A few quick
pointers on how to use Google (or Bing or Yahoo, Firefox, etc) for legal
information.
Do’s:
1. Do: Use
Google for a quick definition of terms. Be aware it is best to have a law
degree and several years experience to fully understand the ramifications of
the definition.
2. Do: use Google for general information about a
subject –so that you can know what
questions to ask – to become a better consumer of legal work and lawyer
services
3. Do: In a
stretch you can even use Google to see what types of contracts or documents are
used in a given situation, what they look like and the topics they might cover.
You might want to call a law office or two to determine which contracts you
need so you don’t research the wrong contracts.
Don’ts:
1. Don’t use
general information as legal advice. Here are some of the reasons why:
A. Different Facts Mean Different Results: Any lawyer
or law professor can tell you that ONE FACT can change the entire outcome of a
case. For example, consider the case that held that McDonald’s was liable for
the wrongful death in an automobile accident caused by of its employees who
worked too much overtime, even though the worker had volunteered for same. Why?
Is a business now required to meddle into its employees’ lives? And, even if we
wanted that, realistically, could the business actually know how each of its employees
was feeling on a particular day and whether that employee was able to drive
normally? And, what’s “normal” for that
employee – or anyone? The critical fact
here was that the employee was a minor
and a student. That one fact changed the
outcome.
B. Your Case is Unique. Your case is not like anyone
else’s case. Each case is unique. General rules may not apply. General
information is not “advice.” Advice is based on your documents, your
facts and your circumstances. Advice is tailored to your specific facts – and that is what you need for something as
important as a legal matter. Legal issues can be – and often are – life
altering.
C. You are Unique. Representation needs to be tailored to your personal needs and motivations. For you the case may be in the ordinary
course of business, regrettable, but fairly routine. For someone else it may be
simply overwhelming due to personal or family health issues. Some clients
thrive on legal issues. Others do not. I have had clients walk away from very
strong cases with substantial money at stake because the husband was dying of
cancer and ill from chemotherapy and the wife was just overwhelmed by that and
other personal issues. So the question of what we do is different than what can
be done. What will be done depends on the consultation between attorney and
client. In short the representation can be tailored to your needs.
D. Legal Advice is not “One Size Fits All.” Except to
help you ask questions, general information may be no more valuable to you in
your particular matter than a pair of shoes off the rack may be for a
particular size and social situation. The advice needs to be suitable for what
you are doing, and also fit you, your circumstances and your objectives.
E. The Law Varies from State to State. Also, as you
may have gleaned by listening to the news, legal decisions are not consistent
but vary from one jurisdiction to another which means that the law from one
state to another may and almost always does vary. Some states do not even have the same legal
claims as others. For example, Arizona is liberal on negligent
misrepresentation claims; New York and Delaware are not. In fact contracts are
drafted to use or avoid the laws of certain states. Much of this knowledge would be beyond the
interest, knowledge and expertise of many non-business attorneys, let alone a
lay person.
F. Lawyers are not Licensed to Practice or Have knowledge
of Other State Law: Last but not least, attorneys are licensed by state and
are required and only required to pass the State Bar of the state they live in.
So, advice offline may not only be accurate for your facts, and in your
jurisdiction, but may be given by a lawyer who is not licensed in or
knowledgeable about the laws of your state.
2. Don’t use
form contracts from other matters and jurisdictions.
A. A Form is Not a Legal Contract for You.
For the same reason as online information is not legal advice, an online form
is not a legal contract that you just want to use without an attorney’s review.
First, it may be the wrong agreement, Second, as discussed above, the contract
may not even be valid, as written, in your state. It may and probably will have
been written by a lawyer who does not practice law in your state. If it has
been written by a non lawyer, it has included all legal advice or questions, to
avoid the unauthorized practice of law, if a non-lawyer is giving you legal
advice, beware.
B. The Contract Needs to Be Tailored for You. Moreover,
a stock contract downloaded from a website will not tailor to your specific
needs. Most of the time to make the contract work, regardless of who buys it,
i.e. whichever side of the transaction
buys it, the contract will be written “down the middle” on many key points –but
some of those key points may be critical to your interests and should be
discussed. Or, worse, the form contract may just eliminate many issues which
need to be covered; these issues may arise later at much greater cost and harm,
and, unaddressed in any agreement, be litigated by the parties. (Business
brokers’ contracts are infamous for this. The broker has no incentive to
resolve issues; he or she gets paid on commission of advocacy/ only if
the deal is done.)
