Introduction

When doing business deals, you might be wondering, “Do I really need to hire a lawyer for this contract, or can I handle it on my own?” The answer depends on several factors, including the complexity of the deal, the stakes involved and your own comfort level with legal language.

Let’s discuss when it’s a good idea to bring in a legal expert and when you might be able to go it alone.

Read: 5 ways AI contract review can save you time and money

Understanding the basics

First off, not every contract needs a lawyer’s touch. For straightforward agreements—like a simple purchase order or a repeat business deal with a trusted partner—you might feel confident handling the contract yourself.

These types of contracts often involve clear, standard terms that you’re already familiar with, so you may not need legal guidance. However, even in these cases, it’s crucial to fully understand what you’re agreeing to. If anything feels unclear or you’re not sure about the implications, it may be wise to consult a lawyer.

Complex and or high-stakes contracts

When the contract gets more complex, or the stakes are higher, that’s when you should seriously consider hiring a lawyer. Here are some scenarios where legal expertise is likely worth your while:

New or unfamiliar agreements

If you’re entering into a type of contract you’ve never dealt with before, or if the terms seem complicated, it’s a good idea to have a lawyer review it. They can help you understand the nuances and ensure you’re not agreeing to something that could harm your business down the line. Alternatively, you can use Cobrief to review your contract, so you can understand exactly what you’re being asked to sign and if you do indeed need to get a lawyer involved.

Long-term commitments

Contracts that lock you into a long-term commitment, such as multi-year service agreements or leases, can have significant implications for your business. A lawyer can help you spot potential pitfalls and ensure that the terms are fair and manageable over time.

Large financial implications

If the contract involves a significant amount of money, it’s worth investing in legal advice. Whether you’re making a big purchase, securing a substantial loan, or signing a major sales contract, a lawyer can help protect your financial interests and minimize risks.

Contracts involving intellectual property

If your contract includes terms related to intellectual property—like patents, trademarks, or proprietary information—you’ll want a lawyer to ensure that your rights are fully protected. Intellectual property can be complex and highly valuable, so it’s essential to get it right.

Where there’s a power imbalance

Another key factor to consider is the balance of power between you and the other party. If you’re dealing with a much larger company, or if the other side has their own legal team, it’s smart to level the playing field by having a lawyer on your side. They can help negotiate terms that are fairer and ensure you’re not being taken advantage of. Remember, contracts are often negotiable, and having legal support can help you get better terms.

Read: 5 signs it's time to invest in an AI contract review tool

Understanding complicated legal language

Legal language can be tricky. Contracts are often filled with them that can be difficult to interpret if you’re not familiar with it. Even seemingly simple words can have specific legal meanings that aren’t immediately obvious. A lawyer can decode this language for you, ensuring that you fully understand the implications of each clause.

Alternatively, you can use Cobrief to understand exactly what you’re signing and get it to flag the key risks.

Potential red flags

Certain red flags in a contract should prompt you to seek legal advice immediately. For example:

Ambiguous or vague language

If any part of the contract is unclear or open to multiple interpretations, a lawyer can help clarify the terms and suggest precise language that avoids future disputes. You can also use Cobrief to review your contract and explain vague language in plain English.

One-sided terms

If the contract heavily favors the other party, a lawyer can help negotiate more balanced terms.

Unusual clauses

If the contract includes terms that you’ve never seen before or that seem unusual, it’s best to get a legal opinion. These clauses might be standard in certain industries but could be problematic if misunderstood.

Tailoring contracts to your business

A lawyer can also help tailor a contract to better suit your business needs. Standard contract templates are useful, but they’re not one-size-fits-all. A lawyer can customize the contract to address your specific situation, adding clauses that protect your interests and removing ones that don’t apply. This customization can be crucial in ensuring that the contract works for your business rather than against it.

Read: How AI contract review simplifies business contracts for non-lawyers

Preventing future disputes

One of the main reasons to involve a lawyer is to prevent future disputes. A well-drafted contract clearly outlines each party’s promises and what happens if things go wrong. This clarity can prevent misunderstandings and conflicts down the road. A lawyer’s expertise can ensure that all potential issues are addressed upfront, reducing the likelihood of costly legal battles later.

Reviewing existing contracts

It’s not just new contracts that might need a lawyer’s review—existing contracts should also be revisited periodically, especially if your business has grown or if laws have changed since the contract was signed. A lawyer can help update your contracts to reflect current business practices and ensure ongoing compliance with the law.

Cobrief can help with reviewing previously signed contracts. All you need to do is upload it, click review and you’ll be presented with a list of red flags explained in plain English.

Conclusion

In short, while simple agreements might be handled in-house, it’s wise to consult a lawyer when the contract is complex, involves significant financial or legal implications, or when there’s a power imbalance. A lawyer’s expertise can help protect your business, ensure fair terms, and prevent future disputes. In the end, investing in legal advice can save you time, money, and headaches, making it a smart move for any business.

How Cobrief can help with contract review

Reading your business contracts can feel overwhelming as an owner-manager of a small to medium-sized business. That’s where Cobrief comes in. Cobrief helps business owners and operators review their business-to-business contracts for legal risks.

Upload your contract to Cobrief's AI contract review software, click review and you’ll get a list of all the risks, in plain English. This helps you decide whether to sign, negotiate or reject the terms of your contract, or hire a lawyer. Think of it as a heat map for your contracts.

Get started here.