"Building Good Attorney/Client Relationships" by Andrew N. Karlen, Esq.

Originally published in Westchester Commerce, December 2007

I hesitate to say that any humiliation that befalls me on a golf course is the “ultimate,” because the golf gods seem to take that statement as a challenge, which leads to an even more embarrassing humiliation. The really frustrating thing is that the very things I think will fix the problem seem to make things worse. Alas, the fixes almost always seem to lie in counterintuitive behavior, e.g., hit down on the ball to make it go up!

Business owners are frequently baffled when their legal fees exceed expectations despite the fact that they believe they have behaved in a way that logically would have reduced the amount of the fees. The problem is not unlike that presented by the application of logic to the golf swing – the very steps business owners think will minimize the fees have the opposite affect. Here are 10 examples.

1. Rejecting information or advice because clients think they are the exception to the rule.

Attorneys advise clients based on their knowledge and experience. Frequently, when the advice is not what they hoped for, clients acknowledge the general soundness of the advice but explain that it doesn’t apply to them because they are unique. Unique as clients’ situation may be, it is unlikely that they are the drastic exception to the rule. The line between healthy skepticism and resistance can be very fine. Being on the wrong side of that line can be expensive.

2. Engaging in “ready, fire, aim” practices.

It is much harder to get ready, take aim and then fire than it is to simply shoot in a general direction. The reward for preparing and aiming is that it vastly increases the likelihood of knowing what the target is and hitting it. Don’t in the name of cost-saving or decisiveness decline to talk with your attorney before you pull the trigger. The cost of a timely consultation would have been a bargain compared with the costs of correcting an imprudent decision or even worse living with its consequences.

This is an appropriate point to acknowledge that the behaviors described in this article do not always reflect a client’s desire to reduce legal fees. The pressures of operating a business can make it difficult to focus on legal issues or understand the resource that the company’s attorney can be.

3. Not involving attorneys until the client needs legal documents.

This is a variation on the ready-fire-aim approach. Your attorney shouldn’t make your business decisions for you, but should be able to advise you on alternatives. If you don’t obtain the legal perspective you run the risk that when the deal is presented to your attorney, he or she will point out flaws or a more advantageous deal structure. When this occurs, the legal fees may pale in comparison to the cost of a resulting loss of credibility with the other side.

4. Being selective in what clients tell an attorney.

Sometimes a client filters the information given to the attorney because the client believes that disseminating information on a need-to-know basis will save legal fees. Many a client has paid dearly when it later turns out that the information that wasn’t shared was, in fact, critical.

5. Not discussing sensitive issues with an attorney.

Clients sometimes withhold information they feel is embarrassing or unfavorable to the client’s position. This can be a huge mistake. Making the attorney aware of the information affords the client and the attorney the opportunity to determine whether it should be disclosed and if so, how and when the disclosure should be made. When, however, the information comes-out later at a crucial time and as a surprise to the attorney, trust between the parties and between the attorney and client is damaged. Moreover, information that was actually not as sensitive as the client thought can become a bombshell, or the significance of information that is potentially embarrassing or unfavorable can be magnified to crisis proportions. While the reluctance to talk to an attorney about sensitive or negative information is understandable, it is un-necessary. The “attorney-client privilege” prohibits attorneys from disclosing information received from a client without the client’s permission.

6. Not understanding the need to protect their intellectual property.

Intellectual property (trademarks, copyrights and patents) is often among a business’ most valuable assets. Large sums of money are invested to develop and promote names and logos, which become integral parts of the business’ identity. But, business owners often commence using a name or logo without first consulting an intellectual property lawyer regarding the appropriate searches and trademark applications that could protect that identity. This leaves them potentially vulnerable to a subsequent claim that the use of the name or logo infringes on another party’s trademark rights. The arrival of a “cease and desist” letter from counsel for a large corporation with abundant legal resources is, indeed, a sobering event.

7. Assuming rather than asking.

It is not unusual for some of the most common assumptions to expose business owners to substantial risk. For example, many a business owner has assumed being permitted to incorporate under a particular name guarantees them the right to use that name in commerce. This is not, however, the case. Imagine the shock of receiving a “cease and desist” letter after years of blissfully assuming that the company’s name was secure.

8. Believing that legal documents are simply necessary evils that have nothing to do with what really happens to a business.

The reality is that legal documents have everything to do with what really happens in the course of business. Business owners need documents that reflect the transactions they enter into. It is often said that the best contracts are the ones that are signed but never again looked-at. When, however, a dispute makes it necessary to go back to the document, the legal fees saved by obtaining an inadequate document will not console a business owner who has been wronged.

9. Believing legal fees are an expense for which clients get little value.

Clients get value if they ask attorneys good questions, provide them with the information they need and recognize that fire prevention is easier than fire-fighting and that it is easier and cheaper to put out a small fire than wait until it becomes a major conflagration. Working collaboratively with your attorney can provide value that far exceeds the dollar amount of the fees paid.

10. Not discussing legal fees with an attorney or reviewing bills as they are received.

Legal fees should be discussed up front. Generally, a written retainer agreement is required for matters in which the fee is expected to exceed $3,000. Express your concerns at the outset of your relationship with your attorney and as the matter progresses. Review your bills when you receive them and promptly communicate with your lawyer regarding any questions or concerns you may have.

As the newspaper man said in the last line of the movie The Man Who Shot Liberty Valance, "[w]hen the myth becomes the reality, you continue to print the myth." “Lawyer’s jokes” seem to have become attractive myths to print. The reality is, however, that it is in an attorney's best interests to provide counsel that gives clients value beyond the documents prepared, and to charge a fair fee for doing so. It is also in clients’ best interest to take full advantage of their attorneys’ expertise and to be willing to pay those fair fees.

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It is in an attorney's best interests to provide counsel that gives clients value beyond the documents prepared, and to charge a fair fee for doing so. It is also in clients’ best interest to take full advantage of their attorneys’ expertise and to be willing to pay those fair fees.