“NOTICE!” YOU HAVE BEEN SUED.”

These are words none of us ever wants to see.  However, lawsuits are almost an inevitable cost of conducting business in today’s environment.  A recent statistic suggests that over 120,000 Nevada businesses were sued last year alone in Nevada Courts.  An old, but unfortunately true adage to keep in mind: “there are only two types of businesses … those that have been sued already and those that will be sued.”  While I am not sure the future is quite that bleak, all professionals should know what their options and responsibilities are once they have been served with a copy of a complaint.  More importantly, you should know what you can do to help avoid suits.

This article attempts to help give you an idea of the process of litigation and the options available should he find himself involved as a party to litigation.

Timing is Everything

All events in the beginning stage of a lawsuit are governed by strict rules requiring litigants to adhere to a timetable.  For instance, in Nevada’s state courts, a defendant^[1] has only 20 days within which to file an answer^[2] to the complaint.  Failure to answer within 20 days could result in the court entering judgment without even hearing the defendant’s side of the story.  Obviously, it is important to immediately seek the advice of an attorney.  If one waits until 19 days after being served with the lawsuit to obtain an attorney, the attorney’s ability to explore all options available before he must answer the complaint is hampered.^[3]  Therefore, you should immediately contact an attorney after you are served with a lawsuit.

Choosing an Attorney

Choosing the right attorney for your particular problem can be a difficult and time-consuming process.  This is perhaps the most important decision you will make concerning your suit — don’t make it lightly.  You should begin the process of choosing an attorney in the same way you would choose your family’s physician, CPA, or any other professional–talk to friends about their recommendations.  Further, no business owner should be able to say he doesn’t have an attorney.  Even if you only need estate planning (and all professionals should have an estate plan), you should form a relationship with an attorney now, rather than trying to find a good one after you are involved in litigation.

After you have obtained recommendations from friends, find out if the firm has been rated by Martindale-Hubbell, Super Lawyers, and Avvo.com, which are services which evaluate lawyers through a confidential and anonymous peer review system.

After you have narrowed the field through friends, family, and professional publications, interview your prospects.  Ask pointed questions to ascertain how much the litigation will cost, how long it will take, and the experience level of the attorney handling your litigation.^[4] Ask whether he bills you on quarter hour or tenth of an hour increment, and what his minimum billing increment is.  You should also ask how costs for items such as long distance telephone calls and facsimiles are billed.  Expect to be asked to provide your attorney with a retainer, the amount of which will vary depending on the complexity of the matter and the party/attorney on the other side of the matter.  See the author’s credentials here.

If dealing with a reputable attorney, you will be asked to sign a fee agreement.  Do not be insulted; attorneys simply practice what they teach their clients–to get all agreements in writing in order to avoid any conflict in the future. Carefully read the agreement. It will contain important information about how you will be charged, under what circumstances you or the attorney can terminate the relationship, and whether you will be charged interest for any unpaid balance on your account.

How to Save Attorney Fees

Now that you have chosen an attorney, how do you keep from giving him a blank check? In many ways, you will control the amount of fees.  Remember the famous saying attributed to Abraham Lincoln, “A lawyer’s time and advice are his stock in trade.” Every time you or anyone else calls or writes to your attorney, you will be charged for the time he takes to field the call or read the letter. You can save fees by following a few tips:

• Prepare a Detailed Chronology
• Organize Your Documents
• Prepare a List of all Witnesses
• Bring the Skeletons Out of the Closet
• Consider Saving up Questions and Concerns Before Calling Your Attorney
• Ask if There are Matters You Can Take Care of

Prepare a Detailed Chronology, complete with important dates, details of conversations, and correspondence between the parties.  Nobody is more familiar with the facts surrounding your case than you.  Your attorney may spend hours and hours reviewing documents trying to make heads or tails out of what happened, but you can save time and fees by taking a few moments to provide an outline of what happened and when.

Organize your documents in chronological order and flag those documents which are most important and which tell your side of the story.  If you want, you can highlight important sections of documents, or refer to them in your chronology.  Give your attorney all documents, even if you don’t think they will be helpful, because your attorney has an obligation to give the opposing party a copy of all documents which may be relevant.  I have had too many clients hold documents back, thinking they weren’t important, only to find out later (many times when it is too late) that the documents contain the proverbial “smoking gun.”  Don’t forget to include any notes or even doodles you created while talking on the phone with anyone involved in the suit.  Believe it or not, I was once involved in a lawsuit where the client’s doodles/notes he took while on a phone conversation with another party proved to be the most important piece of evidence at the trial.

Prepare a list of all witnesses.  List all people who have or could have knowledge about any portion of the lawsuit.  Provide their names, employers, positions, addresses, and phone numbers.  It is better to give more information to your attorney than less.  You may even want to give your attorney a short written narrative about what each person may know, may have witnessed, or told you about an event.

Bring the skeletons out of the closet.  If you have something to hide, assume somebody will find it, because they probably will.  You will only hurt your own cause and end up costing yourself more money when you try to keep damaging information away from your attorney. Armed with knowledge of your weakness, your attorney can fortify your position against an attack.  There is nothing worse to an attorney than being blind-sided at trial with information his client didn’t disclose because he thought nobody would ever find out.

Consider keeping a pad of paper on which to write ideas, questions, and concerns about your lawsuit.  When you have a few of them written down, call your attorney or set an appointment to see him.  Once you have his undivided attention, discuss all the matters on your list until you are satisfied.  If you don’t use this method, you may find yourself calling your attorney 4-5 times a day and you may be charged for 4-5 calls at the attorney’s minimum billing increment instead of for one conversation.

Ask if there are matters you or your staff can take care of many times a client can obtain information, run errands, or perform document gathering and organizing tasks which will advance the cause of the lawsuit and save himself money.   Don’t be afraid to tell your attorney that you are concerned about fees and want to handle some ministerial matters yourself

^[1] A person filing a suit is usually called the plaintiff, while the one being sued is called the defendant.

^[2] A formal response to each allegation contained in the complaint.

^[3] The male pronoun is used for ease and consistency throughout this article and is not meant to imply a preference for the male gender.

^[4] Unless performing services on a flat fee or contingency fee basis, no attorney can predict the exact cost of litigation during an initial consultation. The cost will vary depending upon the aggressiveness of the opposing party and its counsel, how many other parties are involved, how many motions are filed in the matter, how many witnessed need to be interviewed, the complexity of the facts, and the number of documents which will or could be used as evidence. Any quote will necessarily estimate the cost based upon known variables at the time of the consultation.