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Do I Really Need A Lawyer?

November 16, 2012

A Q&A with Matt Bergman

 

Do I really need a lawyer for what I want to do?

Odds are, yes. If nothing else, it makes good sense to consult with an attorney about what it is you are interested in pursuing. And why wouldn’t you? The consultation should be free of charge. In fact, just to be on the safe side, you might want to make sure that’s the case before scheduling the initial consultation. If a lawyer wants to charge you before knowing whether he can even be of service to you, that should concern you. However, some attorneys can justify charging for an initial consultation, depending on the specialty of the attorney and/or his or her practice area. For example, an immigration lawyer being consulted about obtaining a work visa may rightfully charge for an initial consultation because the immigration lawyer knows that he will be able to provide the advice and guidance necessary to obtain a work visa, regardless of the client’s situation.

How do I find the best attorney for what I want to do?

Nowadays, there are so many resources available to the consumer in need of legal services. First, ask around. Ask friends, relatives or colleagues (whose judgment you trust) if they know of a good lawyer. You do the same thing with doctors, don’t you? You might also want to check out www.martindale.com That website provides a directory of attorneys and even goes so far as to rate them based on their experience and interaction with other attorneys in their industry. Martindale regularly polls attorneys to rate others with whom they’ve interacted with. Also, you can always try to do a Google search based on location – if, in fact, convenience is a factor in your decision to find the right attorney.

Which is best: Young Attorney vs. Old Attorney?

Unlike medicine, where doctors coming out of med school may be learning the latest and greatest techniques using recent breakthroughs in medicine and technology, the law is a bit more old school. It doesn’t change radically very often. And there are rarely new ground breaking techniques or legal strategies that would make younger attorneys the better choice, but not all younger attorneys should be avoided. An attorney who has experience with handling a specific type of matter is much better than one who does not have any experience in that area. Would you go to a foot doctor to treat a sinus infection? Of course not. So, why would you want to go to an attorney who may have dabbled in a specific field, such as handling a home purchase, if you were then interested in buying an office building. The fact is that there are so many differences between the two matters, but a lawyer who advertises that he “handles real estate transactions” may fool you into believing that his experience in one area (i.e., residential home purchases) is sufficient for him to handle a matter in another area (i.e., commercial real estate). Most likely, the ordinary consumer of legal services will not know how vastly different 2 types of transactions (such as the residential vs. commercial example I’ve used above) may be. So, when you inquire about an attorney’s experience, be very specific. Following my example, ask the attorney whether he or she has handled the purchase of an office building before and, if so, how many has he or she handled and how long ago did he or she last do so. You don’t need to know every facet of the law to weed out the good attorneys from the bad ones, but you do need to use a little common sense. Odds are that older attorneys have had at least some experience handling exactly what you need done. He or she may come at a higher hourly rate, but would you rather pay the higher rate of an attorney who knows what to do than a lower rate of an attorney who may spend hours trying to figure out what to do? Don’t get me wrong. There is a time and a place when a young attorney may be useful. Ideally, a young lawyer who works hand in hand with a more experienced lawyer is what you may need. Why is that? The reason is quite simple. Even some of the most complicated transactions will involve work best suited for a lesser experienced attorney, and you wouldn’t want the experienced attorney who comes with a high billable rate to be spending time on that type of work – that’s where the younger, less experienced lawyer comes in handy.

How much should a lawyer cost?

