Why is it dangerous and not a good idea to do your own lawyering?
Specific, tailored and carefully drafted legal agreements are essential to ensure proper protection of your medical or allied health practice. Increasingly, websites from non-lawyers (e.g. business coaches or professional associations) are purporting to offer “cheap, fast and convenient” templated legal documents. It is clear these cookie-cutter documents are not only insufficient but dangerous – and if used they could lead to legal risks, financial losses and/or damage to reputation that you never anticipated you were signing up for. In this article, we explore exactly what is happening and why this is so worrying, particularly for medical and health professionals.
What is happening?
We are increasingly finding that clients are coming to us with agreements that they have purchased from business coaches, accountants, professional associations or other non-lawyers. We understand that many practices are looking to minimise costs at every juncture they can, and we don’t blame them. However, we are worried and wanted to explain why this will rarely, if ever, suffice, and will often cost more in the longer term.
Why it is so worrying…
Here is a list of the 5 core reasons why we find it so worrying when we see clients doing their own lawyering:
Templates aren’t tailored (generally)
An effective agreement that protects both parties is one that actually reflects the arrangement and is tailored to your practice and the individual’s circumstances.
We notice practices may (rightly) invest in getting a template contract drawn up by a lawyer, but then will try to roll it out for every person they engage. One Agreement for all staff is unfortunately not realistic - one size definitely doesn’t fit all. For example, a contract that is drafted for an administrative employee, will not be suitable for professional staff.
Our experience working with over 1000+ practices has highlighted a key fact: all practices are unique, which means that they operate differently. As templated or poorly drafted documents can only cover standard issues, they often provide insufficient protection by dismissing each practices’ risks. Good legal professionals bridge this gap, providing customised solutions which address issues that can be potentially overlooked by a template created by a non-lawyer.
This also means that, if your friend had a contract drafted by a lawyer and gave it to you to use in your business, it likely is not fit for purpose for your practice. While it may be perfectly constructed for that practice, this does not mean it is suitable for yours. There are also risks of copyright breach in conducting yourself in this way, but that is a whole other blog.
Be aware that the contract that you downloaded off the internet which you updated with the name of your practice and practitioner, also doesn’t eliminate your risk. We are not saying templates don’t have a place in your practice, because they definitely can (when they are specifically customised to the role and practice). Where the arrangement is essentially the same (but for minor details e.g. names), then customised templates can and should be used.
2. Small errors, big consequences
Incorrect legal templates, or absence of essential terms, may render a contract invalid. Or, parts of your contract could create liability to pay certain employee entitlements or give rise to superannuation obligations for contractors. Unclear or ambiguous terms may also be interpreted differently by parties, leading to confusion and potential disputes. Any errors or omissions can potentially result in legal action against you, which could lead to financial loss.
3. Out of date
As the law changes, often your contracts will need to be changed to reflect this. For example, what might have been legally sound at one point in time, may now be considered an unfair contract term under new legislation and hence unenforceable. This is something to keep in mind even if you have had your contracts drafted by lawyers – reviewing these regularly to ensure they still reflect your practice’s arrangements and the current law is vital.
We suggest keeping across these changes by signing up to email newsletters on websites that can provide you with information in a timely way, if you have not signed up to the You Legal newsletter, you can do so here.
4. Jurisdiction
The law in each Australian state or territory differs. The extent it differs will vary, however it is important that the contract is drafted to suit the state that your practice is in. Sometimes we have clients come to us with contracts sourced on websites that have been drafted based on US or EU law, or when ‘drafting’ it themselves have forgotten to change the Australian jurisdiction it relates to, this means that they may be taking unnecessary risks.
5. The medical and health industries
Lastly, it is the precise nature of the medical and health industry that heightens the risk presented by the above factors. There are unique professional and ethical obligations for practitioners which simply do not need to be provided for in other administrative contracts, for example.
There are also unique obligations for practices i.e. a tailored privacy policy is essential because they collect sensitive information and therefore must comply with strict obligations under the Privacy Act 1988 (Cth).
All in all, it is a highly regulated industry, therefore working with legal professionals who have experience in the medical industry is therefore vital.
As the saying goes ‘you don’t know, what you don’t know’ and it helps to have someone in your corner that is aware of the risks you need to be addressing and how you can do exactly that. Our client’s tell us that working with us is refreshing as they don’t need to educate us on the industry because its what we do, day in and day out.
One case study, one reality check
We thought we’d outline one of the most frequent situations we face as specialist lawyers for medical practices.
Our client came to us with a short, basic employment agreement that they had purchased from their business coach. Whilst it matched the jurisdiction and their practice’s name, that was about where the customisation stopped. The Agreement was for an allied health professional and was lacking provisions relating to the relevant qualifications, registrations and/or supervision requirements. It also exposed them to significant risk, as it included terms that would likely be considered unfair under new legislation.
They wanted their Agreement to be reviewed and updated. However, it was actually more cost-effective for us to create an entirely new Agreement. The reason for this is similar to if a car gets into an accident, the car can be ‘written off’ by an insurance company, meaning that it is it cheaper to purchase a new one than fix the old one. They expressed how much they wished they had found us sooner because they could have saved the money on this initial Agreement template which was not fit for purpose.
Ultimately, we created a new Agreement for them, which was tailored for the allied health professional. Better yet, it could be used for any allied health professional they engage in future with the same arrangement.
One last thing we want to mention about this particular example, our client was initially worried lawyers would ‘judge’ them for not having this all sorted correctly. We find clients saying this to us a lot but want to reassure you that no, we won’t judge you. We understand completely why this may be a problem you are facing – we know how common it is and we know you are not alone.
Pick your battles
When starting, running or selling your practice, compliance with federal and state legislation is crucial. It is an investment in your future success. This may have you feeling like you’re having to pick your battles and it makes sense why – you only have so much time, energy and money available to spend. However, fixing a problem when it occurs generally always costs more than preventative measures, which is why we exist to protect your practice.
We find that clients who work with us experience another big bonus - confidence. We do not want our clients losing sleep over legal compliance.
What now and where to start
We are all for creativity and DIY projects, just not in this space. That is not to say it’s impossible to draft your own or use one from accountant, business coach or professional association, we just rarely (if ever) see it done well. We cannot stress the importance of having legal documents drafted by legal professionals – it is crucial to mitigate risks and to set your practice up for long-term success.
The risks that your practice faces will likely be unique to your business. As specialist lawyers for medical practices, we can help you understand the specific risks your practice may be facing, and help you to prioritise the agreements that need to be in place to mitigate, manage or transfer those risks.
Please feel free to contact us and we can arrange a complimentary call with one of our team members, or check out our Fast Track Solutions for customised Agreements here.