Wednesday, June 5, 2013

Setting limits so you can afford to litigate.

A lawyer can help you with a whole lot of things in your life.  Heck, as a young lawyer, I even waited tables at a client's restaurant when his waitress called in sick on a Saturday (I made $50 in tips). As an older lawyer, I now have some clients who find value in calling me for advice over a wide range of business and personal matters, sometimes on a daily basis, and without much concern for the cost. That is truly the exception.

As a general rule, new and existing clients hire the firm for a specific task, such as review of a contract ("can I cancel/enforce this deal?"), or to answer a specific question ("if my business partner steals all the money, will I personally owe on the LLC tax bill?"). These are called "limited scope representations." 

Our practice, which mirrors the practice of most law firms, is to write down the scope of our engagement, as agreed by our clients. This avoids heartburn for all- you know what is to be paid, and we know what must be done to get paid.

But litigation is slightly different. If hired to prosecute or defend a lawsuit in the state or federal courts of Maryland and the District of Columbia, your lawyer is subject to court rules dictating what must be done, and when a lawyer may get out of a case. And if you have limited resources, you have to understand how your desire for limited scope, and limited costs, can sometimes be out of your lawyer's control. Most litigation engagements are broadly written precisely because litigation can be a pandora's box of cost and expense.  But if you understand some of the moving parts, you can still craft a reasonable limited scope engagement.

A lawsuit is like a big, messy, sandbox where the other children may not play nice.  And it is very likely that nobody wants to be in the sandbox, to begin with.  The only moment you are in full control of your lawsuit is when it is filed.  But once filed, how your case proceeds, and at what cost, can be greatly influenced by others- the court, the clerks office, your witnesses, and certainly the opposing side. 

Every court system has general rules, published in books that all lawyers have, which dictate how and when things must be done.  And then there are standing orders that apply to a particular courthouse.  Within each courthouse, the individual judge may have standing orders about how cases run in his or her courtroom.  Now add the scheduling order issued by the Assignment Office for your case, often with a fixed administrative deadline when the case must be completed, and managing your case cost and expense just got complicated.

Your witnesses, particularly experts, cost money (non-experts get reimbursed for expenses, while experts also get paid for their expertise), and they have their own work schedules and family emergencies. The more witnesses you have, the more complicated scheduling court dates, depositions, and trial becomes. A subpoena will force a witness to appear, but reasonable accomodations to a witnesses needs makes for more cooperative witnesses.

Your opponent certainly has a different idea about the case.  In fact, disagreement with your opponent likely triggered the lawsuit, right? So don't expect accommodation, and don't expect cooperation.  As officers of the court, and as professionals, the attorneys will extend various scheduling courtesies to each other, but that does not include compromising your opponent's substantive claims and defenses. And when the parties can't agree, it usually triggers a court proceeding to decide the issue. And that means cost and expense to you!

How do you minimize your cost and expense? The ethical rules in both Maryland and the District of Columbia permit lawyers to make fee agreements that limit the scope of engagement.  And so, if you don't want to spend money on depositions, you can carve that out of the engagement.  Some of our clients have requested this type of limitation.  But please know that you cannot prohibit your opponent from requiring depositions, or from serving written discovery requests, and that will require some participation by your lawyer, which equals expense to you. You also cannot carve out a court's particular requirements, such as mandatory conferences, hearings, status reports, mediation, exhibit preparation and exchange, and motions. Each one of these equals cost and expense to you.

Litigation is a very effective tool to resolve disputes, recover damages, and to protect your business and property interests. If you have limited resources (as we all do!), discuss possible limitation of the engagement with your lawyer, and write it all down in the fee agreement.  And even after you establish a budget, expect some surprises created by the other side. The fee agreement may even require amendment as the case progresses. But if you work hand-in-glove with your lawyer, you can achieve your goals.