Do You Need a Lawyer to Create a Partnership Agreement?
Starting a business with a partner can be exciting, but without proper documentation, your dream venture could quickly turn into a legal nightmare....
8 min read
You've found the perfect candidate for a key position in your company. Or perhaps you've received an exciting job offer that could advance your career significantly. In either case, an employment contract will formalize the relationship—but should you hire a lawyer to draft or review this important document?
Legal GPS Pro
Protect your business with our complete legal subscription service, designed by top startup attorneys.
- ✅ Complete Legal Toolkit
- ✅ 100+ Editable Contracts
- ✅ Affordable Legal Guidance
- ✅ Custom Legal Status Report
The decision isn't always straightforward. While legal expertise provides valuable protection, it also comes with costs that may seem unnecessary, especially when templates are readily available online. This article explores when legal counsel adds genuine value to the employment contract process and when you might be able to handle things yourself.
What Is an Employment Contract?
An employment contract is a legally binding agreement that defines the professional relationship between employer and employee. Unlike casual agreements or simple offer letters, a formal employment contract covers specific terms and conditions of employment that protect both parties' interests.
These contracts typically address:
- Compensation details (salary, bonuses, stock options)
- Job responsibilities and expectations
- Work location and schedule
- Benefits and perks
- Intellectual property ownership
- Confidentiality requirements
- Non-competition and non-solicitation provisions
- Termination conditions and severance
- Dispute resolution procedures
When well-drafted, an employment contract provides clarity and predictability. When poorly constructed, it can create misunderstandings, restrict future options, or even result in costly litigation.
The Risks of DIY Employment Contracts
The internet offers countless employment contract templates, making it tempting to simply download a form, fill in the blanks, and move forward. However, this approach carries significant risks.
Many employers discover too late that their template-based contracts contain provisions that:
- Don't comply with current state laws
- Include unenforceable clauses that wouldn't stand up in court
- Contain ambiguous language subject to multiple interpretations
- Fail to address industry-specific concerns
- Omit crucial protections for the business
- Create unintended restrictions on employment practices
From the employee perspective, signing a contract without proper review can lead to unwelcome surprises, such as:
- Restrictive non-compete clauses that limit future career options
- Unclear bonus or commission structures
- Termination provisions that provide minimal protection
- Intellectual property terms that extend beyond reasonable scope
- Dispute resolution mechanisms that favor the employer
The reality is that employment law varies significantly by state and industry, and it evolves constantly through legislation and court decisions. A contract that worked well five years ago—or even last year—may contain provisions that are now problematic or unenforceable.
Employment Agreement Template
Get a customizable, attorney-drafted Employment Agreement Template built for legal protection.
Trusted by 1,000+ businesses to safeguard their LLCs.
When Employers Should Use Legal Counsel
For employers, certain situations make legal guidance particularly valuable when creating employment contracts:
Hiring executive or key personnel. When bringing on leadership team members who will have significant authority and access to sensitive information, customized contracts can protect your business interests while also offering the competitive terms needed to attract top talent.
Roles involving intellectual property. If employees will create valuable IP, proper contracts ensure the company retains appropriate rights while clarifying employee ownership in specific situations.
Positions with access to confidential information. Legal expertise helps craft enforceable confidentiality provisions that protect trade secrets and sensitive business information.
Specialized industries. Certain fields (healthcare, finance, technology) have unique regulatory requirements that affect employment terms and conditions.
Growing businesses. As your company expands, standardized but legally sound contract templates can provide consistency while protecting against future disputes.
Beyond mere compliance, well-crafted employment contracts offer strategic value. They establish clear expectations, reduce misunderstandings, and provide a foundation for addressing issues before they escalate into costly disputes.
Pro Tip – Strategic Considerations for Employers
When working with legal counsel on employment contracts, think beyond basic terms. Consider how the agreement can support broader business goals:
- Use contracts to reinforce company culture and values
- Structure compensation to align with performance metrics that drive business success
- Create clear paths for advancement and growth
- Design intellectual property provisions that protect innovation while encouraging creativity
- Develop termination procedures that reduce disruption and litigation risk
Attorney-drafted contracts can incorporate these strategic elements while ensuring legal compliance—something generic templates simply cannot provide.
When Employees Should Seek Legal Review
For employees, reviewing an employment contract isn't just about checking salary figures. Several factors make legal review particularly valuable:
Executive positions. High-level roles often come with complex compensation structures, including equity, performance bonuses, and severance packages that warrant careful analysis.
