5 Reasons Lawyer-Drafted Legal Documents Protect Businesses

Investing in legal support is not sexy. Most businesses view legal expenses as a cost centre, whether the business is brand new or celebrating its 50th anniversary. However, similar to insurance, I always recommend that business owners view legal expenses as an important CYA asset.

Professionally drafted legal documents are the most important investment you will make throughout the evolution of your business. They reduce your personal and professional liability. At the same time, they bring your business into compliance with applicable laws and regulations.

In this blog post, Nocturnal Legal discusses five benefits and cost savings your business will gain from investing in lawyer-drafted legal contracts.

1. Failure to Comply with the Law = $$$

If you collect emails, names, or addresses from California residents, you may be subject to the California Consumer Privacy Act (CCPA) — either now or in the future.

The CCPA requires businesses to give California residents specific rights over their personal information. One of those rights is the ability to request deletion of their data. To comply, you must keep collected information organised well enough to delete it on request. You also need a privacy policy that clearly outlines how your business handles that process.

For example, your privacy policy must include minimum contact information so California residents can reach your business to assert their rights. If that information is missing, the California Attorney General’s office could find your business in violation of the CCPA. Violators face fines of up to $2,500 per violation — or $7,500 per intentional violation. That adds up fast.

2. Random Form Documents Are Bad News

Many people think they can borrow legal language from a website they know. There are many reasons why this is a bad idea. First, copyright law prohibits you from using written content from another website without the owner’s permission or a licence.

Even if you find a free-form document online, you have no way of knowing who wrote it. Some areas of the law contain nuances that a non-expert will overlook. If that happens, the document may be missing important protections for you and your business.

A common example is the non-disclosure agreement (NDA). Many NDAs include a marking provision. Under this provision, you must mark any protected information with the word ‘confidential’ or ‘proprietary’. If disclosed orally, you must also reduce it to writing and mark it within a specified time. Even when the NDA includes this provision, employees rarely follow it — which leaves all sorts of information at risk.

Real-World Consequences of Using Form Documents

This exact issue arose in a 2013 case. Two businesses signed an NDA. One party then shared presentation slides without marking them as confidential – verbally or in writing. The district court ruled that the NDA applied as written. Because the slides lacked the required marking, they did not qualify as confidential information. The appellate court agreed on appeal.

Here is another example from my personal practice. A local family-owned company hired five new employees using a form document they found online.

When the time came to terminate one employee for missing scheduled shifts, they discovered the document was a binding employment agreement — not an employment offer. That distinction wiped out the company’s ability to terminate at will. The employee sued for wrongful termination. The case ultimately settled for a significant sum.

3. Saves You Money and Time

Legal templates sometimes get a bad reputation for the reasons above. But the truth is a well-drafted legal template is an excellent way to control costs. You get the same high-quality documents you would receive from an attorney billing by the hour – at a fraction of the cost.

Nocturnal Legal provides business owners with quality, fully protected legal documents that a licensed attorney drafts. Each form is customised for your specific business. For example, terms and conditions for an e-commerce store look different from those for a blog. You can personalise each document yourself. Every form also comes with step-by-step instructions to help you understand and implement it with confidence.

The legal industry has worked hard to make the law feel mysterious and complicated. At Nocturnal Legal, I break down those barriers and put you back in a position of power. Time is money—so Nocturnal Legal also publishes straightforward legal resources that get to the point quickly.

4. Builds Credibility as a Business

Have you ever read a work email that contains typos? Most of us form an opinion immediately. We assume the person lacks organisation or proper training.

Your legal documents send the same kind of signal. They set the tone for whether customers, suppliers, and business partners take your business seriously.

Well-drafted legal documents look professional. They are free from typos and contain all the standard legal language your business needs.

There is also a credibility effect that goes deeper. When your documents look like a licensed attorney drafted them, others treat the business relationship more seriously. Many business deals involve an uneven balance of power. One party often holds a stronger negotiating position. That imbalance can push a smaller party to accept risks and obligations it otherwise would not.

Even if you do not have a lawyer on speed dial, a professionally drafted legal template signals to the other side that you have experienced legal support. That perception alone may make the other party think twice before pushing you around.

5. Peace of Mind

When a licensed attorney drafts your legal documents, you can feel confident the documents include the right protections for your business. There is no second-guessing whether you included the correct terms, whether a loophole exists, or whether your business is inadvertently breaking the law.

How a Poorly Drafted NDA Can Work Against You

NDAs are a good example of where things can go wrong. Consider a situation where two businesses plan to exchange confidential information. They sign a mutual NDA. That NDA requires both parties to return or destroy any confidential information received during the agreement’s term. However, it includes no right to retain copies.

You may need to keep copies of another business’s confidential information for legal compliance. If someone audits you, files a lawsuit, or you need to refer back to the agreement’s surviving rights and obligations — what happens if you permanently deleted everything? Worse, what if your data is automatically backed up on a server you cannot easily access? Without the right to retain copies, those backed-up files technically breach the agreement.

A well-drafted legal template anticipates these issues and addresses them directly. There is no guesswork. Your normal business practices will not accidentally put you in breach of a contract.

Conclusion

Professionally drafted legal documents are a worthwhile investment. We help your company comply with relevant regulations. They protect you from unnecessary and avoidable liability. They include all the provisions necessary for adequate protection. Professionally drafted documents make your business appear more credible and trustworthy to clients and partners.

And they give you peace of mind that your actions — or inactions — will not accidentally create a larger legal problem.

As a commercial contracts attorney in Arizona, Nocturnal Legal has helped countless businesses create standard form agreements for their customers, suppliers, and third-party partners. Contact us to help you build a solid legal foundation for your business.