If they only had a Primary Care Lawyer before they …
Our last blog post discussed the value of having a Primary Care Lawyer (a “PCL”). It makes sense having a lawyer you trust who knows you, your business, your hopes and aspirations, work and family situation, and who can help you navigate through the often tricky waters of workplace, community and family life. It gives small businesses and mission-based organizations some peace of mind.
One of the best ways to catch people’s imagination and attract their attention is to tell stories. In his book Talk Like TED, author Carmine Gallo urges the use of personal stories, stories about other people and stories about brand success. Stories capture both your emotional attention and your rational focus.
One memory from my visits to Ireland was their wonderful storytellers. In Ireland, storytelling is a profession; no joke. More than one Irishman came up to me while I was there and gave me business cards; under their names was the profession “Storyteller”. At a legal conference I attended in Cork in 2008, two amazing storytellers were part of the formal program.
I’d like to tell you some stories over the next few blogs about situations where people either did or didn’t have their PCL. (Please start saying PCL over and over to yourself, as in the sentence “I really need to have a PCL.”) Disclaimer: These stories are based on real cases and real situations; names and situations are changed to preserve the confidentiality of the parties involved.
A home improvement contractor uses a “standard” contract provided by a related service organization, without reviewing the contract’s terms first with his PCL. Sometimes, people opt to use “boilerplate” contracts, thinking this way: Why pay a lawyer hourly legal fees to draft a contract when you can get that contract template online now or from other source, and just plug in the names, dates and other changing information?
This contract contains an arbitration clause that requires that disputes go to arbitration using a certain organization and its administrative process and fees. The arbitration company assigns the arbitrator and the parties are required to follow the commercial rules of the company and pay their fees.
A dispute arises between contractor and homeowner. Homeowner hires a litigation firm. The litigator does what litigators do – takes four depositions and initiates discovery, even though this is a “fast track” arbitration. They raise a claim that if successful could get them “treble damages and attorneys’ fees”, which probably fuels the client to pursue this course of action. As a likely result, homeowner rejects a really reasonable settlement offer (more than enough to make him whole) which is made before depositions and arbitration hearings get started. The contractor starts thinking his side should be taking depositions too so they take a couple of depositions. There’s some discovery demand made. Both sides retain an expert. The so-called “fast track” arbitration requires four full days of hearings and because of schedules and cancellations due to many snowstorms over that winter, it stretches out over four months. Everyone who was deposed is also called to testify as a witness at the arbitration hearing.
The Arbitrator’s decision favors homeowner (sort of) and awards money damages, but they are considerably less than homeowner’s lawyers’ (two!) legal fees, which are not awarded. Pyrrhic victory for homeowner. The award is also far less than the settlement offer that was made before the proceedings started. Empty victory. Contractor gets a decision directing him to pay a fairly small amount to homeowner. Pyrrhic victory. But the company owner and his project manager were pulled out of work for most of the depositions and all of the four hearing dates and its legal fees far exceed the amount of the award. Hollow victory.
If both sides had PCLs advising them early on, odds are they would have arrived at a settlement for about the same amount of money (less than $10,000). Homeowner’s PCL would have suggested that homeowner use a neutral case evaluator to get an accurate read on the case’s strengths and weaknesses and the real value of the damages and then try to negotiate what he needed to have the house repaired to his satisfaction. Contractor’s PCL would have been drafting contracts that would not have allowed for several options for dispute resolutions, not just arbitration through an agency. He also may have suggested a neutral case evaluator and perhaps a short mediation, if needed to help the parties “Get to Yes”.
Repairs would have been made six months sooner. The time out of work for the contractor and his crew would have a half of day or prep and a half a day of mediation instead of seven full days of depositions, preparation for hearing and hearings. Homeowner may have left happy enough to refer contractor to others, maybe with a $100 referral bonus coming back to homeowner for every referral.
Abraham Lincoln said: “Discourage litigation…the nominal winner is the real loser – in fees, expenses and waste of time.” In this case above, both sides lost money, time and relationships, that could have been saved had they had PCLs.