So, I have handled a lot of business litigation in my career. I also have handled many business and personal transactions and disputes: setting up entities, drafting contracts, drafting bylaws and operating agreements, negotiating deals of over $100 million, handling secured transactions, the sale and acquisition of real and personal property, and most other aspects of commerce. The most frustrating aspect of my job? Some would suggest the stress of complex litigation, trial and arguing on a daily basis. Sure, these aspects of law are trying, but the most frustrating aspect of law is watching clients encounter serious and expensive legal issues which would have been prevented with a simple consultation or less than an hour’s worth of legal work.
A very popular saying is that “No one likes a lawyer until she needs one.” True, most people do not eagerly anticipate going to see an attorney. It is unfamiliar territory, and as such, often uneasy, and people fear it is too expensive. Probably how most feel about visiting the dentist. (Actually, most people likely prefer visiting the dentist.) But, when is it that someone actually needs a lawyer? Eighty percent of the time in my career, clients decide they need a lawyer when something goes wrong – business relationships deteriorate, the wonderful deal that was going to be a career-changer falls apart, their home is about to be sold in foreclosure, their employees are suing them, etc.
“…the most frustrating aspect of law is watching clients encounter serious and expensive legal issues which would have been prevented with a simple consultation or less than an hour’s worth of legal work.”
What if those people decided they needed a lawyer before the problems started? Before they signed that agreement? Before disciplinary action against a license commenced? Before starting a business using poor form documents found using Google or LegalZoom? Well, the answer is that 9 times out of 10, when a client comes to me with a very expensive problem to fix, I just look down and ask why, in handling a transaction or other issue of such great importance, they did not seek legal counsel at the beginning. The answer is usually, “I totally trusted this person/company,” or “we were best friends since high school and we knew we would always get along,” or “this didn’t seem too complicated – I am highly educated and felt I could handle it myself.” And my answer is usually, “if you had brought this to me at the beginning, it would have cost you a few hundred dollars…now you are looking at a minimum of ten, twenty, thirty thousand dollars.” Often, the actual cost is far more.
“And my answer is usually, ‘if you had brought this to me at the beginning, it would have cost you a few hundred dollars…now you are looking at a minimum of ten, twenty, thirty thousand dollars.’ Often, the actual cost is far more.”
Case in point: I had a client that loaned her son and daughter-in-law funds to purchase a very expensive house. These people were very well educated and successful. But they knew nothing about the law. It would have taken me 5 minutes to point out the significant legal issues with this agreement before the mother handed over the cash. Unfortunately, they did not seek local legal
counsel, and when the marriage fell apart, we were in intense litigation over the document for over 3 years. After 3 years and more than $250,000 in total legal fees, the parties settled. The point is that less than $500 of legal fees at the front end would have saved all of that headache, and the legal fees could have been used to fund the grandchildren’s college fund.
Another case involved a business owner that did not properly establish his company under the state statutes. When my client sued his company over a business deal, we were able to go after the owner individually. Because the owner did not spend a few hundred dollars to have a lawyer properly set up his business, my client was able to go after his own personal property – including bank accounts, jewelry, cars and some real property – for hundreds of thousands of dollars.
“These situations, to me, are akin to a person failing to have routine medical care, who waits to see a doctor until the cancer has fully metastasized.”
Sure, the work keeps lawyers in business. But, I like my clients to be happy. Once things go terribly wrong, the result is often a zero sum situation. Even if we win the case, months or years are spent in exhausting litigation and tens of thousands (at least) are spent in attorney fees. Then, even if you win, can you collect on the judgment? If the losing party in the case has no assets, the judgment may be worth only the piece of paper on which it is written.
These situations, to me, are akin to a person failing to have routine medical care, who waits to see a doctor until the cancer has fully metastasized. The doctors will do everything possible to save the patient, but all could have been avoided with a routine medical exam.
“Find a lawyer you trust and sleep better at night. It is insurance for your future.”
So, if you are beginning your career or have been in business for dozens of years, are you sure you are protected from liability in your company? Are you sure your independent contractor and employment agreements are enforceable? For instance, if you treat an independent contractor as an employee, you are possibly subjecting yourself to serious liability. Are your non-compete agreements enforceable? Can your business partner sink your company with impunity? These are just small examples of the most frequent issues encountered by business lawyers. You may think you are protected, but do you want to find out on the front end by spending a little, or take the chance of losing everything if you are wrong?
Find a lawyer you trust to ensure your business is protected as much as possible, to avoid potentially horrendous situations, and sleep better at night. It is insurance for your future.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
All rights reserved. This copyrighted material may not be re-published without permission of the author.
Michelle Champion is an attorney licensed in Florida and Tennessee, and represents clients throughout the state in all aspects of business law. For further information, contact Michelle R. Champion, Esq. at firstname.lastname@example.org or 423.326.5000.