A legal template can help you understand some things that a document should cover, but it can't reflect how your business actually works. Templates often miss terms your business needs, include terms that don't apply, and can contain clauses that are now unlawful under Australian law. For the documents you rely on to set your business up for long-term sustainable success, get paid, and manage risk, like your client terms and conditions, a tailored document is worth the investment.
We've all seen the ads. "All the legal templates you'll ever need for $199!" "Why pay a lawyer?" "You're a small business, so a template will save you money."
I'm asked all the time whether template legal documents can work. My honest answer: it depends on what you need your documents to do, and how much you value your business. It's sensible to be careful with money. But being careful shouldn't be confused with cutting corners. As I like to say, DIY is for Bunnings, not for your legals.
When can a legal template work?
Templates have their place in business. For things you're the expert in, like responding to enquiries, following up invoices or preparing reports, a template saves time, because you know what to change. Legal documents are different: unless you're a lawyer, you can't tell what's missing or what won't work until you need to rely on it.
A template can be a useful starting point. It can help you understand some of the key points a document should cover and what questions to ask. It can also be a good basis for a conversation with your lawyer.
Where templates fall down is when you rely on them as the finished product, especially for your client terms and conditions, which are the documents you'll lean on when a client won't pay, wants a refund or disputes what was agreed.
What are the risks of using a legal template?
It doesn't reflect how you work. A template can't know how you deliver your services, take payment, handle cancellations or own your intellectual property.
It can miss terms you need, and include terms you don't. Either way, you could be left exposed when the document is tested.
You may not understand what you're agreeing to. If you don't know what a clause does, you can't rely on it, or explain it to a client.
You don't know what you don't know. Your documents need to cover the worst-case scenarios. If you don't know what those are for your business, you can't know whether a template covers them.
It may be out of date or written for another country. Australian law changes, and an overseas template may not reflect it at all.
It may contain unfair contract terms. This is now a serious legal risk, not just a drafting issue.
Can a template contain unfair contract terms?
Yes, and many older and overseas templates do. Since 9 November 2023, using an unfair term in a standard form contract with a consumer or a small business is illegal, not just unenforceable. A small business, for these rules, is one with fewer than 100 employees or an annual turnover under $10 million.
The penalties are significant. For a company, the maximum penalty is the highest of $50 million, three times the benefit obtained, or 30% of turnover during the breach period. For individuals, it's up to $2.5 million.
Most client terms, website terms and templates you issue on a take-it-or-leave-it basis are standard form contracts. Terms that may be unfair include ones that let only your business vary the price or the terms, terminate the contract, or avoid its obligations, without giving your client the same rights. A template won't tell you whether its terms are fair for your business.
How do I make a legal document watertight?
These are the five steps I recommend to develop a document you'll be able to rely on when you need it most:
Start with advice. As small business owners, we don't know what we don't know, and that's OK. Talk to your business lawyer about where you're at and which documents you need, so you understand your obligations from the start.
Tailor it to your business. Your documents should suit how your business works, comply with your legal obligations, and fit your processes and systems. One size doesn't fit all.
Work with your lawyer. Developing your documents should be a collaborative process. You need to understand them and know how to use them. Red flag: if your lawyer emails you a template and tells you you're good to go, without understanding your business, think twice before using it.
Make it yours. Your legal documents are an extension of your business. They should carry your branding, not your lawyer's, and be written in plain English in your tone of voice. You should feel proud each time you send one.
Put it into practice. A document only protects you if you use it properly. Your client terms need to be accepted before work starts, and built into your proposals, onboarding and invoicing, so you can rely on them when you need to.
These five steps are at the heart of how I work. My signature approach, Legals By Design®, creates tailored legal documents and frameworks designed to evolve with your business as it grows. It's a collaboration: we start with how your business actually works, I draft documents in plain English that carry your brand, and I help you build them into your systems, so they work for your business from day one. That's also why I don't use templates.
Is a tailored document worth the cost?
A template costs less upfront. But the cost of fixing a template problem later, whether that's a client you can't get paid by, a dispute or an unfair terms risk, almost always exceeds the investment in getting your documents right. Disputes are time-consuming, expensive and stressful, and they take you away from your business.
I explain how legal fees work, and what I charge, in the real cost of an Australian business lawyer.
If this has stirred some unease about your documents, that's OK. I have a judgement-free approach, and I'm here to help. Book an introduction call and we'll work out the best way forward for your business.
This article provides general information only and does not constitute legal advice. Your obligations depend on your specific circumstances.
Frequently asked questions
Are legal templates good enough for a small business?
A template can help you understand some of what a document should cover, but it can't reflect how your business works, and it may miss terms you need or contain terms that are unfair under Australian law. For your client terms and other documents you rely on, a tailored document is the safer choice.
Can I use a template for my client terms and conditions?
You can, but it's risky. Your client terms are the document you rely on when a client won't pay, wants a refund or disputes what was agreed, so they need to reflect how you actually deliver your services, take payment and handle cancellations.
What is an unfair contract term?
A term in a standard form contract that causes a significant imbalance in the parties' rights, isn't reasonably necessary to protect the business relying on it, and would cause detriment if relied on. Since 9 November 2023, using one with a consumer or small business is illegal, with penalties of up to $50 million or more for a company.
Can I use a legal template from an overseas website?
It's not recommended. An overseas template is written for a different legal system and won't reflect Australian law, including the Australian Consumer Law and the unfair contract terms rules.
What makes a legal document watertight?
Start with advice, tailor the document to your business, work through it with your lawyer so you understand it, make it your own, and put it into practice, so your clients accept it before work starts and you can rely on it when you need to.