Restrictive covenants. If the contract contains non-compete, non-solicitation, or confidentiality provisions, understanding their scope and enforceability is crucial before signing.
Career implications. Some contract terms can significantly impact your future career options, particularly in specialized fields or small industries.
Unusual terms or conditions. Any provisions that seem uncommon or particularly restrictive deserve extra scrutiny.
Negotiation leverage. Having legal counsel can provide both the knowledge and confidence to negotiate better terms.
The power imbalance between employers and individual employees makes professional guidance particularly valuable. While employers typically draft contracts with legal assistance, employees often face pressure to sign quickly without equivalent support.
Remember that employment contract terms typically favor the drafter—usually the employer. A lawyer representing your interests can identify problematic clauses and suggest reasonable modifications that protect your future.
Example – How Contract Review Changed an Outcome
Sarah, a marketing executive, received an attractive job offer from a competitor. The employment contract included standard-looking provisions about intellectual property and non-competition. Rather than signing immediately, Sarah invested in legal review.
Her attorney identified that the intellectual property clause was unusually broad, claiming ownership of any creative work—even projects unrelated to her employment created during personal time. Additionally, the non-compete would have prevented her from working in her specialized field for two years within a 100-mile radius if she left the company for any reason.
With this knowledge, Sarah negotiated modifications that narrowed the IP clause to work-related projects and limited the non-compete to circumstances where she voluntarily resigned to work for direct competitors. The company agreed to these reasonable changes, and Sarah accepted the position with appropriate protections in place.
Had she signed without review, Sarah could have lost rights to personal creative projects and faced severe career limitations if the position didn't work out.
The Cost-Benefit Analysis
The financial investment in legal services must be weighed against potential costs of proceeding without professional guidance.
For simple employment contract reviews, attorneys typically charge between $300 and $800. More complex contracts involving equity compensation, performance incentives, or executive positions may cost $500 to $1,000 or more to review. When attorneys draft contracts from scratch or provide negotiation services, costs increase accordingly.
Legal GPS Pro
Protect your business with our complete legal subscription service, designed by top startup attorneys.
- ✅ Complete Legal Toolkit
- ✅ 100+ Editable Contracts
- ✅ Affordable Legal Guidance
- ✅ Custom Legal Status Report
Attorneys generally use one of two billing approaches:
Flat fee pricing provides cost certainty, with a single price covering the entire service. This works well for straightforward contract reviews or standard contract creation.
Hourly billing may be used for more complex situations, particularly when negotiation is involved. Hourly rates typically range from $100 to $750, depending on attorney experience and location.
While these costs aren't insignificant, consider them in context. For employers, a single employment-related lawsuit can cost tens of thousands in legal fees, not counting potential damages or settlement costs. For employees, signing problematic contract terms could impact earning potential for years to come.
The cost-benefit equation becomes clearer when considering what's at stake. For high-value employment relationships, professional legal guidance represents a small percentage of the total compensation involved.
Pro Tip – Maximizing Value from Legal Services
To get the most from your investment in legal counsel:
For employers:
- Develop a relationship with an employment attorney who understands your business
- Create standardized templates for common positions that can be easily customized
- Schedule annual reviews of contract templates to ensure they remain current with changing laws
- Clearly communicate your business priorities so legal language supports strategic goals
For employees:
- Come prepared with specific questions and concerns
- Identify your priorities and negotiation points in advance
- Consider having the attorney coach you for negotiations rather than conducting them directly
- Request explanations of complex provisions in plain language so you fully understand what you're signing
What Employment Lawyers Actually Do
The value employment attorneys provide goes beyond simply reviewing documents. When reviewing or drafting employment contracts, lawyers typically:
Analyze contract language for legal compliance, enforceability, and potential risks specific to your situation.
Identify missing protections that should be added based on industry standards and your specific needs.
Suggest modifications to problematic provisions, balancing legal protection with practical business needs.
Explain implications of complex terms so you understand the full impact of what you're signing or proposing.
Provide negotiation guidance on which terms are standard, which deserve pushback, and what alternatives might be acceptable to both parties.
Customize provisions for your specific industry, role, and circumstances, going beyond one-size-fits-all templates.
For employers, attorneys ensure contracts protect legitimate business interests without overreaching in ways that could make provisions unenforceable. For employees, they identify terms that could unnecessarily restrict future opportunities or create unfair obligations.
