Presentation on theme: "Minor, Bell & Neal, PC. L ESSONS FROM THE FRAM OIL FILTER GUY (HOW TO EFFECTIVELY SELECT AND UTILIZE LEGAL COUNSEL) Presented by:James L. Catanzaro, Jr."— Presentation transcript:
Minor, Bell & Neal, PC. L ESSONS FROM THE FRAM OIL FILTER GUY (HOW TO EFFECTIVELY SELECT AND UTILIZE LEGAL COUNSEL) Presented by:James L. Catanzaro, Jr. Minor, Bell & Neal, P.C. 110 Battlefield Crossing Court Ringgold, GA 30736 (706) 861-2075 email@example.com
Minor, Bell & Neal, PC. Why this title? Fram Oil Filter tag line was a mechanic saying, “pay me now or pay me later” but real message was that paying the mechanic to install a $10 filter would serve as insurance against a latent, catastrophic event.
Minor, Bell & Neal, PC. The Fram Oil Filter commercial conjured this image: a car on the side of the road with steam coming out from underneath the hood. We all know that when this happens, we must pay a mechanic significant money to right things
Minor, Bell & Neal, PC. Why is this relevant for you? If your business neglects to put in place forms of protection, catastrophic legal events may put your business on the side of the road. At that point, you are faced with paying an attorney significant money try to help you right things.
Minor, Bell & Neal, PC. In the latter scenario, similar to with your car, you cannot effectively manage costs because there is no long term relationship and the legal fixes available (if any) are about damage control.
Minor, Bell & Neal, PC. What are some latent legal risks that can put your business on the side of the road?
Minor, Bell & Neal, PC. 1.Failing to exclude/modify “boilerplate” clauses in contracts or purchase orders/invoices
Minor, Bell & Neal, PC. Example A. Force Majeure Clause in a Supply Arrangement: If the performance of this agreement is interfered with for any length of time due to reasons beyond Supplier’s control, government restrictions, war, acts of terrorism, riots, strike, lockout, utility interruptions, acts of God, or any other similar causes, Supplier shall not be responsible.
Minor, Bell & Neal, PC. Effect: This clause means that if circumstances are arguably beyond the control of your supplier, you may not be able to enforce the contract if they have failed to provide needed goods/materials.
Minor, Bell & Neal, PC. Sharpen the Example: What if you plan to incorporate materials or goods from that supplier in a product you are under contract to deliver? Your business gets squeezed from both sides. (No breach claim against the supplier but the party contracted for your product has breach claim against you).
Minor, Bell & Neal, PC. Example B. Limitation of Damages: Supplier shall not be liable for any incidental, special, or consequential damages.
Minor, Bell & Neal, PC. Using the same scenario (supplier providing to you needed goods), even if there was no Force Majeure, if supplier failed to provide goods and breached your supply agreement, you could not recover damages resulting from your failure to perform for your buyer (a consequential damage), just the cost of “cover.”
Minor, Bell & Neal, PC. 2.Operating your business so that it is characterized as a partnership under the law.
Minor, Bell & Neal, PC. Example. Two or more persons operating a restaurant sharing net revenues arguably create a partnership under the law.
Minor, Bell & Neal, PC. Effect: Partners are personally liable for the torts or contracts of the other partner. Equity in your home, investments, etc, subject to collection.
Minor, Bell & Neal, PC. 3. Creating “implied authority” in agents.
Minor, Bell & Neal, PC. Any act or failure to clarify which leads third parties to believe that an employee or contactor is authorized to perform certain functions for your business. The effect of a finding of implied authority is that your business could be held liable under a contract not approved by appropriate personnel.
Minor, Bell & Neal, PC. Example: Supplier reasonably believes that employee has authority to commit the business. Employee signs credit arrangement, runs up charges for goods or items he or she personally uses, but your business is held responsible for same.
Minor, Bell & Neal, PC. How Does Your Business Install a “Filter” to Insure Against Such Risks? Establish a “partnership” with a properly skilled attorney.
Minor, Bell & Neal, PC. What is a “Partnership” with an Attorney? A relationship with an attorney who understands your business and has a long-term perspective. This attorney can help you plan, manage cost and engage in damage avoidance.
Minor, Bell & Neal, PC. How Do You Select Such a “Partner”? Do not wait until your business is on the side of the road!
Minor, Bell & Neal, PC. 1.Identify attorney/partner candidates by talking with other similar business people (formulate list).
Minor, Bell & Neal, PC. 2.Consult Martindale-Hubbell to review attorney bios, practice areas and ratings for list of attorneys. (see www.martindale.com)
Minor, Bell & Neal, PC. 3.Interview attorney candidates/explain the process you are undertaking. (Ask if the attorneys charge for initial interviews, most do not).
Minor, Bell & Neal, PC. 4.Address fees up front. Ask about hourly rates and explain what your business is prepared to pay for appropriate insurance. Explore flat fees (retainer arrangements) or budgeted arrangements.
Minor, Bell & Neal, PC. 5.Ask about the impact of the attorney’s learning curve on fees and who will be primarily responsible for handling your matters.
Minor, Bell & Neal, PC. What is Effective Utilization? Treat the attorney as a business partner. Let the attorney learn how your business operates so the attorney can tailor legal services to your business goals.
Minor, Bell & Neal, PC. For each matter to be reviewed, provide a detailed context so that deal points are preserved and enhanced and risks clearly identified.
Minor, Bell & Neal, PC. Example: Your purchase order/invoice terms should help you meet the obligations and goals of your business. Perhaps warranties should be limited in scope and exposure for breaches curtailed.
Minor, Bell & Neal, PC. Establish project budgets.
Minor, Bell & Neal, PC. Always review monthly bills (insist on detailed invoice).
Minor, Bell & Neal, PC. Conclusion: The effect of establishing a partnership like relationship with an attorney is to create the oil filter like insurance against events that can put your business on the side of the road.