Every business in the world is thought of as a faceless bunch of suits that want to take advantage and have a pack of attorneys just waiting to step in and start litigating at the first sign of trouble. The truth is that the opposite true. Nobody, particularly a business, wants things to go to the extreme of litigation and legal actions. It is expensive and time consuming and distracts from the daily routine of running a business and providing great value to its customers. If there is actually a fault in the business world it is the reluctance to use legal counsel when it really should.
When is Legal Counsel a Must?
Determining when it is time to bring in legal help is one of the most important challenges a manager can make. There are some absolute facts about involving attorneys. As soon as attorneys become involved things will become painfully slow and there will be many sets of eyes examining everything that is said and done from that point forward. Most often, once counsel has become involved you are at the point of trying to find the most cost effective way to sever a business relationship and you have lost any future potential with the client.
Anytime you are certain a client is lost and you are attempting to mitigate and financial losses associated with that it is probably time to consult counsel. While it is not as important if it is simply the end of a contract and they are choosing not to renew, as soon as there is discussion of uncompleted work or things still owed to fulfill the previous contract, it is probably time for at least a quick review by counsel to make the determination if they would have grounds for legal action if you did not meet any demands.
Anytime a client wants out of a contract early there should be discussions with your attorney to determine the cost benefit of enforcing the contract over future legal costs to enforce it. It needs to be a simple dollars and cents comparison of costs rather than the personal nature managers often put into it claiming it is in the contract and you will not simply let them walk away. While as individuals we get caught up in fairness and what is “right” if the contract is not producing substantial income and it is certain it is going to become less profitable as time goes on under legal pressure plus the additional cost of legal review, the attorneys are usually more competent at looking at it from an non-personal view point and simply deciding what way makes the best financial sense.
Anytime the questions are of a purely legal nature the attorney should be consulted (even if you think you know what the law says. In general, as soon as managers start saying “legally they have to…..” it is time to actually run that by the actual attorney. This is particularly true in basic business functions that are in fact determined by statute instead of by contract such as collection actions and insolvent clients that cannot pay. When dealing with other small to midsize businesses the death of the business owner often makes collection actions difficult, If there are outstanding contracts and monies owed the only way to collect is going to be legal actions with probate court. It is useless for your business office or collections to go through regular means to try to enforce contracts and collections in these cases.