Alternative Options to Full Legal Services
Not every situation warrants comprehensive legal representation. Some alternatives to consider:
Online legal platforms offer template contracts at lower costs, sometimes with basic customization options. These work best for straightforward employment relationships with minimal specialized requirements.
Contract review services provide focused legal review at lower price points than full-service law firms. These services highlight potential issues but may offer limited guidance on modifications or negotiations.
Legal clinics at law schools sometimes offer reduced-cost services to small businesses and individuals, though availability varies by location.
Business associations in some industries provide member access to vetted contract templates designed for specific fields.
These options make the most sense when:
- The employment relationship is relatively standard
- Compensation structures are straightforward
- The position doesn't involve unique intellectual property concerns
- Neither party has significant negotiation leverage
Remember that while these alternatives reduce upfront costs, they provide less protection than personalized legal guidance.
Example – The Hidden Clause
Michael hired a senior developer using a template contract he found online. Six months later, a competitor offered the developer a substantial salary increase. Only then did Michael discover his template's non-compete clause was unenforceable in his state due to recent legislative changes.
Had Michael invested in legal review, his attorney would have identified this issue and suggested alternative protections, such as a properly structured non-solicitation provision and confidentiality agreement. Instead, Michael lost a key team member and valuable intellectual property walked out the door with no legal recourse.
This scenario demonstrates how template contracts often fail to account for state-specific legal requirements or recent changes in employment law—exactly the issues attorneys are trained to identify.
Conclusion
The decision to hire a lawyer for employment contract matters should consider several factors:
For employers:
- The seniority and strategic importance of the position
- Access to confidential information or intellectual property
- Potential costs of future disputes or litigation
- Need for standardized contracts across multiple positions
- Specific industry regulations or requirements
For employees:
- Complexity of compensation and benefits
- Presence of restrictive covenants like non-competes
- Career impact of contract terms
- Negotiation leverage and opportunity
- Long-term implications for career development
When the employment relationship is straightforward and the stakes relatively low, DIY approaches may suffice. As complexity increases, so does the value of professional legal guidance.
Remember that employment contracts don't just formalize current arrangements—they establish the foundation for the entire employment relationship and can impact both parties long after the relationship ends. Given this long-term impact, investing in proper legal guidance often proves worthwhile for both employers and employees.
Employment Agreement Template
Get a customizable, attorney-drafted Employment Agreement Template built for legal protection.
Trusted by 1,000+ businesses to safeguard their LLCs.
FAQs About Employment Contract Legal Services
How long does it typically take for an attorney to review an employment contract? Simple contract reviews typically take 1-3 business days, though turnaround can be faster for urgent situations. More complex contracts or those requiring negotiation may take longer.
Can I negotiate changes to an employment contract after receiving it? Yes, employment contracts are negotiable, though your leverage depends on various factors including your position, skills, and the employer's flexibility. Legal counsel can help identify which terms are most important to negotiate.
What's the difference between an offer letter and an employment contract? Offer letters typically outline basic terms like salary and start date but aren't comprehensive legal documents. Employment contracts provide detailed terms and conditions that create binding legal obligations for both parties.
Should I be concerned if an employer doesn't want me to have an attorney review the contract? Yes. Reputable employers understand the importance of ensuring both parties fully understand their agreements. Resistance to legal review may signal potential issues with the contract terms.
Can employment contracts override state employment laws? No. Employment contracts must comply with applicable state and federal laws. Provisions that violate these laws generally won't be enforceable, even if both parties signed the agreement.
Is it worth hiring an attorney if I'm only being offered a standard contract? Even "standard" contracts should be reviewed to ensure they're standard in a positive way—conforming to industry norms and legal requirements—rather than unusually restrictive or one-sided.
Legal GPS Pro
Protect your business with our complete legal subscription service, designed by top startup attorneys.
- ✅ Complete Legal Toolkit
- ✅ 100+ Editable Contracts
- ✅ Affordable Legal Guidance
- ✅ Custom Legal Status Report
Do You Need a Lawyer to Fire an Employee?
Terminating an employee is rarely a pleasant experience. Beyond the emotional and practical challenges, employers often wonder about the legal risks...
Do You Need a Lawyer to Draft a Service Agreement?
If you provide services—whether you’re a freelancer, consultant, or agency—chances are you’ve either used or signed a service agreement. And you may...