Posts tagged: legal services

Why You Need a Real Lawyer -4

 

Beware!!  Before you replace a lawyer with an internet-based “legal service” provider, consider that the results can be disastrous. What they do is provide quick forms for legal needs.  They advertise their availability on television.  They provide forms for business formation, wills, divorce, Powers of Attorney, estate plans, and more.  In the story related below, the forms were for franchises.

No doubt you’ve heard or read that Bar Associations in most states have sued most of these providers for something called the Unauthorized Practice of Law.   Unless you are a lawyer or employed in the legal field, you probably felt they were the underdog. You may have rooted for them to win.  And indeed, they are very careful in interpreting the UPL statute in each state to ensure they do not cross the line. They cannot legally provide any advice. They can only provide a form.  So they survive all challenges.  At least so far.

Their advertising portrays them as the hero trying to save the average person’s hard-earned dollars from seemingly greedy lawyers.  And frankly, Ed the entrepreneur is eating it up big time.  Use of these internet-based services is growing.

The problem is that Mike the carpenter doesn’t know when the matter requires greater finesse than these forms can provide.  And when an undesirable outcome finally shows up — often years later — it often can’t be fixed, or costs far more to fix than would have been spent originally to do it right.

Here’s the problem.  There’s no way to know in advance if the solution is inadequate, unless an actual lawyer is involved.  Later, when a lawyer must correct, or attempt to correct, the situation, he or she is bound by confidentiality and cannot reveal to the public the consequences of using such services.  So unfortunately Mike the carpenter shares all the success stories with friends and relatives, and enhances the reputation of these services.  Rarely does Mike the carpenter hear of the horror stories from others.  And those who ultimately must use a real lawyer to fix problems after the fact rarely talk about it.

So I have challenged lawyers to share some of those stories with me, without any client-identifiable information.  I will in turn publish the information.  Share it with friends, relatives and colleagues who are tempted to meet their legal needs “on the cheap” with an online service provider.

All the stories will be posted under the same title “Why You Need a Real Lawyer” so if you don’t want to subscribe, just return to the blog on occasion and look for that title in the Table of Contents.

Story #4:

A client came to me to review  a Franchise Disclosure Document (FDD ) and franchise agreement template he had purchased on the Internet and filled out so he could start selling franchises. Upon review of the proposed document, it was clear that it was fraught with issues, not the least of which was that it was quite misleading and filled with misrepresentations.

 

This was not because the client was trying to mislead or misrepresent anyone in their responses, but because the client did not have anyone to explain to him what information each disclosure was required to contain and what information it should not contain.

 

The FDD is a very regulated, highly complex document that the average person, even most attorneys, would not know how to properly complete. In addition to the potential fraud and misrepresentation claims that could be brought against the client if he used that form, the form, as completed by the client, violated federal and many state’s laws on franchising.

 

Use of that form could have been extremely costly in penalties and fines by federal and state authorities, and would have allowed each franchisee of the client to rescind the franchise agreement for failure to comply with the federal and state laws.

 

The document was a total waste of money by the client and had to be discarded.  We had to prepare a totally new document.  This cost the client money and time he spent on the template, and then the cost and time of drafting the documents from scratch with us.

Why You Need a Real Lawyer -3

Beware!!  Before you replace a lawyer with an internet-based “legal service” provider, consider that the results can be disastrous. What they do is provide quick forms for legal needs.  They advertise their availability on television.  They provide forms for business formation, wills, divorce, Powers of Attorney, estate plans, and more.

No doubt you’ve heard or read that Bar Associations in most states have sued most of these providers for something called the Unauthorized Practice of Law.   Unless you are a lawyer or employed in the legal field, you probably felt they were the underdog. You may have rooted for them to win.  And indeed, they are very careful in interpreting the UPL statute in each state to ensure they do not cross the line. They cannot legally provide any advice. They can only provide a form.  So they survive all challenges.  At least so far.

Their advertising portrays them as the hero trying to save the average person’s hard-earned dollars from seemingly greedy lawyers.  And frankly, Ed the entrepreneur is eating it up big time.  Use of these internet-based services is growing.

The problem is that Ed the entrepreneur doesn’t know when the matter requires greater finesse than these forms can provide.  And when an undesirable outcome finally shows up — often years later — it often can’t be fixed, or costs far more to fix than would have been spent originally to do it right.

Here’s the problem.  There’s no way to know in advance if the solution is inadequate, unless an actual lawyer is involved.  Later, when a lawyer must correct, or attempt to correct, the situation, he or she is bound by confidentiality and cannot reveal to the public the consequences of using such services.  So unfortunately Ed the entrepreneur shares all the success stories with friends and relatives, and enhances the reputation of these services.  Rarely does Ed the entrepreneur hear of the horror stories from others.  And those who ultimately must use a real lawyer to fix problems after the fact rarely talk about it.

So I have challenged lawyers to share some of those stories with me, without any client-identifiable information.  I will in turn publish the information.  Share it with friends, relatives and colleagues who are tempted to meet their legal needs “on the cheap” with an online service provider.

All the stories will be posted under the same title “Why You Need a Real Lawyer” so if you don’t want to subscribe, just return to the blog on occasion and look for that title in the Table of Contents.

