Sunday, February 24, 2008

The Reality of Legal Fees

A couple of weeks ago I was having lunch with another attorney, and I was lamenting about the fact that clients have such a difficult time understanding legal fees. The public tends to think that all lawyers set out to take advantage of their clients and charge inordinately high hourly rates without justification. Nothing could be further from the truth for most attorneys.

The moment a client calls, the first thing I do is determine whether their claim merits the involvement of a lawyer, and whether the ultimate recovery will exceed the cost of pursuing the case. We attorneys recognize that most disputes ultimately come down to money, and the goal is to end up with the most money in your pocket, or prevent a payout on your part.

There are really very few situations in which you will recover your attorney's fees. Even though most of the claims I file on behalf of homeowners will entitle them to attorney's fees, when it comes to settlement, they are rarely included. Most (in my case over 90%) cases settle. The cost of a trial and the chance of collecting on a judgment are just too great and too risky for most parties. For that reason, we always keep the attorney's fees in mind.

Principle is expensive. I wish I had a dollar for every time a potential client tells me that it's all about the principle, and not about the money. I always say, "Do you know what you will be telling me six months from now?" They look puzzled and answer "what?" "Your bill is too expensive!" Even if it's about principle now, at the end of the day, it will almost always be about the money. It is my job to be objective and level-headed and keep reminding you of that.

Fees. Attorneys are in a service profession. We have put in many years to learn our profession and you are paying us for our expertise. We charge for meetings, phone calls, e-mails and the time spent working on your case. I had one client who would always talk as fast as she could when she called me, until I assured her that I want my clients to feel free to call me, and I will only charge for the time spent discussing the case. I do not charge for the time spent talking about the Red Sox (unless you are a Yankees fan).

There is a constant debate in the legal profession about how to make our billing system more palatable to clients. We talk about flat fees, billing in phases, etc. The problem is, in litigation, too much of what we have to do is completely unpredictable. Most of the tenor of the case and the amount of work involved is dependant on the other side and their approach to the dispute. A cooperative opposing counsel may have the goal of resolving the dispute in the fairest, most expedient fashion possible. On the other hand, someone with a difficult, highly combative client, or an attorney who acts like a bulldog is going to drive costs up immensely. That is why we always try to keep the end in mind and keep costs down as much as possible, but cannot always do so.

I always say if I had a crystal ball, I would start a hedge (investment) fund. I want you to win as much as you do, but I cannot guarantee outcomes. So much of what occurs in a lawsuit is outside the attorney's control. I can only promise to put in my best effort and provide quality service and do excellent work. That is why you pay for my services. It is my hope that at the end of the day I will reduce the impact of your claim enough that you can move on with your life without having suffered a financial disaster. If you are made "whole," that is a win. If you get a windfall, which is extremely unlikely, that is an incredible bonus. Lawsuits are not intended to make you win the lottery.

So, when thinking about hiring a lawyer, make sure that you hire someone who factors in the cost of his or her services, and keeps the net result in mind. The goal is to minimize the damage you have suffered, and if that is achieved, the cost involved will have been worth it.

Tuesday, February 19, 2008

Anatomy of a Claim Against a Homeowner

The other day I posted on the usual procedure for bringing a claim against a contractor. Today I am focusing on what the contractor should do when bringing a claim against a homeowner. Some of these steps specifically apply to Massachusetts law.

1. Make sure you have a good contract that is in compliance with your state law. In Massachusetts this means complying with the Home Improvement Contractor Act, M.G.L. c. 142A. Keep in mind that you cannot collect attorney's fees in MA unless you include that provision in your contract. Decide whether you want an arbitration and/or mediation clause in your contract.

2. Make sure you are registered with your state, if required.

3. If the homeowner refuses to pay, file a mechanic's lien. Remember that the law regarding mechanic's liens is very specific and it is very easy to fail to do it properly.

4. Write a demand letter to the homeowner with a clear explanation as to why you are owed the money. Give the homeowner a chance to say why he/she does not want to pay, and try to resolve the situation without being forced to take further action. It is much easier for a contractor to address a punch list item and get paid quickly than to be forced to file a claim against a client. In Massachusetts, you could be subject to double or triple damages, attorney's fees, interest and costs if you violate the MA Home Improvement Contractor Statute.