There are many factors that will affect the cost of a legal matter. Let’s start with geography and the cost of living. Suppose that you need to have a will drafted. Who do you think will charge you more? The lawyer who works in downtown DC or the one who works in the suburbs? Which one do you think has higher expenses (such as rent, payroll, parking, overhead, etc.) to run his or her practice? Clearly, the one who works in the suburbs can charge you less because his own costs of operating a law practice are less than the costs of operating a law practice in downtown DC. The trade off though – is that the downtown DC lawyer may be a bit more experienced in handling more sophisticated matters than a suburban lawyer. The solution? Find a suburban lawyer who once practiced in downtown DC, but later decided to make the move to suburbia. I spent the first 20 years of my legal practice at a 400 person, mega-DC law firm (Dickstein Shapiro) before deciding to make the move to suburban Maryland. And there are so many other attorneys at Shulman Rogers who started their careers at bigger, downtown DC law firms, like Shaw Pittman, Morgan Lewis, Sidley Austin and Skadden – just to name a few – before moving to the suburbs. The type of legal matter will certainly determine whether the cost of the lawyer would be high or low. Using the previous example – clearly, needing a lawyer to help you buy a house won’t cost you nearly as much as a lawyer to help you purchase an office building. And the same would hold true with a will. A simple will won’t cost much when compared to an estate needing trusts and tax shelters set up to minimize adverse tax consequences during the inheritance. And, if you need a lawyer to handle a deal or resolve a dispute between you and another person, that person’s attorney can have an indirect impact on your own cost of a lawyer. Think about it. Let’s suppose that you are trying to raise money to start a new business and one of your investors hires a lawyer to review the paperwork. If the investor’s lawyer is very practical, he or she may only feel justified in negotiating parts of the contracts containing some of the most significant concerns that his or her client may have. If, on the other hand, the investor’s lawyer doesn’t have many other clients keeping him or her busy, odds are that the investor’s lawyer will spend more time than is reasonable and practical to protect his or her client’s most significant concerns. I will never forget the time when I had to deal with opposing counsel who wanted to negotiate every word, every line and every paragraph in the contract – arguing over the most ridiculous things and seeking to address the most unlikely of events. That would be perfectly fine if his or her client was paying an agreed-upon price for the legal work, but more likely than not the investor’s lawyer was charging by the hour. The more time he or she spends on the paperwork, the more time your own attorney will need to do so as well. That’s why I rarely agree to represent a client on a matter if I know opposing counsel has a bad reputation for being impractical. Get the drift? Many law firms not only charge for their lawyer’s time spent working on a matter, but also charge for certain overhead costs – like secretarial overtime, food (if the lawyer needs to work through lunch or dinner), travel expenses, photocopying, file storage, faxing and the like. While it is not unusual for a law firm to pass along some of these costs to you the consumer, just make sure that the firm is not marking up and making a profit on what should really be just reimbursements for out of pocket expenses.

Good lawyer vs. bad lawyer. How can I tell the difference?

Unless the attorney you have selected is one who came highly recommended from a trusted friend, relative or colleague, you may not be able to tell the difference between a good attorney vs. a bad attorney until it is too late. As a lawyer myself, I have dealt with hundreds of lawyers over the years. Usually, I can get a good sense of a lawyer’s aptitude, ethics and experience within the first few minutes of speaking with him or her. The odds of a lay person being in a position to make a similar determination are slim. Don’t get me wrong. You might be a very good judge of character, but there are certain telltale signs in the legal profession that speak volumes about an attorney. Here are just a few to keep in mind: Is it easy to schedule an initial consultation with him or her? Odds are that the good attorney is booked solid a few days out. Within the first few minutes of the initial conversation or consultation, does he or she ask you what you want in the way of results from his involvement? A good attorney should, at a minimum, want to know the client’s goals and expectations before undertaking the representation. Has the attorney mentioned an approximate cost or a range of cost for the work he or she is being asked to do? This goes hand in hand with the prior inquiry on knowing a client’s expectations. If an attorney knows that a client is expecting to get a $50,000 recovery for his contract dispute, he or she should also know up front what the client is willing to pay the attorney to obtain that result. My suggestion: Think about a friend, relative or colleague who you has had some success in business generally and get a few recommendations from him or her. Even if the recommended attorney may not be the right fit for you, odds are that he or she will know of another attorney who would be!!! Over the years, I have developed a significant rolodex (alright – admittedly I’m showing my age – I guess I should say “Contact List”) of trusted friends, colleagues and advisors in a variety of industries and professions. I frequently get calls from them inquiring about referrals – along the lines of… “My brother wants to adopt a child.” Or “My sister has a nanny who is an immigrant who needs to apply for a work authorization?” Do you know of an attorney who can help? Are those matters that I can handle? No way. I will be the first to tell you that I am not qualified to handle such matters. However, I may work with colleagues or know reputable attorneys who are not only capable and qualified to handle the matter, but also well-respected leaders in the industry on that particular matter. So, if you happen to get introduced to a lawyer or an attorney whom you know and trust – even if he or she doesn’t do the type of legal work that you may need handled – don’t let him or her go. Use him or her as a resource and referral source to help you find the trustworthy lawyer who is well-versed in the legal work you need him or her to handle.