Story #3:

Child is taking care of ill parent. Parent wants to change will to give caretaker child a larger share of the estate than the other siblings. (The other parent is already deceased). Caretaker hires “notario publico” to draft new will. This non-lawyer charges almost the same rate that local lawyers would have charged. When the ill parent passes, the caretaker child submits the new will for probate. Siblings challenge the new will, and present the old will. Child caretaker isn’t clear with [real lawyer] handling the will challenge on her behalf, that the new will was prepared by someone not licensed to practice law. [Real lawyer] makes best effort, but can’t overcome the problems with the flawed new will. Siblings win.

Why You Need a Real Lawyer -2

Before you replace a lawyer with an internet-based “legal service” provider, think carefully. What they do is provide quick forms for legal needs.  They advertise their availability on television.  They provide forms for business formation, wills, Powers of Attorney, estate plans, and more.  Beware!!  The results can be disastrous.

No doubt you’ve heard or read that Bar Associations in most states have sued most of these providers for something called the Unauthorized Practice of Law.   Unless you are a lawyer or employed in the legal field, you probably felt they were the underdog. You may have rooted for them to win.  And indeed, they are very careful in interpreting the UPL statute in each state to ensure they do not cross the line. They cannot legally provide any advice. They can only provide a form.  So they survive all challenges.  At least so far.

Their advertising portrays them as the hero trying to save the average person’s hard-earned dollars from seemingly greedy lawyers.  And frankly, Joe the plumber is eating it up big time.  Use of these internet-based services is growing.

The problem is that Joe the plumber doesn’t know when the matter requires greater finesse than these forms can provide.  And when an undesirable outcome finally shows up — often years later — it often can’t be fixed, or costs far more to fix than would have been spent originally to do it right.

Here’s the problem.  There’s no way to know in advance if the solution is inadequate, unless an actual lawyer is involved.  Later, when a lawyer must correct, or attempt to correct, the situation, he or she is bound by confidentiality and cannot reveal to the public the consequences of using such services.  So unfortunately John Q Public shares all the success stories with friends and relatives, and enhances the reputation of these services.  Rarely does Joe the plumber hear of the horror stories from others.  And those who ultimately must use a real lawyer to fix problems after the fact rarely talk about it.

So I have challenged lawyers to share some of those stories with me, without any client-identifiable information.  I will in turn publish the information.  Share it with friends, relatives and colleagues who are tempted to meet their legal needs “on the cheap” with an online service provider.

All the stories will be posted under the same title “Why You Need a Real Lawyer” so if you don’t want to subscribe, just return to the blog on occasion and look for that title in the Table of Contents.

Story #2:

Client pays $100 to a legal forms website to develop simple, uncontested, no custody, no asset, divorce documents. Client pays another $200 to file them. The Prothonotary bounces them for formalities. Client goes home, spends more money (another $50) to redo the documents on a different website. This time the Prothonotary accepts the documents, but the Judge bounces them for problems. Client comes to [real lawyer]. I have to move to start over, and charge them the same fee we always charge to clean up the mess! At least the Judge immediately signed the proposed order to start over with filing new documents that actual conform to the rules, and let the client use the filing fee they already paid.

Tax on Legal Services in PA

There’s no time to passively wait on this issue, folks.   Seniors are heavily in favor of tax on legal services, as it will replace property tax, and make it more affordable to hold onto their homes when limited to social security. Pennsylvania Realtors (“PAR”) are also heavily pushing this tax “reform” because the real estate tax is a factor which can impact a buyer’s decision for one residence or another.  They have a well-funded PAC, and it’s alleged that among the various groups which have put this bill forward, there is $1,000,000 or more in financing pushing it forward.

On the other hand, the Pennsylvania Bar PAC has about $250,000.  Outnumbered in voices, and crushed by the funding disparity, it’s not looking good right now. The sales tax in PA will increase from 6% to 7% under SB 76.  Sales tax on legal services would be 7%.

Tax guru Kelly Phillips Erb, Esquire, makes another point:

To be clear, it’s not just sales taxes that would increase in the Commonwealth. Personal INCOME taxes in the Commonwealth will also increase in order to offset the loss in property tax revenue (likely landing somewhere around 4.25% eventually – a rate that is higher than the rate of personal income growth). That boost, together with the increase in sales tax base, will not be enough to offset the difference as initially determined by the Independent Fiscal Office. The IFO – which looks at data but does not support or oppose a position – did a rather thorough analysis of the proposal
last year.

Let your voice be heard.  Contact your Senator and express your opposition to Senate Bill 76PBA can’t do it alone.   Not only will this tax have a chilling effect on access to legal services for those of marginal income, but it will be an administrative nightmare for law firms, particularly solo and small firms.

Imagine if you have to pay sales tax when billed, but you don’t actually collect it (or your fees) for months.  Does your billing software even have the capability to charge tax?  Most do not.  That’s because there are only 3 states in the nation which tax legal services: Hawaii, New Mexico and South Dakota – which takes the form of a gross receipts  tax in each state.    Apparently FLA had a tax on legal services, but repealed it due to problems in administration.  Read the ABA statement.

WordPress Themes