| I don't know who first said it. But I am often | | | | and where law suits must be filed, you really should |
| reminded of the illustrious observation: "It isn't what | | | | consult with an attorney before you sign the silly |
| he doesn't know that scares me. It's what he knows | | | | thing. |
| for sure that just ain't so." Most of the time, business | | | | 2. You can almost always settle your disputed debts |
| decision makers are highly skilled at identifying the | | | | for less than the full amount. |
| root of the issue. They know how to recognize the | | | | What if you have received invoices with which you |
| important aspects and throw out the red herrings. | | | | disagree and have not been able to resolve your |
| Without that skill, they would not last very long in | | | | differences? The demands have gotten uglier. And |
| the world of business. But they too can be victims of | | | | now the other company is threatening or more |
| their own prejudices and misconceptions. With all of | | | | usually (implying) litigation if not paid in full by a |
| the hype about our litigious society and how easy | | | | specific date. For them, it is now necessary to weigh |
| some think it is to sue companies and get huge | | | | the cost of retaining a lawyer and the risk of losing |
| awards or settlements, it's easy to forget that the | | | | against playing this out against the bird in the hand |
| business person on the other side almost never | | | | they could get by settling now. Unless you signed a |
| wants a law suit any more than you do. | | | | contract that says the loser pays attorney fees, |
| Many wasted opportunities could be leveraged by | | | | odds are they will not collect attorney fees even if |
| small business owners if they had a better | | | | they do win. So the potential cost of going that |
| awareness of the other company's aversion to | | | | route could be significant for them. |
| litigation and willingness to take reasonable measures | | | | The fact of the matter is that with the exception of |
| to avoid it. Entrepreneurs spend a lot of time finding | | | | companies such as the insurance industry whose |
| ways to make it easy for their customers to buy. It | | | | business structure anticipates a steady stream of law |
| is amazing how little time some of them spend | | | | suits, most businesses hate law suits. They view |
| thinking about ways to make it easy to resolve | | | | them as an enormous distraction and a waste of |
| disputes without resorting to the ugly distractions of | | | | their time and resources. Very large corporations with |
| mediation, arbitration, or litigation. | | | | their own legal departments have the luxury of |
| With that in mind, here are some facts and common | | | | making a pure cost/benefit analysis before deciding |
| sense ideas that could make a big difference in your | | | | whether to engage in an avoidable law suit. But for |
| business; | | | | small businesses, the cost is too unpredictable and |
| 1. You don't have to sign everything that is put in | | | | just too far removed from the processes and |
| front of you | | | | infrastructure upon which their business model is |
| Most services contracts are not written in stone. And | | | | based. Therefore, unless the disputed amount is very |
| many companies will accept minor changes. People | | | | large, they will almost always seriously consider any |
| are sometimes afraid to make even the slightest | | | | reasonable offer just to get it off their plate. |
| change to a contractual document for several (usually | | | | However, they probably will not agree to settle for |
| imaginary) reasons. They are afraid this will | | | | what you asked. So make your first offer at least |
| automatically get the lawyers involved making | | | | two iterations lower than what you expect them to |
| everything more expensive and slowing down the | | | | take. |
| process. But in my experience, that fear is usually | | | | 3. You don't always "get what you pay for" when |
| unfounded. | | | | you retain a Big-Gun law firm for legal services. |
| Let's say you have read over the contract and found | | | | As in-house counsel for an information technology |
| that you will be billed for late payments if your | | | | company, I have worked with several of the largest |
| payment is not received within thirty days. Your | | | | law firms in St. Louis over the years. I have also |
| typical schedule for processing accounts payable does | | | | worked with some of the best lawyers. But some of |
| not exactly match the other company's billing cycle. | | | | the best lawyers do not work for the biggest law |
| And it is quite possible that your payment could | | | | firms. In fact, some of the best Missouri lawyers I |
| arrive more than thirty calendar days after a given | | | | know are sole practitioners or from small firms. When |
| invoice. You take their contract, draw a line through | | | | you consider what you get versus what you pay for, |
