Legal eagles

After practicing law for ten years, it was a welcome surprise to get a telephone call that wasn't from a client, adjuster, witness or another lawyer.          

It was Tom Boyles, wanting to know if I could offer advice to restaurant owners and if I would be interested in writing some pieces on general legal topics. I was happy to say yes, hoping I could help shed some light on things like contracts, employment issues and other legal dilemmas that small business owners tend to run into.           

Over the years, I've represented both big and small companies on everything from forming the company to dissolving it – and lots of things in between.  The one thing that's been consistent has been how a little advance planning by clients could have prevented a lot of legal headaches.  So, for this first installment, we might as well start at the beginning. Here I will discuss reasons why you should consider an attorney, finding one that fits your needs, costs related to attorneys and information about having others pay for your legal costs. In future articles, I will examine issues relating to employment, contracts and other topics that keep restaurant owners awake at night. So let's start at the beginning.

Should I Even Get an Attorney?

Modern business has the potential to generate many legal problems. This brings you to having to decide whether to hire an attorney and which one to get. Yes, lawyers can be expensive, but the decision to have a lawyer deal with a problem, or whether you should try to handle it yourself, depends in part on how expensive it will be not have a lawyer. Which, of course means you have to find out what it's going to cost before you can make the decision to hire one at all. Initial consultations aren't always free, so always ask if there will be a charge when setting an appointment. Once you're there, ask if you really need a lawyer for this problem.  A good attorney will lay out the pros and cons of action and inaction, as well as the expenses associated with each choice so you can decide how to proceed.  But, that still brings us back to finding one to talk to.

Finding the Mouthpiece That Fits

Go on down to the bottom of the article and read the disclaimer. Go ahead. It's exactly what you'd expect a lawyer to put in a magazine article – that what I'm telling you may not apply to your situation so the answer to your problem could be different.   You have to find your own lawyer to advise you on your particular problem. But how do you do that?

Word of mouth and referrals are the most common methods, but not the only ones. State bar associations can be easily located on the Internet or in the phone book. Another excellent resource is the Martindale directory (www.martindale.com), where you can search for attorneys by location, areas of practice, biographical information and other factors. An attorney's listing on Martindale may tell you how long they've been out of law school, have links to their firm's website, list types of cases they handle and even contain "ratings" of some attorneys based upon their reputation among judges and other attorneys.

Second Opinions

After an initial meeting, I commonly tell prospective clients that I wouldn't trust my health to the opinion of just one doctor and therefore, I'd get a second opinion. It's no different with a legal problem. Visit with several attorneys to find out what sort of advice they give, the costs involved and how well you think you could work with them. Once you've had a chance to compare them, then you'll be in a much better position to find a lawyer that's the right fit for you, your business and your particular legal problem.

How Much is this Going to Cost?

Lawyers typically charge fees in three different ways – a contingency fee, a flat rate fee or an hourly rate. Contingency fees involve paying your lawyer "only if you win" and typically are used when trying to collect money from someone else. Flat rate fees are just that – a set amount for a particular service such as drafting a contract. Hourly rates are the norm in business and will likely be different for attorneys even within the same firm as well as hourly rates for paralegals and support staff. In an hourly rate situation, the attorney typically asks for money up front as a "retainer," which is placed in the attorney's trust account. That money remains yours until it's earned by the lawyer and is more or less a deposit toward fees that will be incurred in the future. If the retainer is not used up by the time the matter is resolved, the balance can either come back to you or remain in the trust account for any future representation from that same attorney.          

In an hourly rate situation, its very difficult to predict exactly how much attorney's fees will total, but your attorney should still be able to give you an estimated range. They should also be able to tell you what factors will affect the fee so you can be forewarned about how changes in your case can increase or decrease how much you'll spend. Remember that in an hourly rate situation, time is always money. You can expect that when the attorney spends any time on your case, you will be charged, even if it's just a phone call that you couldn't take.          

Regardless of how the attorney's fees are paid, the client is almost always charged for expenses such as long distance telephone charges, copies and postage. This should be spelled out in an agreement signed by you and the attorney, or at least in a letter from the attorney spelling out the details. If one is not provided to you, ask for a schedule of these expenses and find out how they are going to be charged.

Make Someone Else Pay For It             

Lots of clients ask me, "Can I get the other side to pay your fees if we win?" The answer is "maybe." In Great Britain, the "English Rule" states the losing party pays the attorney's fees and litigation expenses for both sides. Conversely, the "American Rule" is that each side will pay for their own attorney's fees and expenses regardless of who wins. However, there are exceptions to both rules. Despite the general rule, your case may present an opportunity to collect your attorney's fees and expenses from the other side.          

Don't forget, thought, that there are also other people who might pay for your legal representation. Insurance policies can cover a broad spectrum of claims and commonly include provisions to provide you with legal representation. Your contracts or agreements with other people or companies might provide that in the event of a dispute, the losing party has to pay attorney's fees and expenses for both sides – this is also something to consider when entering into contracts and is something to watch out for when signing them. If someone claims that you're responsible for someone else's actions, then you might be able to get that person (or their insurance company) to foot the bill. Once you talk to an attorney, don't forget to ask about how you might get someone else to pay the bills.

Stay Informed                  

One of the biggest complaints about attorneys is that they don't return phone calls or they don't keep the client informed. Most large companies require their outside attorneys to submit  regular "status reports" of the matters they work on. Ask your lawyer to do the same – a one page letter every so often letting you know where things stand not only keeps you informed, but generates an excellent record of how your case progressed if you ever need it or have to explain what's going on. Also, when you go to the lawyer's office, be sure and introduce yourself to their assistant or secretary and get their name.  When your lawyer is out of the office or unavailable, the office staff is a great way to stay posted on ongoing developments.          

Having to get an attorney may not be the most enjoyable part of your business, but a little additional effort on your part at the front end of any legal problem can help ensure that you get the right representation. It also means that you can help yourself get back to making money instead of spending it.          

If you have a topic that you would like to see discussed in my next installment, please email Tom Boyles at tom@pmq.com or fax (662) 234-0665 and put "Legal Eagles" in the subject line.