I recently saw that there were two women that went on Shark Tank about two years and pitched a company called HelloPrenup. One of the women is a family law attorney and the other is a software developer. The website allows couples to go onto the website, fill out their information, and generate the prenup. They were successful on the show and Kevin O'Leary invested. The offer was $150,000 for 30% of the company.
Today, HelloPrenup is worth over 3 million dollars. It has proven to be successful. I saw an article that referred to it as "a TurboTax for prenuptial agreements." For someone who wants a prenup and does not want to go through the hassle and expense of getting their own lawyer, I suppose this is an attractive option. It is a flat fee of $599 per couple. Although this seems like an interesting idea, as a law student, I have a lot of questions about this business model and the legal ramifications.
My first thought was that this seems like a tricky idea due to varying state laws. I do not really understand how one website can provide prenups for couples in all 50 states. I am sure they have some sort of way to deal with this, but when reading the FAQs on the website I was not able to get a quick answer on this. All it says is that you will be paired with an attorney to finalize your agreement. With this in mind, I think that this website was clearly not created with a lawyer's opinion in mind, but rather a non-lawyer who wants a quick prenup written up.
My second thought, which I suppose is a bit more of a personal one, was that if I were going seeking an agreement as important as a prenup, I would not want it done on a random website where all you do is input information. It seems like a plug and chug system that leaves room for a lot of error. I am not bashing the company, but I do not think I would want to use an online platform for something like that.
It is interesting to think about how successful the company is though, and what that could mean for the future of legal services. As we have discussed AI and technology within the legal field, this is something else to consider. Can other legal services be thrown into a website? Will it become a norm to create contractual agreements online rather than with a specifically hired attorney?
This also led me to wonder how the attorneys are paid, especially since each prenup is just a flat fee. I am curious as to if this is a side business for some lawyers, and whether it is a successful one. I do not know too much about the website as a whole, as I have just found out about it and just began to research it, but it immediately left me with a multitude of thoughts of questions.
Prenuptial agreement litigation is a big part of my practice. I handle many appeals where the validity of a prenup is the issue. I also ghostwrite motions and briefs for family law attorneys in divorce cases either challenging or seeking to enforce prenuptial agreements.
ReplyDeleteThere is a Uniform Premarital and Marital Agreements Act from 2012 that has been adopted in a couple states and a Uniform Premarital Agreement Act that has been adopted in many more states, including Florida. Drafting for couples living in a Uniform Act state will be simpler than for couples living in states without a Uniform Act (like my state, Michigan).
I no longer draft premarital agreements because the amount of money I can charge for one pales in comparison to the potential liability of a court many years later decides not to enforce it. So I leave premartial agreement drafting to larger estate planning firms that can absorb the potential liability problems.
I can see how services like Helloprenup could be useful and I don't think they take any money out of the pockets of solo and small firm lawyers (which includes nearly all family law practitioners) because most of us have decided not to draft these risky documents anyway.
I had not heard of this website before, but I agree that it brings in questions about the validity of prenups down the road and the room for error that could occur in a model like this. Especially if couples are paired with a lawyer for only the finalization stage, I believe there is lots of provisions that would be left out, as non-lawyer couples might not be able to foresee important issues that may arise and a lawyer who does not know the specifics of the couples finances, values, and assets might not be able to be transparent with them about what should be in the prenup. It seems like a good website for getting the basics, but more comprehensive prenups would likely benefit by being created with the help of a lawyer who can draft the prenup from the start and with more information.
ReplyDeleteThis is really interesting and I've never heard of this before! I see how there could be both benefits and drawbacks to this. It is quick, easy, and probably relatively cheap. However are they spending enough time on it to make sure that it is correct??
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