Happy Halloween from Haber Slade

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The Coral Gables Chamber of Commerce Happy Hour

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Great dinner with great lawyers

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How To Spot a Client That is Likely To Be Trouble

When I first started practicing law, I wish someone had told me how to spot a client that was likely to be trouble. This is an art form, learned over time, which could have saved me and/or some of my partners substantial time and effort over the course of the last 25 years. And, judging from the sheer number of “Motions to Withdraw” being heard routinely at Motion Calendar, I have come to realize that I am not the only one who has been challenged by this issue. So, I decided to put together a list of things to watch out for, which is by no means inclusive, dispositive or all encompassing. Rather, the list, when taken together, may provide some guidance on the warning signs lawyers may want to consider when taking on a new client or keeping an old one.

1. Warning Sign # 1- The Prospective Client Refuses to Sign the Retainer
This is not a good sign. The retainer is an important part of the attorney-client relationship. A client who refuses to sign the retainer is likely not getting off on the right foot with his or her lawyers.

2. Warning Sign #2 – The Client, Once they Retain you, Questions Every Invoice.
It is normal for a client to question the invoices received from lawyers. After all, legal fees can sometimes be hard to understand. A client who questions a lawyer’s invoice is normal. A client who questions every invoice is not.

3. Warning Sign # 3 – The Client Calls Your Office Every Single Day

There are cases which justify a client contacting his or her lawyer on a single litigation matter every day. Injunction cases. Emergency matters. During trial preparation. However, the average case does not require daily client contact. It is one thing if the lawyer is calling the client every day; it is quite another if the client is calling the lawyer every day.

4. Warning Sign # 4 – The Client is Nasty to Your Staff.
We value our staff. They make our office work effectively. Without them, we could not be as good as we are. We take exception to people (including other lawyers) who are not nice to them.
5. Warning Sign #5 – The Client Routinely Does His or Her Own Research.
I like having clients who think and do their homework. It shows that they are interested in their case. However, a client that does his or own research on every issues suggests that either the client does not trust the lawyer or that the client is focused on the case in an unhealthy manner.

6. Warning Sign #6 – The Client Cannot Accept the Deadlines Provided by the Rules of Procedure and Demands a Faster Resolution.

It is hard for some people to understand that a defendant normally has 20 days to answer. To someone who may be owed money, or who has been wronged in some manner, twenty days may seem like a lifetime (not to mention routine extension requests which are almost always granted). What separates the good clients, from the problematic clients, is that the good clients accept it when you tell them that we have to give the defendants twenty days to answer. The problematic clients cannot accept this and are also more likely to question the fact that the other parties have 30 days to file responses to discovery. A client who argues with you about the deadlines set forth in the rules of civil procedure should either get themselves a seat on the rules committee or find another lawyer.

7. Warning Sign #7 – The Client Sends Threatening Emails to you and Your Staff.
The attorney-client relationship is supposed to be productive and mutually rewarding. When the client starts to send emails that are contentious, and impolite, it is time to start re-evaluating the relationship. Not every client keeps their pinkies elevated. We understand that. However, for those clients whose angst about deadlines, timing, delay and cost become an interference it is time to look hard at the relationship. Today’s nasty email often becomes tomorrow’s problem.

8. Warning Sign #8 – The Client Routinely Shows up at Your Office Unannounced.
Lawyers are schedule and deadline driven, by necessity. A client that comes to your office, routinely unannounced, often interferes with that. Couple that behavior, with those identified above, and you have a recipe for a problem.

The Warning Signs above, taken separately, are often not a cause for concern. Litigation, particularly high stakes litigation, can be stressful. Clients sometimes get stressed, as do their lawyers. The problem comes in when all the warning signs above coalesce into a single person and a single relationship. Lawyers often wait until the situation gets out of hand before filing a Motion to Withdraw or when it becomes too late when the case is on the eve of trial. This is why the attorney-client relationship must be continually evaluated by the lawyer to ensure that is both productive and mutually rewarding.

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The Perils of A Family Business or How to Save Thanksgiving

Imagine that you are sitting at the Thanksgiving dinner table with your family—aunts, uncles, cousins, and distant relatives from out of town.  Someone at the table cavalierly asks: “who did you  vote for ?”  World war III breaks out while the family members debate Hillary versus Trump.

