Business owners can often be apprehensive about engaging lawyers: they charge too much, they take too long, they don’t listen properly to what your priorities are, they don’t speak the language of your industry, they cause disputes to escalate rather than resolve, and signing a costs agreement can feel like writing a blank cheque. But this need not be the case.
If you know how to choose the right lawyer for you, and how to use them in the right way, they can actually save you a lot of money and help you move forward with confidence.
How to choose the right lawyer
A great start is to look for a lawyer who has experience in your industry or situation. For example, my father, Peter Kelso, spent 13 years in foster care as a State ward. He now has a significant practice representing former State wards. Why? Because he speaks their language, he understands the challenges they face, and because he relates to them they know that he will go the extra mile for them.
Many excellent lawyers have come to the law having previously trained or worked in other industries. There are lawyers with backgrounds in medicine, psychology, engineering, building, small business, media, and the list goes on.
Lawyers love to fight for a cause, so look for a lawyer who relates to your situation and chances are they will go above and beyond for you.
When you approach a lawyer about a problem they may not be able to give you a solution off the cuff. This is because legal issues usually involve too many variables – much like the ground conditions on a construction project, you can never know with certainty what you’re going to be up against until you start digging.
However, they should be able to give you an outline of how they will go about designing the strategy, executing it, and the usual milestones along the way. Lawyers who have a methodical, systematic, ‘project management’ approach to their work are far more likely to deliver on time and on budget.
Employing the most aggressive or ‘alpha male’ lawyer in town can often work against you. The significant majority of disputes are now resolved by various forms of negotiation or mediation. These methods require a lawyer with emotional intelligence who can change gears and use a range of tactics, from the adversarial to the relational to the courteous diplomatic deal-maker. Using only aggressive tactics will put the other side on the defensive and leave them in no frame of mind to rationally consider the weaknesses of their own case.
A good indicator in choosing a lawyer is how well they engage with you when discussing the work you need them to do. Is the conversation focused on understanding your situation, your priorities, and how to achieve your objectives? If it’s all about them, or you don’t feel listened to, that’s not a good start.
How to use your lawyer
Prevention is cheaper than cure
A significant cause of the cost of engaging lawyers is that people often engage them only after things have gone pear-shaped. When you consider the losses you’ll have to wear, the disruption to your business, and the legal costs involved in litigation, there is significant money to be saved by engaging a lawyer early to help you weed out the risks and resolve disputes before they escalate. Engaging a lawyer in this way will make their fees affordable, and all the more so because you’ll be able to spend more time focused on running your business.
Mitigating the risk of disputes
The terms of the contracts you enter are a major source of disputes. If they are vague, incomplete, too ridged, impractically allocate the risks to parties who can’t control or contain them, rely on shaky assumptions, or are open to a variety of interpretations then this is fertile ground for disputes to arise.
If the contact has not yet been signed, your lawyer can negotiate amendments to mitigate these risks. If the contract has already been entered into, your lawyer can assist you to clarify the operation of the contract with the other party, and may be able to negotiate variations to head off potential issues. Your lawyer can also advise you on the systems, procedures and record-keeping needed to ensure that you are in a strong position should a dispute arise. (Being organised and following the contract procedures will also make a big difference to how much work your lawyer has to do to).
Resolving disputes before they escalate
Getting legal advice early can help see a dispute resolved in just a few emails. Your lawyer can assist you in responding to the other party in a way that leaves them uncertain about the strength of their position and far more willing to resolve the matter in a mutually suitable manner. While the standard threatening letter can cause things to escalate quickly, a skillful and persuasive response can help resolve the dispute and maintain the business relationship.
I recently had a matter where one well-worded email was able to achieve a written apology, the payment of several thousand dollars in previously disputed invoices, and an invitation to discuss further business. Disputes need not escalate to ‘lawyers at twelve paces’.
Appeals are expensive
The recent case of Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2)  NSWCA 379 shows just how expensive things can get when disputes escalate. In that case, Shade Systems served a progress payment claim on Probuild for construction work. Probuild served a payment schedule on Shade Systems stating that no amount was payable because the liquidated damages cancelled out the value of the work claimed. The dispute when went to an adjudicator who misinterpreted the contract and awarded about $277,000 to Shade Systems. The matter then went to the Supreme Court who quashed the adjudicator’s decision, and then to the Court of Appeal who set aside the previous order.
Now, imagine the expense that could have been saved had the parties used lawyers who could communicate and resolve the disagreement over the interpretation of the liquidated damages clause without resorting to the adjudicator; or failing that, had Probuild provided persuasive submissions to the adjudicator to guide his/her interpretation of the contract. Sometimes (and perhaps in that case), the other side is determined to litigate, or a decision-maker will inexplicably decide against you anyway. However, on average, a lawyer who can anticipate the sticking points and resolve them with clear communication will save you a lot money.
When to contact your lawyer
Running a problem by your lawyer need not be big deal or a formal occasion. The sooner your lawyer is told about an issue the better the chance they can resolve it. If you’ve picked the right lawyer, you should feel free to email or pick up the phone for a casual conversation about the issue. A good approach can be to email an outline of the issue, and schedule a follow up phone call. This will give your lawyer a chance to think about the problem first, and the conversation should be more productive.