Recently, we’ve seen a boom of legal tech startups that aim to revolutionize the old-school ways of legal advising and strategy. The pandemic accelerated a lot of companies to digitize, and this is also true for law firms.
On the one hand, AI in the legal industry has had a number of positive effects that benefit clients and attorneys, including increased efficiency and reduction in mountains of paper with electronic filing, billing, and e-libraries, to name a few.
On the other hand, AI should not be considered a replacement for a human advisor. Unfortunately, the average consumer often does not realize this until it is too late.
Here are 4 reasons why you should not rely on legal tech companies for your business:
No Warranties
I just hired an HVAC business to replace my heating and air-conditioning system (it was hanging on by a thread, and I decided to give up the ghost on the hottest day).
After the technician inspected my system and presented me with options, the next thing the technician explained were the warranties. I knew that if I went with a friend of a friend who does this work on the side, that it would save me a few bucks, but I would not get any warranty. I’m spending a bit more to get things done right the first time and relief if something goes wrong in the future.
When you hire an attorney, you are paying for their expert advice as it relates to your business goals and in the execution of your business strategy. Additionally, you have an expectation, as you should, that any related documents are completed correctly.
Lawyers cannot guarantee results, but you can expect that they act in your best interest and that the work is correct. What’s more, attorneys are accountable to the state bar associations, not to mention the risk of lawsuit or other legal proceeding.
Legal tech firms may be less expensive than hiring an attorney, but they also do not guarantee that the work is done correctly. Next time you are on one of those websites, check out their disclaimer (EXAMPLE 1, EXAMPLE 2).
Current Changes in the Law
New statutes are passed by state governments and Congress quarterly, not to mention judicial decisions on the state and federal level. These laws and judicial decisions can affect your business and your future plans.
Whether you need a lawyer for your business today, or you are thinking about the future (i.e. business succession planning), or maybe you need an expert in employment law, they can advise you and draft your unique documents according to those changes.
Those previously mentioned disclaimers not only apply to the accuracy of the documents but to keeping the information provided on their websites up to date.
Proceed with Caution. . . Unless You Know What You are Doing
The technology-based firms are good solutions if you already know exactly what you need to do - whether you need a patent, trademark, copyright or a mix, selecting the right patent, trademark, or copyright application, or whether you want an LLC or a corporation, a C-corp vs an S-corp, etc.
However, the problem is that paperwork or filing the application is the final step in a process that calls for legal judgment. Developing a legal strategy in consideration of your business goals is not something you will get from a tech solutions firm.
They simply take what you give them and spit out the document – that’s the easy part.
Artificial Intelligence Can Not Replace a Human
I love automation as much as the next entrepreneur and that’s not an overstatement. I rely on several tools for every part of my business because they are critical for keeping good records, and they keep me organized, assist in collaborations, etc.
But my Quickbooks subscription cannot replace the expert advice I get from my CPA or bookkeeper. My CPA knows me, my business goals, and provides the guidance I need and rely on to make the best decisions and maintain a legally compliant business.
I invest in tools to provide a streamlined (and secure) experience for my clients and to replace administrative tasks, but my clients still need me to run things by, and I still need human administrative, operations, and legal support for the operation of the firm.
Artificial Intelligence in matters of the law is risky because it does not provide customized solutions. Because they do not provide legal advice, it’s a one-size-fits-all approach without concern about your industry, your goals, number of employees or potential investors; or recent legal developments in the states you do business in.
Not only that, but companies like LegalZoom will also charge fees for services that can be done in minutes by an attorney (or yourself in some instances) that you have a relationship with for free.
What initially appears cheaper can be costly.
As holistic business advisors, we are equipped to go beyond putting in place legal documents or acting reactively. Instead, we give you the peace of mind of knowing you have set your business up right from the start, and if needed, we will assist in filling in the gaps.
If you would like assistance on protecting your business and creative genius, schedule a consultation with MC Law here.
You can also check out our Business Planning or Intellectual Property page for more information.