| that sentence and write above the strike-though | | | | going with the Big-Guns doesn't always make the |
| changing thirty days to forty-five days. You then fax | | | | most sense. Big firms have the advantage of a large |
| or email the modified document along with a phone | | | | pool of experiences and resources to draw from. But |
| call explaining why you need this change. | | | | they will not always give you the best results for the |
| If this was a serious concern for you, it has probably | | | | least dollars. |
| come up before with some of their other customers. | | | | Most lawyers will tell you that until an attorney has |
| If so, they already know whether or not they can | | | | been in practice for at least five years, the level of |
| live with this change and will either approve or deny it | | | | experience could be a big factor in the results you |
| right away. Notice that I did not suggest simply calling | | | | are likely to see. I am sure there are exceptions, but |
| them without sending a redlined version by fax or | | | | in general it takes about five years of real world |
| email. That is because this makes it too easy for | | | | experience for an attorney to develop the skills to |
| them to say no. It also places the responsibility of | | | | do his or her best job for you. When you first bring |
| making the change on them. In their organization, | | | | your case to a big law firm, you will probably speak |
| that may mean passing the document on to another | | | | with a partner (translate that to mean you will pay |
| gate keeper who manages contract documents. For | | | | from $250 per hour to $500 per hour or more for |
| them, it has just become much easier to tell you | | | | the privilege). There is a good chance that most of |
| their company never does that than to work with | | | | your direct consultation will also be with a partner. But |
| you. On the other hand, if you have already | | | | much of the work including drafting of legal |
| submitted a signed contract with the change already | | | | documents, research, and sometimes even |
| made, it is often easier for them to record the "sale" | | | | negotiations with legal counsel for the other side, will |
| and process it than to go back and forth over it. If | | | | be performed by associates or paralegals. Associates |
| your change has not been requested and clearly | | | | typically have less than five years of experience and |
| resolved before, there is still a good chance that | | | | bill at about the same rate (if not more) that you |
| what happens next will not create the additional cost | | | | would expect to pay the attorney handling your case |
| or delay that you fear. | | | | at a small firm. |
| In that case, the next step will probably depend upon | | | | Compare that to the services you get from a small |
| the size of the other company. If the other company | | | | firm. Most small firm lawyers came from the large |
| has less than 500 employees, there is a good chance | | | | firms and/or the corporate world. There is a good |
| it does not have an in-house attorney. Those | | | | chance the small firm lawyer that is billing your |
| companies usually address these issues by having | | | | services at $175 per hour was having his services |
| some manager who thinks he knows the law and | | | | billed at $275 per hour before he left the big firm. |
| makes decisions about contract language all the time, | | | | They typically have many years of experience and bill |
| or by outside counsel to whom they send important | | | | at or below the rates you would pay for the work |
| contracts to review. If they have the internal | | | | of an associate at a large firm. If you retain a |
| manager that thinks he or she knows as much as a | | | | competent lawyer from a small firm, she knows her |
| lawyer, the decision will be made quickly anyway. | | | | own limitations. If a lawyer from a large firm is |
| Otherwise, they may be reluctant to incur the | | | | needed. The small firm lawyer will let you know and |
| expense of outside counsel to make such a purely | | | | with your approval, will not hesitate to bring them in |
| business decision and will make the decision | | | | to work on your case. The difference is that you |
| immediately. If the company has 500 or more | | | | decide when and if this will be worth the cost. And |
| employees, it probably does have an internal legal | | | | there is no incentive for the small firm lawyer to |
| department. In that case, they usually have the | | | | encourage you to incur the extra expense if it is not |
| resources in place to deal with minor change requests | | | | necessary. To save money and get more value, it |
| very quickly. | | | | makes sense to consider retaining a small firm |
| If your concern is not a purely business issue, such | | | | attorney. |
| as legal boundaries affecting liability or choice of law | | | | |