I have some experience in this area. At work we often have to translate (or have translated) bid documents, contracts, documentation, training materials and software menus. Further, my wife does contract work proof-reading translations.

Summary: Translating well is very, very hard. Most translations are poor. Good translations are usually very expensive.

You will get what you pay for, with some margin of error. If someone is cheap, I most strongly recommend you do some additional work getting the results checked. Make sure you have a method of evaluating the translations.

We assess the quality required, then use professional translators in the appropriate prices range. Poor translations will noticeably affect your users' perceptions of your product.

And no, I don't think there is a happy meduim you've missed. I would also advise you to be careful using the Mechanical Turk without an independent method of assessing the result.

Sorry to be so negative, but we've had some bad experiences through over-optimism. Learn caution from our mistakes.

You are right, particularly about legal documents, but there are ways to go about it. Translating the text of a web site is not a huge amount of work. One important thing is to use a native speaker conversant with current usage in your target country and s/he should have some knowledge of the problem domain, law, medicine, as appropriate. A good place to look for translators is at a local university with a lqrge population of foreigners.

We have had very bad experiences with such ad hoc arrangements. One customer - fortunately a good one who effectively counts as a friend - was reduced to tears of laughter by one translation, and it was one that we'd had checked by two independent methods.

Give http://translationcreation.com a try. I worked for this startup a couple years ago, I saw recently that it was finally launched, looking good.