Wired by law - evaluation of eight home legal software packages - includes product directory - Legal Matters - Software Review - Column - Evaluation

Home Office Computing, April, 1996 by Jeffrey J. Fahs

Hire the Program But Don't Fire The Lawyer: A Look At Eight Legal Software Packages

ARE YOUR PARTNERSHIP PAPERS LEGALLY BINDING? IS your company's standard employment agreement a booby trap? These are the kinds of questions that send business owners to their attorneys. The trip is often costly because your counselor's meter starts running the minute you call. Can you cut or entirely eliminate such expenses?

In recent years software vendors have flooded the market with all kinds of legal do-it-yourself kits that hold out just such hope. You should be skeptical of such claims, but realize that many of the hours your lawyer notes on the bill are for work performed by legal assistants or paralegals. In other words, you sometimes pay lawyer fees for nonattorney work. This is where the crop of legal software on the market today comes in handy--eliminating research and other costs before you go to your lawyer for counseling.

Based on questions we get from readers, we examined eight legal software packages. None of them is a substitute for an attorney, but all are valuable tools that can help you cut costs--up to a point. Here, we'll tell you where that point lies. Don't think of this as a software review. We address just one issue this month: How far can you go with legal software before you must call in an actual attorney?

Business Law General legal questions and forms are often so standard that this is a logical place to start. We weren't disappointed when we tried Small Business Legal Pro (for specifics on these packages, see the accompanying box, "Legal Software Details "). This encyclopedic package provides clear and concise information with a clean interface. For instance, it provides good details on contract warranties, information that can help you understand what you're promising or what you're being promised. It also contains 20 forms of business contracts, credit applications, and demand letters.

For general business law, Kiplinger's Small Business Attorney is not as comprehensive as the Legal Pro, but it is worth its price if you are thinking about the ways in which to structure your business.

Substance and Structure To decide whether your company should incorporate or enter into some kind of partnership, call your attorney. No software is going to help you make that decision. But before you make the call, use any of the packages mentioned in this column to draft your first articles of incorporation or partnership agreement.

If you're pretty much convinced that incorporation is the way to go, note that Kiplinger's takes you practically all the way to completion--provided you incorporate in Delaware. Don't laugh: Many large corporations choose Wilmington for tax purposes. Thus many states try to emulate Delaware's incorporation procedures. Still, if you incorporate in any other state, the forms in this package should be thoroughly checked by your lawyer after you fill them out.

Drafting incorporation paperwork is always a daunting task. Incorporate! 2.0 guides you through the process for all but three states, namely Alabama, Rhode Island, and North Carolina. Again, you can pare legal expenses if you choose to incorporate your company in any of the covered states. But you should show your first draft to qualified legal counsel before filing anything. Both Incorporate! and MinuteMan (often sold as a set) have the best formats for writing the standard artifacts of a corporation, such as the board of directors minutes, shareholder minutes, or standard bylaws.

Jian AgreementBuilder stands out from the rest of the pack but not always in a good way. It has document templates for a wide range of business needs, including all the forms you'd want to operate a company on a day-to-day basis. AgreementBuilder provides little direction, so you'll need your lawyer to double-check that you have the appropriate forms and that they're filled out properly. The AgreementBuilder package's certificate of incorporation is valid only in California, so it's of limited use. One nice feature here is the limited partnership agreement. No other package has one. Some states, however, also require limited partnerships to file information otherwise contained in incorporation papers. So if you're outside California, check with an attorney before using AgreementBuilder for your actual filing as a limited partnership.

Letter of the Law Legal LetterWorks includes all the forms you need to start and operate a corporation, including a corporate resolution and other documents. You can use these forms in any state, except Louisiana, although local provisions may vary. Where financial issues are concerned, these provisions change frequently, so your attorney will keep you up-to-date.

Ask your attorney to select a sales contract and you're bound to run up big legal expenses. You can always find a clause that must be changed or a subtle difference from one sales situation to another. Many of the software packages we tried will help you cut these costs.

Kiplinger's contains comprehensive sets of sales and marketing contracts. It also includes context-sensitive help. Point and click at a clause and you get a concise explanation. This will help you eliminate clauses before you visit your lawyer. The most complete sales contract comes with AgreementBuilder, which prompts you to specifically identify goods exchanges. Use it while you create your sales contracts, and then spend an hour with your attorney to dot all the i's.