Maximizing Your Legal
By Matt Dickstein
times are tight, you might do your transactions without a lawyer, to save on
legal fees. Although understandable, this is bad practice.
times are tight. What should you do if you don’t have the budget for a
comprehensive legal review? Listen to Abraham Lincoln. When asked how long
his legs were, Abe Lincoln replied, “Just long enough to reach the ground.”
Sometimes you don’t need perfection. Sometimes you want “just good
competent legal work should try to hit the ideal “just good enough” point.
That is, the legal work should strive to hit the ideal cost / benefit
point. This point is a moving target that depends on a lot of factors. For
legal transactions, the two most important factors are tolerance for risk
and ability to pay. Assuming your lawyers are honest and competent, the
more you spend on them, the more they protect you. Conversely, the less you
spend, the less protection you get.
course you want to reduce risk the same as any other business. But when
times are tough, you don’t have the cash flow to get maximum protection.
You need “just good enough” protection on the cheap. This is where a
lawyer’s real skill comes in. A good small business lawyer can triage your
risks, then cover them in order of priority within your legal budget. Here
you cover your big risks as best as you can afford and you let the little
things go. It’s a calculated risk.
see all this theory in action, let’s look at a typical commercial lease. A
commercial lease can run up to 40 pages of small print on 8 X 14 paper.
Every single sentence benefits the landlord. As a tenant, you don’t have
the time or money to argue the entire lease. You can’t fight the hundreds
of battles in the lease – instead you must choose a handful of make-or-break
issues and really go to war on them. You need to prioritize, to focus your
lawyer’s time on the really important issues. For example, you might start
with base rent, move to pass-through (triple net) costs, then to tenant
improvements, then to assignments and sublets. And you might let go on the
split of condemnation proceeds.
do you get this kind of review? First and foremost, you need a good and
trusting relationship with a business lawyer. A lawyer must know you and
trust you to give you this kind of service. Understand that a lawyer incurs
his or her own risk in doing your cost / benefit analysis. If your lawyer
tells you to focus on issues A, B and C and let go on issues X, Y and Z, the
lawyer has malpractice liability if issue Y becomes a problem a few years
down the road. With this in mind, you can’t expect a lawyer to stick his or
her neck out for you without a good relationship in place. And do your
lawyer a favor. Tell your lawyer in writing that you agree to the limited
review in return for reduced fees. Give your lawyer all the CYA language he
or she needs.
me wrap this up now. I am not telling you to do all your deals on
the cheap. That’s just playing Russian roulette – you’ll suffer tomorrow
for being cheap today. What I’m saying is this – if you don’t have the
money for a full legal review, then get a limited review. Get the best
review you can within your budget. Get a good small business lawyer to help
you figure out just what protection you can get for your money.
me to schedule a legal consultation: