| The time to develop a working relationship with an attorney should not happen when you are all stressed to the max by an instant legal crisis.|
Understandably, many business owners feel uneasy thinking about lawyers and legal issues. It is not usually a blood-curdling, breath-taking fear, but more like a sudden turbulence in the pit of the stomach. Fortunately, some discomfort can be eased through a better understanding of the lawyer-client relationship and the benefits gained from timely legal advice and support.
One complicated, uninsured lawsuit can cost many times a lawyer's annual retainer, whether won or lost. That makes the right lawyer a valuable business asset. Having a company lawyer is a smart risk management precaution. It is comparable to buying a legal health insurance policy.
Here are Several Business Legal Situations That Are Likely to Be Uninsured:
• State and Federal Tax Problems
• Contract Review and Disputes, including Insurance Contracts
• Real Estate Rental, Purchase, Sale and Transfer
• Land Use
• State and Federal Regulatory Inquiries and Interactions
• New Products and Services Development
• Employee Relations
• Debt Collection
• Criminal Prosecution
Even when you are insured, your company attorney can be the knowledgeable buffer between you and the insurance company's attorney, especially in gray area situations when the insurance company follows up your claim reporting letter with a denial of coverage.
Always remember whose interest the insurance company's lawyers are protecting. Their priority is protecting their client, the insurance company. And, there are times when your interests as the insured and the insurance company's interests are in conflict. For example, you have a workers compensation situation where the employee is clearly trying to take the company for a ride. It is in the insurance company's best interest to keep the cost of the total claim as low as possible. It is in your best interest to win the case to avoid setting the scene for other employees to abuse the system and drive your Experience Modification and premiums up. In most insurance policies, the insurance company has settlement authority, not you, the insured.
Every business needs the professional expertise of a well-rounded lawyer its executives can call any time there is the slightest concern about a situation.
Seth Eben Shapiro, legal counsel practicing in Saratoga Springs, New York, when I started my corporation, stated: “A lawyer is one of your suppliers, providing you with peace of mind that what you are doing is not going to result in either arrest or bankruptcy.”
Whether hiring a sole practitioner or a larger firm, a company is best served by an annual retainer fee arrangement. This gives the small and medium-sized company the advantage of off-premises house counsel familiar with your company. You can speak freely in a stream-of-consciousness manner that would not be possible with a stranger. Shapiro said, “Retainer clients feel free to use their company attorney, as opposed to worrying if they really want to spend the money. Recognize that a lawyer cannot be cost efficient unless a business uses a lawyer efficiently. Using a lawyer efficiently begins with a company hiring a lawyer before it is in trouble.”
A well-utilized company lawyer can be the bridge between financial stability and financial vulnerability. Hiring a lawyer in the middle of a legal battle that has become too much for you to handle puts frustrating pressure on both you and the lawyer. Thus, you begin a vital relationship with a stranger. This is neither efficient nor smart.
When hiring a lawyer, the most important thing to understand about a lawyer is that his or her product is as concrete as yours. If you don’t believe that about your lawyer, your relationship cannot work to your mutual benefit.
Just what is it that a lawyer sells to a client? Services. Like doctors, lawyers are guided by codes of professional responsibility. For example, of the nine canons listed in the American Bar Association’s recommended "Code of Professional Responsibility," four relate directly to the lawyer-client relationship–
➢ Canon 4: A lawyer should preserve the confidences and secrets of a client.
➢ Canon 5: A lawyer should exercise independent professional judgment on behalf of a client.
➢ Canon 6: A lawyer should represent a client competently.
➢ Canon 7: A lawyer should represent a client zealously within the bounds of the law.
Seth Shapiro told me: “The most important service a lawyer provides is the ability to be able to think objectively about a situation that you are not able to be objective about. An attorney brings to a client three essential qualities: research, interpretation and advocacy.”
The next important service a lawyer provides is communication skills. Communication skills are a deciding factor in the final outcome of any case. Your lawyer needs to be able to let you know what is going on in plain terms, not legalese. In addition, your lawyer needs to be able to articulate your position in the strongest possible manner with opposing counsel and within the legal system.
The Way the Process Works in Principle–
When you take a problem to your lawyer, he or she gathers the needed facts, researches potential solutions and guides you toward the most realistic and practical choice. Next, the lawyer interprets your chances of success, based on available legal precedent, and explains the process to you. If you, based on need, chance of success, and cost, decide to go forward with the lawyer’s representation, the lawyer becomes your advocate to achieve the outcome in your company's best interest.
In Practice, Both the Legal System And Lawyers Can Vary the Outcome:
1. The Judicial System is a Political System. Before proceeding with a case with a lawyer, examine that lawyer's tract record in similar cases, not only in the local court system, but also when final outcomes are decided outside legal systems.
2. Lawyers’ Skills Are Diverse. Just like any group providing professional services, some are excellent or good, while others are at varying levels of incompetence.
3. There Are Many Types of Practices. Specialists are usually more expensive than general practice attorneys. For most businesses, a good general practitioner will be the most efficient choice. If a specialist is required, your lawyer is more qualified to choose candidates and work with the specialist on your behalf.
4. Law Firms Vary in Size. From sole practitioners to mammoth, multinational practices, each company needs to find a comfortable situation.
Garro Guidelines in Choosing the Best Lawyer for Your Company:
• The Cost Decision: There are five common types of fee arrangements: annual retainer, specific job, per hour, per day, and contingency (lawyer gets a percentage of amount recovered on your behalf). For general business services, a company must choose among the first four types. Expect to pay $5,000 and up for a retainer and $200-$500 per hour.
• The Type of Law Firm Decision: There are advantages and disadvantages with sole practitioners, mid-sized, and large firms. If you want to be certain who will be on the other end of the telephone when you call, the sole practitioner or small firm is your best choice. Remember, however, that a sole practitioner is not always going to be available, and you may have to hire a specialist in some situations. Shapiro told me: “There are few legal problems that require immediately legal response. However, like doctors, sole practitioners commonly have a cooperative system where clients have a lawyer available to them in case of emergency.” Large law firms have the specialists in-house, but small businesses can get entry level associates whose fee schedules are often the same as a more experienced sole practitioner or small firm lawyer. Entry level associates often get work nobody else wants, juggle in-house career pressures.
• Making the Final Decision: Avoid choosing from a pool of one. Speak with at least three firms. That way, you see varying personalities, capabilities, fee schedule possibilities, and are better able to make an informed decision. Before making your final decision, Shapiro advised, “Ask a prospective lawyer about issues other than law to determine how his or her mind works. Hire the attorney you feel comfortable with.”
Choosing a sharp, efficient, experienced lawyer who you like and trust enough to confide in is only the beginning. In order to get good value for your company’s legal expense investment, both you and your lawyer need to be available, organized, dependable, and reasonable. Both of you need to be willing to do the necessary research and provide high quality information, as required, in a timely manner. Feeling comfortable and developing a mutually efficient process will enable you to speak freely, take advice, and willingly pay for services in a win-win relationship.
Have questions on how to tame your constant communication chaos? Give me a call, 518-587-9999.