Your lawyer and the “litigation bluff” as a business tool.

Many business owners misunderstand the successful and efficient use of a lawyer when confronting a business problem, say a breach of contract or some other business issue. Many believe  you go to a lawyer to litigate….and if left to his own imagination, that is exactly what the lawyer will set you up to do…litigate and will charge you allot while telling you the results are always unpredictable.

Unfortunately both the business man and the lawyer have missed the potential for a cost efficient resolution for most business problems. Its called the “litigation bluff” and it works most of the time, not all, but its worth a try most of the time.

Here is the point. Nobody wants to sue or be sued for many reasons.

• First its damn expensive for all parties, the plaintiff and the defendant, thats good news.
• Second its very time consuming.
• Third the damages and results are sometimes devastating to either or both parties.
• Fourth it takes years to resolve, way too long, and you have to pay along the way before anyone knows who the victor will be, and the price is very high indeed.

As spoken so many times the only one who will definitely win are the lawyers. It is true that some issues are appropriately resolved through litigation but most are not.

Since it is clear that most if not all businessmen believe  the above stated four realities, we are primed to use the “litigation bluff”, it works extremely well as this is what the system is intending to occur.

You go to your lawyer with a problem, your vendor miss-shipped yet is billing you anyways, a contract is broken, whatever, and you review the facts with the lawyer, who then recommends a law suit and a $10,000 retainer and tells you to be prepared for another $15,00 prior to trial and an additional $25,000 or more for the trial, etc.

You say, all I want is the sternest nastiest letter imaginable sent to the “defendant” restating the facts and the likely outcome should you be forced to litigate and a strong suggestion that if the defendants lawyer calls him by Friday with the intent to settle we may be able to work this out, if no call litigation will be commenced without further notice or discussion and no further resolution or settlement talk will be entertained.

This leter should cost $500-$1000 plus the interview time. If all works out the entire job will cost $2500-$5000 and a resolution will be in hand within thirty days. Done.

So the “defendant ” gets the letter and the following occurs. He calls his lawyer and makes an immediate appointment all excited and very worried. He goes to see his lawyer who is now already to prepare for litigation and discuses with the defendant the cost of retaining his services and the likely costs going forward and the slim chance of victory.

On the other-hand the “defendant” soon begins to see the light and with or without the suggestion from the attorney is beginning to think about the merits of resolution, as one way or another he is going to spend some money, maybe lots of it.

So he makes the right decision and authorizes his lawyer to call your lawyer and engage in a resolution discussion. With luck it will be over in a week or two and while each party may not get what they want, its resolved and with the least possible cost and soon. This allows both to return to the better use of their time focusing on profitable business.

A single letter replaced years of litigation and a fortune in legal expenses.

Now lets say the “defendant” does not bite at the bate, next step is to pay for the suit to be filed, maybe $2500. in fees but done without the intention of ever litigating as that is where the huge expenses are outlaid, but it ups the anti and forces the “defendant” to hire a lawyer and be prepared to spend a small fortune without a clue as to the outcome.

This provokes another chance to settle although the settlement is now more costly because you spent more on litigation. The deal is then resolved and everyone goes home, and you have invested an affordable amount of time and money and have achieved your objectives, while compromising your desired result to some degree.

That’s using your lawyer effectively and cost efficiently.

In the end over 95% of all suits are never litigated but are resolved. Most are not strategising this but are intending to litigate and end up resolving because the reality of time and money eventually sinks in. Few understand this and use it as a strategy, many walk away from the lawyers meeting and do nothing as they do not want to support a litigation strategy and have no alternative, they are told. A real litigation strategy is also far more expensive then our pretend strategy.

This strategy works very well and is how the system is meant to be played out. The point is, manage your lawyer, use him effectively and you can always pull the plug in advance of actual litigation if the strategy fails to produce the results you want. The important point is a lawyers letter gets the attention of your defendant, and if necessary the suit will bring him aboard.

Use the system to resolve issues but do not necessarily litigate…but definitely bluff. You will win most of the time, be prepared to settle and not get what you would have asked for and maybe gotten if you litigated and won, but its now and without the investment of time and money. Its a better conclusion, and most frequently the letter works. Call if you need help 413-549-2966.