Now imagine that these same people are shareholders and employees in your family business.  If these people cannot agree among two candidates about whom to vote for, how they will be able to agree about the joint management of their financial affairs?  The answer is – only with great difficulty.  This is one reason why so many family businesses, and so many families, end up in costly litigation.

Here are some observations, from someone who has litigated many intra-family disputes, about what might have been done to avoid a nasty and expensive lawsuit.

I.          Sign a Contract

It may seem elementary, but this fundamental concept is often ignored by people in business.  Should you really sign a contract with your brother about the maintenance of a family business?  After all, isn’t this the person that you grew up with, shared a room with, and is your best friend?  Of course you should.  The interesting thing about the negotiation of shareholders’ agreements among family members is how absolutely divergent the views are of different family members about how to run the business.  These views often manifest themselves in the negotiation process.  Imagine, however, that there was no negotiation process and, instead, the business simply began and the debate commenced without  a written agreement.  The likelihood is that chaos would ensue, profits would dissipate through disagreements and nothing of a material nature would be accomplished. Thus, this basic point — the execution of a contract — is a fundamental and necessary component to the establishment of a family business.

II.         Establish a Hierarchy

Someone has to be the boss.  Historically, it has been Dad.  However, in “modern families” other people can be asked to assume the mantle of leadership.  Generally, it is wise to choose the person with the most business experience, the best education, and the most obvious leadership skills.  In any family, the appropriate candidate should be obvious.  If the parties cannot agree on this, it is generally a bad sign.  Leadership is essential to any business and a family business is no different.

III.        Treat The Family Business Like A Real Business 

            The family business is a real business.  The family business should not be run like a family. The conversation between the leaders in the family business should not mimic the conversation at the Thanksgiving dinner table.  Rather, family businesses should conduct regular meetings, where notes are taken, minutes kept, and tasks assigned.  You should be able to judge the potential success of your family business by determining how easy it is to apportion tasks among family members after the Thanksgiving dinner is concluded – who will wash the dishes, the pots, clean the tables, fold the linens and take out the garbage?  If this process proceeds smoothly following the big dinner, there is a greater likelihood that the family business has a chance of success.  If the parties cannot agree, following dinner, how to clean up, how will they be able to run a business?

IV.       Utilize written job descriptions

            The easiest place to witness a good old fashioned power struggle is in the family business. This is because the people who comprise it have a long history together. In every family there are those who win the power struggle and those who lose it. Those struggles could be over the color of a room, the radio station that is played in the car during the family vacation to what everyone eats for dinner. The family business is an opportunity for the perennial loser to flex his or her muscles and establish a new beachhead, a place where his or her opinion is heard and obeyed. The problem is that it is only sometimes that the person who is espousing an opinion actually has the expertise to do so. Maintaining written job descriptions will create necessary boundaries and will ensure that only those people with a particular expertise handle those areas 

            V.        Maintain   Performance Measurements

            After Cousin Johnny joins the family business he needs to be able to accept criticism.  Cousin Johnny’s performance must be measured.  Cousin Johnny must be treated like any other employee.  If Cousin Johnny is given preferential treatment, by Dad, because he is Cousin Johnny, there will be resentment by other family members and by other employees who might not be family members.  Cousin Johnny’s performance should be reviewed at least once a year and honest feedback provided.  Cousin Johnny should have a personnel file in which notes are kept.  This will prevent problems with Cousin Johnny in the future if, for some reason, he is removed from the family business and decides to sue.  Treating Cousin Johnny like an employee is a much better idea than treating Cousin Johnny like Cousin Johnny.

VI.       Establish and Maintain Written Hiring Criteria

            If a family business is successful, the likelihood is that it will expand into hiring people who are not members of the family.  It is also possible that additional family members may want to join the business.  After all, everyone wants to be successful and what better way to be successful than to join something that already is successful.  Plus, if your family business prospers, you might find relatives coming out of the woodwork asking for jobs.  This is why you need to maintain written hiring criteria.  You might decide that it is important for your family business to hire only college graduates, or individuals with engineering degrees.  This will assist you in rejecting candidates, whether family or not, who may not have the requisite criteria.  If these hiring criteria are maintained in writing, it will make Thanksgiving dinner all that much easier when Cousin Bob, whose application been rejected from the company, appears at your doorstep, Thanksgiving morning, holding an apple pie.

