Don't Hesitate - Avoiding the costly mistake of waiting until it's too late

Don't Hesitate - Avoiding the costly mistake of waiting until it's too late

Potential clients often have a misconception about when to call their corporate attorney.  They think the best way to use an attorney is to wait until an issue has gotten out of hand, and then call and ask for immediate and emergency advice. Perhaps they wait until it’s clearly a “legal” issue, or they wait until it’s clearly going to be expensive if they don’t get some legal advice, or they wait until they’ve negotiated so far that they can’t get any further. 

The problem with this approach is that it’s akin to going to marriage counseling only after you’ve filed for divorce.  At that point, the marriage counselor is tasked with repairing a marriage beyond the fixing point. 

As a corporate lawyer, I get to look at a situation before there’s even the glimmer of a disagreement and find ways to make sure those disagreements don’t arise, and if they do, there’s a documented method for dealing with them.  If you’re a client who doesn’t find value in an attorney until you’re ready to file suit, you need a great litigator in your contact list, and you don’t need me. Most of my clients, however, see the expense, time commitment, and great potential for loss as reasons to get in front of legal issues. Avoiding a lawsuit is achievable for clients who make it a habit to keep us in the loop on their routine legal needs.

At Stock Legal, we manage our clients’ expectations from our first meeting and throughout our relationship.  We educate clients on the importance of their legal documents and encourage them to communicate in a way that allows them to make efficient use of our legal services. 

We’ve spoken to many clients whose interactions with their former attorneys have led them to believe that it’s better not to discuss anything with their attorney until it’s a “big deal.”  We understand, and that’s why we make it a point to be both transparent about legal fees and efficient with our time.  Not only that, but we can’t stand to see clients learn this the hard way.

 One such client took the “wait and see” approach a few years ago, and the result left them in a panic, feeling frustrated, and with very few options.  Their business had been located in the same building for a few years, but when they purchased the building they had forgotten to obtain a business license, and the issue hadn’t come up in the interim.  The city became aware of their lack of business license and sent a notice to the company requiring immediate completion of the application.

Instead of responding promptly, and without asking for legal advice, they continued to put off the city’s requests, and insisted that they surely had a license, but couldn’t find a copy.  This went on for several months, and the city continued to send notices.  In the meantime, the company started preparing for a sale, and found a buyer.

The situation came to a head about a month before the hopeful closing date.  The city finally imposed a hefty penalty, stretching back to the first date that the company had occupied the property, and demanded immediate filing of the business license application.  The potential buyer also refused to move forward on the transaction until the matter was resolved.

Even though we had been assisting the company with some of their contracting needs, and had been preparing them for the sale, the client had purposely kept us out of the loop on this issue because they feared that our advice would come with a high legal bill and they wanted to just sell and get out of the situation.  At this point, though, the client was left with no choice but to give a panicked call to ask that we step in and “fix it.” There was no easy fix once it had progressed so far.  We had to spend substantive legal time to prepare, review, and file the business license application, and the matter had dragged on for so long that we couldn’t convince the city to waive or decrease the penalty.  In order to get their transaction closed, the client had no choice but to pay the penalty immediately, resulting in less profit from the sale of their business.

 That’s hardly a satisfying result for a company or their attorney and could’ve been mitigated by a 5-minute call to ask for some legal advice when they had first received the notice. I understand clients are inclined to avoid legal fees by taking care of matters on their own, but our potential clients should know that we are experts in efficiency and can help them avoid costly and time-consuming legal issues by staying in touch and asking for advice. 

When your attorney is a trusted advisor, you won’t hesitate to call for advice. If you are looking for a trusted advisor to be part of your team, contact us.

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