C. A Form Contract Ignores the Necessity of Advocacy/ only
and therefore Loses the Benefits.
The practice of law is always advocacy; that
is, the lawyer and your contract should serve your interests as much as
possible. Many times the success or failure of a venture can depend on the
strength of the contract and it’s accompanying organizational documents. And,
that strength comes from your consultation with the lawyer about the special
facts and objectives of your company, its transactions and having a contract
written accordingly. For example, consider a simple contract for the sale of a
phone. A form contract may lack certain provisions that could have been added
to serve your special needs – like the right to repossess the phone if it’s not
paid for, and the agreed right of peaceful entry to do so. Obviously, the power
to shut down a business by repossessing its phone system is great leverage to
get paid. Alternatively, the contract could have
provisions that are directly adverse to you and which need to be removed or
modified. A common mistake is to use the contract a lawyer drafted in another
deal without having it reviewed and tailored for your deal. It may look okay,
but be 180 degrees from what you want.
D. You May Think You Know What You
Are Reading, but You Don’t. Clients
think that because a contract is in English that they can read, understand and
negotiate the contract. This assumption is virtually always false. First, legal
terms have special meanings, and those meanings vary in the context and may
interrelate with other terms in the contract or document. A lawyer would know to go immediately to the
indemnity section if he sees a damages or limitation of remedies section. A
non-lawyer justifiably may not know what I am talking about.
E. Non-Lawyers Will Not Know
What’s Missing. Also, clients often fall into what I call the “documents look OK to me fallacy.” They read and
negotiate only what is in the contract, not realizing that there could be pages of provisions which should be in
the contract which would protect them or advance their interests. But the other
side doesn’t want those provisions in there because they are adverse to their
client, and has no obligation to put them in, and without a lawyer, you won’t
even know they are missing. This is common in business sales and other forms of
sales agreements. Additionally, clients leave themselves open to huge breach of
warranty, consequential damages and punitive damages claims and awards that
could be eliminated or mitigated by good drafting. For example, the defective
bidding software that cost its purchaser $1.5 million in damages to a defecting
the software it under-bid a job which the purchaser then won and had to complete
at a loss. When the purchaser sued, its damages were limited to the cost of the
software, about $129.95. Reason: good legal drafting. And, no off the shelf
contract that I have seen does a good job of analyzing the situation and
drafting to maximize the possible benefits and mitigate the possible detriments
of the deal. This takes a little time and effort by the client and the attorney
but is overall, cost-effective, especially where the cost of the sales or
employment contract – or other agreement – is spread over many sales or
employees.
Unfortunately, about two out of three
new clients come to our firm because they have a problem with their signed contract or legal documentation, too late, they have received the previously
unconsidered information that their contract does not have a jurisdictional
provision (so they are being sued in Idaho); their contract doesn’t allow for
interest in storage fees (so they are paying interest and storage but can’t
charge the client for them); the star sales person is stealing clients but
there is no confidentiality and non-competition agreement in place this is another
example where the law varies: such contracts are almost impossible to enforce
in California but if well-written can be very enforceable in Arizona); the LLC
does not have an Operating Agreement ( so the members are arguing over how to
value the LLC interest in a buyout situation); the company does not have
buy-sell agreement setting forth the conditions and terms under which business
partners may part company (So money which might have been spent on “business as
usual” after or orderly split is spent on unproductive fighting). These are a
few examples of some common problems caused by mistaking general information
for legal advice and forms for suitable contracts.
I could go on, but I’m sure you see
the point. As Lincoln said “He who would be his own lawyer has a fool for a
client.” And, forgive me if this sounds harsh but you really have no idea what
a fool you are making of yourself if you practice do-it-yourself law. Some of my clients are justifiably proud of
their expertise in running their businesses, but make the mistake of believing
that their genius allows them to understand what has taken me decades to learn.
I can no more run my clients’ businesses than they can practice law. Every day
I see matters which could have been handled as brief, inexpensive office visits
before the deal, but which later are the subject of time-consuming and
expensive litigation. Worse, I see lives ruined because many mistakes are so
devastating the client cannot recover. I
know that time and money are always scarce for business owners, but that is the
very reason to spend time and money on loss prevention. Having good contracts and
legal organization will more than pay for itself – in fact, probably in just
one sale or transaction.
The Law Offices of Donald W.
Hudspeth, P.C.
Business Law, Commercial Litigation & International Business Law www.AZBUSLAW.com – 866-696-2033 – TheFirm@azbuslaw.com
“The Business of Our Firm is Business”
