THE CASE FOR LAWYERS

By Joe Kolb – Arkansas Bar Association

Ionce had a friend who, while having a heart attack, sat down at his computer to Google “treatment for heart attack.” He recognized the seriousness of his condition but wanted to treat himself in order to avoid the cost of going to the hospital and receiving treatment from a doctor.

OK, that’s not really true. I don’t know anyone who has done that.

But I do know many people who, when faced with a significant legal event, sit down at their computers and Google “employment agreement” or “contract to sell/buy a business” or “will form.” They want to avoid the cost of a lawyer despite the fact their legal matter could result in substantial personal or financial harm by putting at risk either their ability to earn a livelihood, or the viability of their business, or the sum total of their worldly possessions.

The practice is becoming more prevalent, thanks to websites like LegalZoom and RocketLawyer and retailers like Office Depot, which offer general information about basic legal principles and a plethora of fillin-the-blank legal forms.

While the practice offers the allure of significant savings in attorney fees, that often turns out not to be the case. As the use of these preprinted forms have increased, the number of lawsuits over issues related to the use of the forms have increased. In those cases, it is not uncommon that the cost of the litigation to resolve the issues is greater than what it would have cost to have attorneys negotiate and/or draft the agreement in the first place. Nor is it uncommon that such litigation ends in such a way as to strip one party or the other of any benefit of the original agreement.

I know what you are thinking. I am just a lawyer hawking the services of lawyers. Right?

Consider some examples to drive the point home based upon actual cases:

Case 1: Cindy owned a fleet of medical aircraft and wanted to contract with Joe to service the aircraft for a monthly fee. Cindy and Joe used a preprinted legal form, which provided, “If any payment remains unpaid for more than 30 days, Joe will be entitled to charge interest on the outstanding balance at the rate of 1.8% per month until paid.” Cindy failed to pay. Joe charged interest. Cindy sued, alleging the interest penalty ran afoul of Arkansas’ interest rate cap of 17% per annum. The result? A court held that the contract was usurious and void as to both principal and interest. Joe was not contractually entitled to payment for the services he provided to Cindy. This is an example of how certain provisions in pre-printed forms may be unenforceable under state-specific law and go unnoticed by non-lawyers.

Case 2: Cindy made homemade jelly and wanted to sell it at Joe’s gas station. They talked and agreed that Cindy would make, jar and deliver the jelly to Joe. Joe would sell it. Cindy would get 75% of the sales proceeds; Joe would get 25%. They used a preprinted form to memorialize their agreement. Although they never discussed it, the form included a standard indemnity provision –Cindy will indemnify and hold Joe harmless for any and all claims and causes of action related to the sale of jelly. One of Joe’s employees opened a jar of jelly before it was sold. It spoiled and made a customer sick. The customer sued Joe and was awarded damages. Joe then sued Cindy and demanded indemnification under the form contract. The result? A court held Cindy was legally required to reimburse Joe for the damages he paid to the customer. This is an example of how preprinted forms often contain provisions that non-lawyers do not recognize as provisions, which are best stricken or altered.

Case 3: Joe was on his death bed. His girlfriend, Cindy, ran down to Office Depot and bought a pre-printed will form. Joe, Cindy, and Joe’s two brothers talked things over in Joe’s hospital room. All agreed Cindy was to get the bulk of Joe’s estate. Cindy filled in all the blanks in the form at Joe’s direction. Joe signed the will in the presence of his brothers. The next day, in the hospital cafeteria, the brothers completed the section of the will form for witnesses. When Joe died, his mother contested the Will, asserting it was not properly executed. The result? A court held the will was not properly executed because the brothers did not complete the witness section in Joe’s presence. Cindy got nothing. This is an example of how preprinted forms may lull non-lawyers into a false sense that their agreement is legally binding.

Arkansas lawyers have knowledge of state and practice area-specific law. They have training to identify legal issues and ways to avoid them. They have skill negotiating, drafting and overseeing the execution of legal documents. They know what provisions to include, leave out or change to protect your interests. You cannot get that by simply printing a form off the internet.

The Arkansas Bar Association’s mid-year meeting is designed to provide and enhance that knowledge and skill base for attorneys who practice in the areas of tax law, estate planning and probate and elder law.

And the next time you are faced with a legal mater, I encourage you to sit down at your computer and Google “Little Rock estate planning attorney,” or “Arkansas tax lawyer,” or “Elder lawyer in Arkansas” to help you resolve your issue, and forgo the temptation to represent yourself using a preprinted legal form. You may also visit the Arkansas Bar Association’s website (www.ArkBar.com) to search its database of licensed attorneys by practice area or location.

It could save you a lot of time, headaches and money!