5. File suit to enforce your lien, or make a demand for arbitration or mediation.

Monday, February 18, 2008

Mediating Home Contractor/Homeowner Disputes-On Television

This posting is from David Leavitt, who is developing a television show to mediate home renovation disputes. Anyone who is interested should contact David directly. This sounds like an interesting way to resolve disputes without pursuing litigation:

I am casting Homeowners and Contractors for a home renovation dispute mediation and resolution TV show.

The scope and breadth of the dispute can range from any of the problems you usually see including, but not limited to, type of work, budget, build problems, personal problems, and homeowner changes.

Since we are a television show, we MUST complete the project in a relatively short amount of time (about 6 days), which will fit nicely with the needs of a homeowner and contractor. This means we seek projects that are large enough in scope to show a good before and after experience, and small enough in scope to be finished in no more than about three weeks. Some examples would be a kitchen expansion, new room, bathroom remodel, garage build, etc. Please keep in mind that we will consider all sizes of work if the people and the project appear good for the show.

We intend to make absolutely sure that the dispute is solved to the satisfaction of both parties and that the project gets done right, on time and on budget. It should be a benefit for the homeowner via dispute resolution and project management, and for the contractor for the same reasons as well as excellent publicity for his or her business. And of course, it could save them both the time and cost of legal action.

Interested parties should contact me immediately!
The sooner we speak, the sooner we can try to resolve your dispute!
Please call or email me ASAP!

David Levitt
Casting Producer
Superfine Films
60 Grand Street, 4th Floor
New York, NY 10013
O: 212-941-6838


Superfine Films is a Manhattan based film and television production company specializing in high-quality social issue documentary and reality television.

Our mission is to create unique, compelling, genre-redefining content that challenges, excites and engages viewers from start to finish.

Founded five years ago by award-winning filmmaker and television producer Steven Miller, Superfine has since grown to include the talents and energies of a tightly knit corps of writers, producers, shooters and editors, and is represented by N.S. Bienstock.

Superfine is currently in production on the sixth season of the hit show Psychic Detectives, the Court TV crime documentary series that explores the use of psychics by law enforcement and how psychics have helped to actually solve crimes; and Rock and Roll Acid Test, the Fuse Network series that plays a wild game of Truth or Dare when we put music myths and legends under the hot lights of our ultimate scientific testing.

Past work includes Heroes, a reality recreation based series for the Hallmark Channel, which depicts stories of ordinary citizens in acts of extraordinary courage. Superfine was nominated for an Emmy for the documentary film Meeting with a Killer: One Family┬╣s Journey, a story of redemption and forgiveness set inside one of Texas most notorious prisons.
Superfine has won two Gold Awards from the Houston International Film Festival and a CINE Golden Eagle for the acclaimed series Adoption.

Friday, February 15, 2008

Anatomy of a Claim Against a Contractor

Even though every client's claim is different, there is a common approach to most home contractor/homeowner disputes. Clients want to know the big picture and the pros and cons of the options available to them. From the homeowner side, the steps to take are fairly consistent:

1. Send a demand letter-In Massachusetts, any violation of the Home Improvement Contractor Statute is a per se (automatic) violation of the Consumer Protection Statute, M.G.L. c. 93A, which affords one the possiblity of double or triple damages, attorney's fees, interest and costs. In order to comply with the requirements of 93A, one must write a 30-day demand letter describing the unfair and/or deceptive practice that has occurred and making a demand for damages or action on the part of the contractor.

2. Evaluate-Evaluate whether there has been a response from the contractor and see if settlement is possible.

3. File suit or file for arbitration-In order to file suit, determine the likelihood of success and see whether a judgment would be collectible. See whether the contractor has any assets that can be attached (if one can put a lien on the asset).

See if the case qualifies for the state run Home Improvement Contractor Arbitration Program. Read the contract to see if there is an arbitration clause. Determine if the other side will consent to private arbitration or mediation.

Discuss the pros and cons of arbitration vs. litigation.

Continue to see whether settlement is an option.

Even though the consumer may be able to claim attorney's fees, he should always keep in mind that they are not usually included in a settlement figure, and judgments are not always collectible.

Homeowners should therefore try not to throw good money after bad, and should continually re-assess as the process continues. Litigation can become quite costly fairly quickly, so parties should make informed decisions about how to proceed.

Tomorrow-Claims From the Contractor Side

Wednesday, February 13, 2008

Contractors Say Recession Is Here

The Boston Channel ran a story about the current economy and how it has affected contractors.