VII.      Establish an Advisory Board

            The problem with working with a family member during the day and then having Thanksgiving dinner with that family member the following weekend is that issues regarding the family business are more likely to arise at inappropriate times— e.g., during holidays, on weekends, or during the evening.  If “Dad” or “Mom” is in charge of the business, this is more likely to happen.  One suggestion for taking Dad or Mom “out of the loop” would be to establish an advisory board of individuals who have been retained for the purpose of dealing with sticky issues, within the family business, which might place Dad or Mom in an awkward position.  Let the “advisory board” take the heat for a difficult issue.  In this manner, Mom or Dad can explain, before asking Cousin Johnny to “pass the turkey”, the decision that was made, which may negatively impact him, was out of our hands.  The decision was made by the advisory board.

Enjoy your Thanksgiving Turkey with your family and do not discuss either business or politics.


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Ten Things to Consider When Negotiating a Contract

1. Who are the contracting parties. If you are the payor (the person that is paying under the contract) it is best to avoid a personal guaranty. If you are the payee (the person receiving payment under the contract) it is best to get a personal guaranty.
2. What is the consideration. Typically, for contracts to be enforceable, there has to be consideration which, in laymen’s terms means, that one party needs to give something and the other party needs to get something.
3. The contract should be signed in front of a notary public. Signing in front of a notary reduces the possibility that one signatory may later claim that the signature on the contract does not belong to them.
4. Carefully proofread the contract. Typographical errors can obscure the meaning of the contract which may cause a Court to later determine that the contract is “ambiguous.”
5. Avoid constructions against the drafter. If you are the party drafting the contract, and the contract is being negotiated, you should include a clause that says that, in the event of an ambiguity, which is discovered later, the contract will not be construed against you. In other words, the ambiguity will not be held to be your fault; the fault will be shared equally.
6. Maintain your home turf by including a jurisdiction and venue provision. It is always better to litigate in your home state if litigation becomes necessary. For further evidence, ask the Golden State Warriors.
7. Be careful to use the correct draft. Circulating multiple redline drafts of a contract can be very efficient. It can also be fraught with peril if you use the wrong draft since a Court is likely to enforce the draft with the signatures on it regardless of whether it is the correct draft or not.
8. Make sure the person signing on the other side has the authority. Check to see if you need a board resolution if the contracting party is a corporation or other business entity. Not all corporate leaders are vested with the authority to sign large contracts. Read the company by-laws of the other contracting party if necessary.
9. Make sure the contract clearly spells out deadlines and required time periods and avoid vague language like “as soon as possible” or “promptly.” Instead, try this: “no later than thirty days from the execution of this agreement.” Its hard to argue with that language.
10. Verify and do not rely on oral statements. People make all sorts of claims when negotiating a contract. It is best to verify the truth of those statements through documents or financial statements. Don’t take anyone’s word for it.

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  1. When the process server comes to the door, with the complaint, make sure your name is on it before you accept it.
  2. Do not speak to the process server other than to say “thank you” (once you determine that your name, or your company name, is on the complaint)
  3. Accept service once you determine that it is you; avoiding service or running away from the process server also makes you look bad (think O.J. Simpson in the White Bronco).
  4. Call your lawyer and schedule an immediate appointment (generally, you only have to 20 days, absent an extension, to respond to a Complaint.)
  5. Retain the lawyer by signing his or her retainer agreement.
  6. Write down the date your response is due to the complaint.
  7. Download all of your relevant email and other documents and send it to your lawyer; do not destroy anything.
  8. Make a list of everyone that may corroborate your story and provide the list (names, addresses and telephone numbers) to your lawyer along with a description of everything these individuals may know.
  9. Explain to your employees (if applicable) what the lawsuit means and instruct them not to speak to anyone about it other than you and your lawyer.
  10. Shut up – don ‘t call your adversary, your friends, or your Mom to tell them about the case. It may come back to haunt you later.

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