Finding The Right Lawyer – Generalist vs. Specialist?

Would you go see a brain surgeon simply because you had a headache? Probably not. If the headache lasted for a few days, you might be a bit concerned and go see a regular doctor, but you would not go running to a specialist like a brain surgeon. What if you decided that you were ready to get laser eye surgery? Would you be comfortable having the eye doctor from Hour Eyes or Pearl Vision Centers perform the surgery? Again, probably not. The same holds true with legal work. There are many things that a lawyer need not have much experience to handle properly. Likewise, there are legal matters that an inexperienced attorney should not get near – even with a 10 foot pole!!! Take, for example, buying a house. Most lawyers have taken a class on “contract law” in law school. And buying a house is nothing more than negotiating and closing on a contract to purchase a home. Sure, there are real estate title and finance aspects to the home purchase that an experienced lawyer can usually handle blind-folded, but representing a client who is buying a home, with a little research, is not very challenging for a lawyer. So, odds are that the solo practitioner who considers himself a small town lawyer can get the job done for you. If, on the other hand, you are interested in purchasing new market tax credits, historical tax credits or transferrable development rights (or TDRs), it would be downright foolish to hire the solo practitioner to get the job done for you. Why? Well, quite simply, new market tax credits, historical tax credits and TDRs are very specialized areas of the law. Some attorneys may initially learn the ropes from a mentor, but it would still take him or her years of handling such transactions in order to become well-versed in the specialized area. Can a solo practitioner work on a new market tax credit deal? Of course. However, do you really want to pay him or her by the hour to do enough research and review enough case studies to get the job done with minimal fallout? I wouldn’t think so. That’s the benefit of a specialist or someone who has developed a niche. From an ethical perspective, attorneys can’t market themselves as specialists or experts, but that doesn’t mean you can’t find one who has developed a niche in your needed area of the law. I have had some people refer to me as a specialist when it comes to government contract finance. It is true that I have, for more than two (2) decades, handled billions of dollars of loans, credit facilities and other structured finance transactions for banks, government contractors and others who do business with the government – probably beating out more than 95% of the attorneys in the Washington, D.C. area – being the hub of government contracting – but that lends itself to mean that I have just developed a niche in government contract finance. I can’t hold myself out as a specialist. When I wrote about my transaction experience with respect to the Assignment of Claims Act, that seemed to have attracted a lot of attention in the government contracting sector. Even though the article is several years old (and written by me when I was at my old firm), it still is factually accurate to this day and seems to have become popular reading among others in the industry. Here is the link to that article.

So, how much should it cost me to close a government contract finance transaction?

As you might imagine, I get asked this question quite often. A properly documented credit facility of $2 million or less (which oftentimes can be documented using bank form documents) may run only a few thousand dollars. Quite a bit depends on the complexity of your own company’s situation and the financing needs that it may have. I have documented credit facilities in which there is just one lender and one borrower – which is usually the simplest structure, but also potentially more risky from a credit perspective because the company’s business (i.e., all of its eggs) are in one basket. And I have handled numerous transactions involving one lender and multiple borrowers (usually a main holding company and its operating subsidiaries or its affiliates), as well as multiple lender / multiple borrower credit facilities – where we would frequently serve as counsel for the lead bank or lender in the transaction. Throw into the equation that the credit facility may not be a simple revolving asset based loan, but may also include a term facility and a sub-limit for letters of credit – and then you could easily see legal fees for the loan closing to run anywhere from $35,000 to $75,000. Add an opposing counsel who feels the need to prove his or her worth and you will find the legal bill gets even higher.

