8 Ways to Avoid Paying Expensive Legal Fees

by Jaburg Wilk
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"The first thing we do, let's kill all the lawyers." Shakespeare, Henry VI

Meeting new people at a cocktail party and telling them that I'm a lawyer frequently generates disdain. The experience that most people have had with lawyers is in connection with their divorce or a business litigation matter. In either case, it was rarely pleasant and usually very expensive. I explain that I don't sue people. In fact, a key part of my practice is helping my clients avoid litigation.

As a transactional commercial lawyer, I assist my clients start new businesses, strategize and structure their business deals, draft and negotiate contracts that reflect their business goals and comply with applicable laws and regulations.

Although litigation cannot always be avoided, the following steps may mitigate your chances of getting involved in litigation:

Initially and most importantly, evaluate the company or person with whom you will be dealing.  Check his or her background, reputation, credit and litigation history. The best way to deal with a "problem" person is to avoid dealing with him or her.

Second, have a clear understanding of the agreement between the two of you, including all material terms. A clear mutual understanding of the deal and managing both parties' expectations are critical. Once you have arrived at a deal, have all material terms clearly written in a contract that is signed by both parties. Do not sign a contract that includes terms you don't fully understand. To mitigate the possibility of future litigation or liability from that litigation should it arise, you should seriously consider consulting a lawyer to prepare or review your contract.  A lawyer is able to identify the material terms, have the contract clearly state what you agreed upon, provide contingencies for how to proceed should a dispute arise (for example, provide for mediation or arbitration, rather than litigation, to keep down costs and obtain a quicker resolution) and explain provisions that you don't understand.) Most disputes and litigation arise from misunderstandings, lack of communication and unreasonable expectations.

If a dispute arises, don't immediately get agitated. Think and act logically and reasonably.  Review the facts.  Don't take the dispute personally. Put yourself in the other party's shoes and try to understand his or her viewpoint. Review the contract to determine whether the facts or issues underlying the dispute are addressed in the contract.  You may find that it is you, not the other party, who is not complying with your original agreement.

Talk with the person with whom you're having the dispute (or the proper person at the company with whom you're having the dispute). The contract may specify with whom you should be talking.  Before taking that action, be aware of the political consequences of talking with the wrong person or going over someone's head.

Although it is common practice today to communicate by e-mail, there are pros and cons in doing so; sometimes a good result is best achieved by a face-to-face meeting.  In addition, a downside of communicating by e-mail (or otherwise in writing) is that, should you not be able to resolve the issue, in subsequent litigation, anything that is favorable to your position is "self-serving" and of no effect, but anything that is detrimental to your position will be used against you.  You may inadvertently concede a point that could be damaging to your position.

Prepare for the conversation or meeting by gathering pertinent facts and documentation, outlining the issues, your positions and potential solutions, and by anticipating the other person's substantive responses, so that you are reasonably prepared to respond to them.  If the other person may benefit in some way from your position, framing the facts or dispute in a manner that makes that clear may be persuasive. Your approach and communication style should be cordial, not antagonistic or contentious.  There is no merit in escalating an issue unless and until you need to do so. Taking the offense puts the other person on the defense. You are more likely to achieve a better result through an affable, cooperative approach. Clearly express your concern. Ask questions to understand the other person's position, allowing him or her to communicate his or her needs. Give him or her the opportunity to consider the issue and your position, which may include allowing him or her to respond to you at another time.

Hopefully the dispute can be resolved by a mutual understanding of the others' positions and needs and mutual agreement to a win-win solution. Although parties' starting positions may be in conflict, each party's actual needs frequently are not in conflict and an amicable win-win resolution can be achieved. Even if the parties' actual needs are in conflict, a reasonable resolution may be achievable through compromise.

If the dispute has not been resolved amicably, you must decide what your next step is.  The alternatives available will vary depending upon the facts and context.  However, it is important to determine and fully consider each of the available alternatives, as well as the practical, political and legal consequences of each alternative. (You might consult a lawyer at this time to advise you of your rights under the contract, help you determine and evaluate your alternatives and advise you of the legal consequences of each alternative.)

If you decide to pursue your position in the dispute, send the other party a formal written statement of your position, requesting one or more specific resolutions. Again, your approach and communication style should be cordial, not antagonistic or contentious. What you say in your letter is very important.  Not only is your letter your opportunity to persuade the other party of the merits of your position and request, but, as noted above, its contents may be used against you. Accordingly, you may want to have your lawyer send the letter.  On the one hand, a lawyer's letter reflects that you're serious; on the other hand, it escalates the dispute. Regardless of whether you or your lawyer send the letter, you should have him or her prepare or review it.

At this point you're back to Step 5 above: communication, negotiation and, hopefully, resolution. Unfortunately, disputes cannot always be resolved amicably or cordially and through persuasion and compromise.  If you cannot achieve resolution, you're back to Step 6 above: considering your alternatives and deciding how to proceed.  One of those alternatives may be to pursue litigation against the other party.  In that case, you'll need a lawyer who can vigorously represent your interests.

Hopefully you can achieve an acceptable resolution to your dispute by utilizing the above strategy, as your best option is not to win in litigation, but to avoid litigation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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