SoSmall Series: This series focuses to cover various technology topics for championing solo, small businesses and professionals in the legal industry.
I am meeting more and more technology companies which have one objective:
replace the lawyer!
I am generally wary of technology companies that tell me their end goal is to replace a lawyer. Unlike lawyers, such technology companies have no statutory duties, among others, to act in the best interests of their clients.
In desiring to replace lawyers, the starting point typically for these technology companies is to provide templates or examples of agreements directly to consumers of legal services, especially those in SoSmall communities (solo or small businesses and professionals).
In their pricing strategy, they may follow an “80-20” rule. Lawyers may generally, be willing to discount their professional services by 20% for a contract. On the other hand, these technology companies will provide a template of that contract at a much lower value; at least 80% discount of what lawyers may generally charge. As those in SoSmall communities tend to be price-sensitive, it is no surprise who wins that sale: the technology company.
Beyond this pricing strategy, hidden somewhere in their terms of use, one finds a disclaimer that states these technology companies take no liability or responsibility for any loss a consumer suffers arising from the use of the template, even it is for fair use or the purposes the template has been designed for.
Over the years, I have met several SoSmall community members who have used such templates to their detriment. Their problems have not just been limited to disputes about founder or shareholder agreements but also disputes relating to agreements these persons entered with their own customers. There are also reported cases of persons using online wills or other documents, and not eventually being able to give effect to these wills or documents. Anecdotally, it cost these persons a lot more to resolve the problems that arose, as compared to the cost of initially purchasing the templates.
I believe regulatory and membership bodies of the legal profession have a duty to step up and educate consumers about the risks of such legal technology services. This duty to safeguard the public interest goes beyond their economic prerogative of being catalysts or growth accelerators of such technology companies.
With a few allied lawyers, I now have a practice around advising clients about recourse they may have against such fast-growth and well-funded technology companies. The results have been mixed. In some cases, these clients have secured amicable settlements with the technology companies and, in others, they have not been successful.
Setting aside education and potential claims against technology companies, it is also my hope that legislation will be introduced to deal with the emergence of such technology companies. In addition to displaying prominent disclaimers in their templates, such technology companies can also be required to provide optional insurance cover to consumers. Consumers can purchase this optional insurance to protect themselves from losses and expenses suffered from the fair use of such templates.
However, given the dearth of consumer education and insurance protection for such fair use risks, I think it is also important for SoSmall lawyers to provide middle-ground solutions to consumers.
Through my SoSmall work, I evaluate various technology solutions and do suggest to clients some appropriate solutions for consideration. I then provide them with a top-up service to have the solution customised for their purpose.
While I prefer to do this independently, I know of several SoSmall lawyers that partner with certain technology companies to provide these solutions to consumers. I hope more SoSmall clients and lawyers will consider such middle ground or “win-win” solutions.
This article is written by Dharmendra Yadav from Lex Advocatus LLC.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.