How much should it cost to close a real estate transaction?

With almost one-third of the 90+ Shulman Rogers’ lawyers practicing some facet of real estate law, it is not hard to imagine that this question gets asked most often. Before the right answer is given, I do need to distinguish between a commercial real estate transaction and a residential / consumer real estate transaction. Most residential / consumer real estate transactions involve buying or selling a home, or refinancing a mortgage. Putting aside the out-of-pocket costs and expenses, most home purchases, sales and mortgage refinances can be accomplished for less than $2,500 in attorney’s fees. Not only do the costs rise exponentially for a commercial real estate transaction, but so do the legal fees. Commercial real estate transactions can be relatively straightforward or they may be structured in a sophisticated manner that may serve to minimize taxes, reduce exposure for liabilities or effectuate a succession plan, among other things. Clearly, the time and effort required of an attorney for commercial transactions is substantially more than what may be required of an attorney for a residential transaction. On average, a commercial real estate transaction can be closed for as little as $7,500 in legal fees. The average legal fee for a commercial real estate closing is in the range of $17,500 to $35,000. Again, there are many factors that can impact whether a commercial real estate transaction would end up on the low end of that range or the high end – be it difficult opposing counsel, convoluted structure, adverse property conditions or complicated title issues, just to name a few.

How do I know if I have found the right lawyer for me?

First and foremost, ask him or her how much experience he or she has in the particular field of interest. Fair warning, many lawyers will be so quick to say that they “have handled plenty of these transactions for clients”. Don’t be satisfied with that answer. Ask for references. Second, make sure that your lawyer is not doing all of the talking. A really good lawyer listens intently to his or her client. Why? Because a lawyer who does not really know what his or her client wants or needs is a lawyer who will not serve you well. The lawyer may be really good at what he / she does, but maybe you don’t need the Rolls Royce of service when a Chevrolet can get you to the same place in the same amount of time. A really good lawyer will know which car to pull out of the garage for his or her client – usually after the first client consultation – but again, if the lawyer is doing all of the talking during the initial consultation, find yourself another lawyer. Third, be very wary of the lawyer who promises big returns for you or who represents that he or she will easily get you a great result. That is not something a lawyer can or should do.

What do I do if I have a complaint about a lawyer?

If you feel like a lawyer has taken advantage of you, did something ethically wrong or questionable, engaged in conduct that leads you to question the lawyer’s integrity, or seemed otherwise unfit for practicing law, you can do something about it!!! Depending on the severity of the conduct or behavior, it might be enough to call up the managing partner of the firm where the lawyer is employed. Managing partners hate getting calls about an engagement or representation gone bad. At best, it may end up costing the firm some money to rectify the situation. At worst, it can expose the firm to significant liability or a malpractice action. If the managing partner happens to be the wrongdoer, or if the wrongdoer is a solo practitioner, then your best bet is to file a grievance or complaint with the state bar association. Find out what state the lawyer is licensed in, and then contact the bar association of that state. State bar associations actually set aside funds to compensate victims of improper lawyer conduct. You may be entitled to some of those funds!

Should I expect my lawyer to be responsive?

Absolutely! In this day and age, with cell phones, laptops and PDAs, you should be able to reach your lawyer 24/7. Whether you should do so is a different story altogether. At some point during the last 25 years, practicing law changed from being a profession to providing a service. Service providers (particularly in the DC metro area) are a dime a dozen. If a lawyer does not provide great customer service, the client should rightfully find a new lawyer – one who appreciates that the client does, in fact, have a choice and, therefore, can demand the best customer service money can buy. I make it a point to get back to every client or prospective client within a few hours of receiving their voicemail or email – even if my message back to him or her is “Hi there. I received your message. Can it wait until [the morning]? Or is it something urgent that requires my immediate attention?” In some locales, where competition is not as stiff among lawyers, you might find it more difficult to get a hold of a lawyer at a moment’s notice and demand his or her immediate attention. However, in most jurisdictions, that is not the case. The responsiveness of an attorney may also be reflected in his or her diligence in getting the legal work done for you in a timely manner. See the next inquiry and response.

