Two friends buy a unit together. A wife guarantees her husband’s business loan. Two business partners sign a shareholders agreement. Parents lend their adult children the deposit for a first home. A company buys a business and its director has to give a personal guarantee.
In each of these situations, I hear the same thing:
“We want to keep it simple, so we just want to use one lawyer.”
It is a reasonable thing to want when everyone is on the same page. Unfortunately, it almost never makes things simpler.
I have this conversation several times a week, and I understand the frustration. From the outside, a second lawyer can look like a second bill and a second set of opinions, slowing down a deal that everyone has already agreed on.
It can look like lawyers being lawyers. It isn’t.
Using one lawyer for everyone usually makes a deal slower, harder and riskier, even when everyone agrees on the basic terms. Here’s why.
What a lawyer can and can’t do for two people
A lawyer owes each client a duty to act in that client’s best interests.
In most transactions involving two people, some terms will be better for one person and worse for the other. The price. The repayment terms. The warranties. The limit on a guarantee. The circumstances in which someone can exit.
A lawyer cannot properly push hard for both sides on the same issue.
That is why the professional conduct rules that apply to solicitors in NSW restrict acting for clients whose interests may conflict. A solicitor can act for more than one person only in limited circumstances, and only if each client understands the position and agrees to it.
And if a genuine disagreement develops, the solicitor may have to stop acting for one or both clients.
There is another problem that people often do not think about: confidentiality.
If one lawyer acts for two people together, neither can have a private conversation with that lawyer about the transaction. What one tells the lawyer may need to be disclosed to the other.
So the conversations people most need to have can become the ones they feel unable to have.
“What happens to me if we split up?”
“I’m not sure I could cover this if the business goes under.”
“I don’t think they understand what they’re agreeing to.”
People often say to me, “But we agree on everything.”
And that may feel true. You agree on the things you have discussed: the price, the split, the start date.
But legal documents will also cover the things you have not thought about yet.
What happens if one business partner wants out in three years? What happens if the couple who borrowed the deposit separate?
Those questions often do not come up when everyone is getting along. They come up when the lawyer starts working through the document.
Agreeing to the headline terms is also not the same as understanding the legal consequences of what you are signing.
A director may agree to “give a guarantee” without realising that the guarantee is unlimited, continues after they leave the company, or covers debts the company has not incurred yet.
So when I decline to act for everyone, it is not caution for its own sake. I simply cannot do the job properly for both people at once, particularly the parts that happen behind the scenes: identifying risks, drafting for different possibilities and negotiating protections.
When only one side has a lawyer
This is the situation I see most often.
One party has a lawyer. The other trusts them, or trusts the deal, and decides they do not need one.
The problem is that your lawyer cannot explain the documents to the other party. Their job is to protect you, and advising the other side would put them in a conflict.
So the other person reads the documents alone.
They have questions. They worry about something. They show the documents to a friend, their accountant or an AI chatbot. They come back late in the process with changes, or with a lawyer they have just found, and points everyone thought were settled are suddenly open again.
Or they do not read the documents carefully at all. They simply sign.
That might be quicker at the time, but it leaves the deal exposed if something goes wrong later.
Either way, a lawyer working with another lawyer is usually much more efficient than a lawyer trying to deal carefully and prudently with an unrepresented person on the other side.
Agreed today, challenged later
An agreement that everyone is happy with today can look very different when circumstances change.
A couple separate. A business fails. Business partners fall out. Someone dies and their family takes a different view of what was agreed.
The person who has lost out will then look closely at how the agreement was made.
Did they understand what they were signing? Were they under pressure or someone else’s influence? Were they at a disadvantage that the other person took advantage of?
Depending on the answers, a court may in some circumstances give relief from the transaction.
Independent legal advice is strong evidence that a person understood what they were agreeing to. It protects both sides, not just the person receiving the advice.
So if I am acting for you, I will often encourage the other side to get their own lawyer. It might seem strange, but everything we have worked to document is at greater risk if the other person has not properly understood what they have signed.
That is also why lenders and landlords often require a guarantor to get independent legal advice before they will accept a guarantee.
What happens when one lawyer acts for both?
Sometimes people try to solve all of this by having one lawyer act for both sides.
That is usually slower, not faster.
A lawyer acting for both sides cannot tell either of you what you should do. They can explain the options, but they cannot recommend an option that benefits one client at the expense of the other.
Take parents lending their adult child money for a house deposit.
Should the loan be repayable on demand, or only when the house is sold? Should it bear interest? What happens if the couple separate?
Each answer may be better for one side and worse for the other, so the parties have to work it out themselves.
This happens in almost every transaction, not just contentious ones, because good legal documents raise questions nobody thought about at the beginning.
With one lawyer, those questions either do not get properly answered, or they turn into a long negotiation with nobody guiding either side. That can take much longer than anyone expected.
If someone decides partway through that they want their own lawyer after all, the original lawyer will usually have to stop acting for both people. They cannot simply continue for one of them, because they have already acted for the other in the same matter and may know their position, plans and concerns.
The result is exactly what you were trying to avoid: more time, more cost and more complication.
What simple actually looks like
In an agreed transaction, the simplest arrangement is often one lawyer drafting and one lawyer reviewing.
- One party’s lawyer prepares the documents based on the agreed terms.
- The other party’s lawyer reviews them, explains them to their client and raises anything that needs attention.
- The lawyers resolve any issues between them.
- Everyone signs knowing what they are signing.
A review usually costs much less than drafting, and many lawyers offer a fixed fee for a straightforward review. If everything really is agreed, it can be very quick.
If the review uncovers a disagreement or something that seems unfair, it is much better to find out before everyone signs than after things have gone wrong.
That is what independent legal advice is really buying you: not another lawyer for the sake of having another lawyer, but someone whose only job is to look after one side of the transaction.
How to raise it without causing offence
The hardest part is often social, not legal. Suggesting that your friend, partner or parents get their own lawyer can feel like saying you do not trust them.
It can help to frame it as protection for both of you:
“My lawyer has said you should get your own advice before you sign. It protects both of us, and it means the agreement will stand up if anything ever happens.”
You can also let the lawyer be the reason. That is part of what we are there for.
It is also not unusual for one party to offer to pay for the other person’s legal review. The reviewing lawyer still acts only for their own client, and the cost is small in the context of the transaction.
Sometimes the simplest way to get a deal done is to have two lawyers, not one.
If you are buying into a business, selling part of one, or otherwise dealing with multi-party documents, feel free to get in touch. I can help you work out the best representation structure to suit your transaction and circumstances.
