To Serve and Protect

Staniland agrees. She says businesses often enter into transactions without realizing the many side effects that their actions may have in the future. It’s not uncommon, for example, for clients to consider signing a deal that could change the way they’re taxed or, much worse and less frequently, could cause their company to become delisted from the stock exchange. “So how they decide to structure a deal – it’s generally really important that they get that advice,” she says.

A piece of advice for businesspeople who do find themselves in a dispute is to try and work things out before going to court. If that doesn’t work, then settle whenever possible. It’s cheaper, faster, and easier. Floren says he learned this while watching another shop owner work through some legal problems with a contractor. The contractor agreed to do some renovations for $25,000, but then delivered a bill for $80,000. His client refused to pay more than the original quote, but had nothing in writing saying what that was.

“So the contractor goes and throws a lien on the property, which they can do, it’s called a mechanics lien,” says Floren. “With the lien on his property, the shop owner could never sell the store or do anything with it until paying the contractor.” In the end, Floren says the shop owner took the contractor to court and ended up paying as much in legal fees as he would have if he had just paid the $80,000 to start with. “What I learned out of that story is: try to settle, don’t go to court and try to get everything in writing,” he says.

Finally, it is important that businesspeople know how to be good clients. Lawyers can do wonders to keep a company profitable and out of trouble, but they need direction and input. The easier you can make your lawyer’s job, the faster he or she can work and the lower you legal fees will be. Melvin, of Livingstone and Company, says it’s always a great help when his clients make their documents readily available and provide him with contact information for all the parties involved. He also says it can create a lot of delays if the client is out of reach or slow to return his phone calls and emails.

The single-most important thing a client can do, he says, is to never sign any contracts or enter into any transactions without asking a lawyer first. This will help to stave off future problems and keep legal fees low. Otherwise, once a client has signed a bad agreement or performed another ill-thought-out piece of business, it’s just damage control.