’ Agreement (not pulled from the internet) answers the hard questions before they become real problems. What if the honeymoon phase ends and:
- A partner wants out
- A partner is making unilateral decisions without your input or approval
- A partner stops pulling his or her weight
- A spouse becomes your unintended partner through divorce or unexpected death
And these are just a handful of issues to consider. If you haven’t addressed these issues on the front end, you’re not “saving money.” You’re deferring a much more expensive conversation. Planning for the future at formation of the business isn’t pessimistic – it’s smart. Plan while you’re aligned with your business partner because negotiating during conflict is expensive. Trust me – I could tell you some war stories.
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