Most people justifiably assume that when they hire an attorney to represent
their interests in a lawsuit over a business dispute, that the attorney
is on “their side.” In most cases, that is a safe assumption
. . . at least when it comes to the arena in which the client is lined
up against the opposition in the dispute. However, there is another relationship
in the litigation arena in which the wise client will understand that
his interests and his attorney’s interests are not necessarily always aligned.
This can be well illustrated with two very different outcomes from two
similar efforts I made recently to settle two different business disputes.
In both cases, I met with the client just after they had been named as
a defendant in a lawsuit. In both instances, I advised the clients that
the economic burden of litigating the lawsuits was going to be substantial
and that a resolution of the dispute at the outset, if possible, was likely
going to be in their best interests. There were significant reasons for
this. In both cases, the parties had years of a prior positive business
relationship that had been mutually profitable. If the rift could be healed,
there was the opportunity for restoring the business relationship. In
both cases, the amounts of money in dispute were relatively small. This
was a critical fact because the costs of litigation may often be many
times more than the total dollars recoverable. While litigation is often
a no-win situation for even a victorious defendant, victory for a plaintiff
can likewise be a “practical defeat” when the actual recovery
is less than the amount of attorneys’ fees. In both cases, I convinced
the client that the wise path would be to attempt to open a dialogue with
the other side to explore early resolution. Here is where the roads diverge.
In the first matter, I encouraged my client to directly contact the party
on the other side, who he knew well, to explore their willingness to engage
in settlement discussions. He was cautioned not to talk about the substance
of the dispute but only the willingness of that party to try and resolve
it. We worked out ahead of time a number of options that my client was
willing to offer to resolve the dispute. Among those ideas were several
business concessions that cost the client little but had real value to
the other side. Within a day, the outline of a deal was worked out between
the two clients and within a week the settlement agreement was drafted
with the joint effort of both party’s attorneys. The lawsuit was
dismissed before my client even had to file an answer. Needless to say,
the attorneys’ fees were minimal and my client was happy. My experience
has been that happy clients are far more likely to come back again and
refer others to our firm. Unfortunately, not all attorneys have a long
term view of business development in these economically challenging times.
Such was the case in my second example.
As with the first matter, I encouraged my client to explore a willingness
to talk about settlement. As I always do in these situations, I advised
my client to respect any expressed desire of the other side to involve
their attorneys in the settlement dialogue. After my client’s repeated
calls to the other party were ignored, I called the other side’s
attorney directly to discuss having a dialogue about possible resolution.
It became clear immediately in my phone call that having this case go
away quickly was not something the other attorney had any interest in.
He hemmed and hawed and the tone of his voice made it clear to me that
a quick resolution was not good news for him. I pressed him as to why
he would pass on the opportunity to at least sit in a room and explore
options for resolution. I offered that we would agree to invoke the “mediation
privilege” so that our discussions could be open and frank and we
could speak without concern that what was said could be used in the litigation.
I assured him that I would be open to hearing his client's perspective
as it would help me to better advise my client on his risk of going forward
in the litigation. He finally said he would consider it and get back to
me. I heard nothing for two weeks and then I received the answer - a large
package in the mail which contained a big set of interrogatories, document
requests, and other discovery. His answer was “no.” No, he
would not meet to discuss resolution. No, he would not discuss what he
and I thought were the relative merits of the case. No, he would not give
us an early settlement demand.
The unfortunate reality is that we are seeing an increasing number of situations
where the attorney on the other side appear to be hanging on as long as
possible to cases to at least enjoy several “good billing months”
before the case goes away. Some of these attorneys will work a case hard
for months, even years, only to then strongly recommend settlement as
the case gets close to trial. Often the terms of that eve-of-trial settlement
could have been achieved much earlier in the case and before the incurring
significant portions of the obligation for attorneys’ fees.
So how did this second attorney justify an unwillingness to sit down and
talk? I'm certain, that he went to his client (assuming he even told
them about the overture) and convinced them that this was some sort of
nefarious strategy on my or my client’s part and that their interests
would be better served by letting him do a little initial work - several
thousand dollars or so – before they talk settlement. Most clients
trust their attorneys and view the litigation process as a great mystery
- a black box from which justice somehow magically appears. They often
don't really understand what's going on and the unscrupulous attorney
may use legal jargon to present to their clients some plausible sounding
strategic benefit justifying the need to do more work and keep the case going.
So what steps can you take to insure that your attorney is really on your
side? First of all, you, as the client, need to
understand the “big picture.” You need to know at the outset of any case
what the most realistic end result is and what the game plan will be to
achieve that result. Does that include early settlement discussions, taking
a key deposition or some other action that will result in a quick resolution
of the case? Second,
keep informed. Pay attention to the monthly invoices which should document what your
attorney is doing. Finally,
ask questions. Why are we doing what we are doing? How is that work consistent with the
game plan? Why aren’t we talking settlement? When your attorney
is on your side, he or she should always be willing to explain the reason
for what is being done or not being done. If answers are not forthcoming,
or they don’t seem to make sense, don’t let it go. Press for
answers. Get another opinion.