How long should it take my lawyer to complete the work?

This is a loaded question and ranks right up there with “how much should a lawyer cost?” More often than not, a lawyer has some reasonable ability to control the amount of time it takes to handle a legal matter from start to finish. The type of matter has lots to do with how long a matter may take. If you hire a lawyer to resolve or litigate a dispute, whether the court system ends up being involved will certainly have bearing on the time it takes to complete. Some court systems have “rocket dockets” – very fastpaced scheduling systems that may move a case along from start to finish in just a few months. Other court systems are terribly backed up and if you factor in an appeal of a decision, you could be looking at years for a matter to be completed. If you hire a lawyer to handle a home purchase or loan closing, odds are that the matter will take anywhere from 30 to 90 days to complete. Some types of transactions have regulatory requirements and timetables that might further delay the completion of a matter. For example, if two competing businesses have agreed to merge companies (or one competitor has agreed to buy out another) and they also meet or exceed certain thresholds, then the Hart Scott Rodino Antitrust Improvements Act requires that the merger be stalled for a certain period of time (typically 30 days) to allow certain agencies of the federal government sufficient time to determine whether the merger would violate antitrust laws. With respect to getting a matter completed quickly, the anomaly that a client faces on a regular basis is as follows: the client is typically not the only current client of an attorney, and typically the really good attorneys have so much business to handle at any given point in time that it makes it highly unlikely for a really good lawyer to have enough time available to complete your matter quickly. However, it may be that the good lawyer is incredibly effective at time management or happened to have a lull in his or her workload. If you find a lawyer who has completed a matter for you quicker than you even imagined it would take, consider the possibility that the lawyer may have cut corners to get the matter completed sooner than he or she should have.

What is a conflict of interest and why should I be concerned about it?

A conflict of interest should not be taken lightly. What is it? It is a situation in which the lawyer you hire or want to hire can’t or shouldn’t represent you for one reason or another (that I will explain shortly), but oftentimes as a result of having multiple interests where one primary interest can be affected by a secondary interest. Sometimes, conflicts of interest can be waived without issue. Before you proceed to waive a potential conflict of interest, you should ask your lawyer whether he or she feels confident that he or she can represent you and/or continue to do so to the best of his or her ability without reservation or qualification. A conflict of interest is difficult to define in the abstract. It is much easier to understand using examples. Let’s suppose that a married couple decides to get a divorce. The husband hires John Smith – Attorney at Law. The wife calls up John Smith – Attorney at Law – and asks him to represent her in the divorce. Can John Smith – Attorney at Law – represent both the husband and the wife in the divorce proceeding? No. There is no way for John Smith – Attorney at Law – to zealously represent the husband and the wife at the same time. Their respective interests are adverse to one another. In some cases, a conflict of interest can be waived. Most often, a conflict of interest can be waived if the matters representing the parties are unrelated to one another. Using the divorce example, let’s suppose John Smith – Attorney at Law – represents the husband in the divorce case. The wife engaged her own lawyer to represent her. A year later, the wife decides to call up John Smith – Attorney at Law – and wants to hire him to assist her with the purchase of a home. Can he do so? Probably. Although he had previously represented her husband in the divorce proceeding, John Smith – Attorney at Law – should be able to represent the husband’s ex-wife at a later date in connection with the purchase of her home because the original divorce proceeding and subsequent home purchase are unrelated matters. And, in all likelihood, the information that John Smith – Attorney at Law – may have learned about the wife during the divorce proceeding will likely not impede or adversely affect his ability to zealously represent the wife. However, many conflict of interest situations are not as clear cut as the example I used – so be vigilant and give serious consideration to any request to waive a potential conflict of interest. Lawyers will probably cringe with this tidbit of advice to clients and potential clients: There are so many lawyers in the world – so if there is the slightest chance that a conflict of interest might exist and it might potentially have an adverse effect on you being properly represented, go find yourself another attorney.