Every week, we see the same pattern. A founder panicking because a deal or contract is needed next week and within 10 minutes it is clear the legal groundwork was never laid. The founder is exposed: a shareholders’ agreement template does not reflect how the business is actually owned; the intellectual property sits with a founder personally not vested in the company, or worse has been generated using AI leaving a potential infringement action in the balance. No one asked the right questions and the founder failed to take advice early on due to the costs and accepted template terms without understanding them. As a result the investment stalls under due diligence as the documents cannot withstand scrutiny, the investor negotiates a lower valuation, or worse, the deal collapses entirely.
These are not unusual cases. They are the ordinary consequence of a profession that has collectively treated startup and SME work as a secondary concern.
The UK produces thousands of new businesses each year. Many are unadvised entirely; others rely on online tools, template providers, or documents fed into open AI. The result is a false economy. Cheap resources feel sufficient until they are not. When the documents finally come into play, the costs vastly exceed what proper advice would have cost at the outset. The deal falls apart, the valuation drops, shareholders split, or a debt goes unrecovered because the terms were fatally wrong.Template and AI-generated agreements carry risks that founders are rarely positioned to assess. They are generic by design. They do not know the shareholder dynamic, the revenue model, the regulatory exposure, or the investor appetite. Restrictive covenants are often too wide to be enforceable. Confidentiality provisions fail to protect patents. Data protection obligations go unaddressed. These are not theoretical risks they are the reasons investment rounds are being rejected and disputes are closing businesses that might otherwise have thrived. We see this daily.
There is also a regulatory dimension our profession has been slow to address. The Law Society and the Solicitors Regulation Authority have not done enough to communicate the value of the protected title of ‘solicitor’ to the SME market. That title means training, regulation, professional indemnity insurance and accountability. It means genuine advice, not just document production. When founders cannot distinguish between a regulated solicitor and an unregulated ‘lawyer’ or document provider, the profession bears responsibility for that failure of communication.I am not arguing for simplification. Founders do not need the law made easier they need it made accessible. There is a difference.
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Fixed fees, plain language, and an understanding of commercial realities are not a lowering of standards. They are how solicitors build trust with this client group. Founders need to understand and value bespoke legal advice over templates, and recognise that the cost reflects experienced, qualified support from someone accountable if things go wrong. It is also worth noting that charging small regulated firms the same rates as large corporate practices, combined with excessive administrative demands, is restricting competitive access to quality advice a cycle that urgently needs addressing.
Research from the Legal Services Board puts the number of small businesses facing legal issues each year at approximately 1.8 million. Only one in 10 small business owners regards solicitors as cost-effective, and half handle legal matters entirely on their own. That is not a market being served. It is a market being abandoned, and the consequences fall entirely on the founders left without support.
Most business owners assume all ‘legal’ service providers are regulated. They are not. Ninety per cent of consumers say regulation would increase their trust, yet there is no single accessible resource that makes the distinction clear. ‘Lawyer’ is not a protected title. ‘Legal’ is attached to countless platforms and providers, misleading consumers into thinking they are engaging trained, regulated solicitors. The solicitor title exists for good reason. The profession has not done enough to make that visible to the people who need it most including those coming from overseas.
The root problem is not technology. It is the absence of genuine advice with the technology benefit. A document platform cannot ask the questions a solicitor asks the ones that reveal the full commercial context. Founders using AI-generated contracts are often unaware of what questions they should even be asking. By the time they find out, the cost of correction exceeds whatever was saved at the outset. The most successful founders of the next decade will demand both technology and expertise. AI can draft, organise and automate at speed, but it cannot read the room in a negotiation, spot the clause that will cost you your company in three years, or tell you when walking away is the smartest move you will ever make. A solicitor is not the opposite of innovation they are the human layer that makes innovation safe to scale. Use technology to move fast, but use a solicitor to make sure you are moving in the right direction.
We call on the SRA to launch a public awareness campaign so that every founder, every SME, every startup owner understands what a solicitor actually does and the value it brings compared to the unregulated and uninsured. Restoring that confidence should be the profession’s first move. Accessible, reliable legal advice should be the second.We can do better. And we must.
Karen Holden is managing director at Allin1 Advisory limited
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