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When
do you need an Attorney- Lawyers and Construction...
Are they just an extra expense or do you really
need them?
First, are you a proactive
problem solver? Or a reactive
problem solver? You decide. It does make significant difference
on what type of legal strategy is needed for each approach to
handling problems.
To expand on this; when would
you consult with an attorney?
A.
Before you sign a contract?
or
B. After you have project or pay problems?
or
C. Never
A. Before
you sign a contract? The best time to get your
attorney involved is before you sign the contract – and
well before you start the project. It’s as simple as that,
and in the long run, it will probably be an inexpensive investment.
All too often you are forced to sign a contract at the last minute
so you can start work – and little time or thought is given
for negotiating the oppressive provisions. You may end up agreeing
to the terms just to get started – or worse – just
so that you can get your first progress payment. You are being
proactive and are able to anticipate problems before they actually
become problems. This is all pretty simple and does not require
very much attorney time doing damage control or preparing for
any battles.
B. After you have problems?
Take care of problems only when they become problems. After all,
you don't want to spend any money until you need to. You are being
reactive.
You know you are having problems when any
of the following start to occur:
o You are not getting any cooperation
o The project is behind schedule and they say it is your fault
o The scope of work has changed
o The plans are inadequate.
o There seems to be a communication breakdown
o Everything seems to be going wrong, and
o The project is starting to cost you a lot of money
o You aren’t getting paid
C. Never
If you have never required the services of a legal advisor, consider
yourself very lucky. The longer you are involved in the construction
industry, the greater the chances are that someday you will need
a good construction attorney. When you do need one, give us a
call.
Can you avoid
bringing in the legal muscle? Often, it is not
a matter of if, but a matter of when, that
you will encounter a serious construction dispute that requires
the assistance of an attorney. Many times, the problems you encounter
during construction could have been anticipated or avoided if
you had a good construction attorney help you negotiate a fair
contract before any work was commenced. If you find yourself in
this situation, it is much costlier to recover, and it is extremely
important that your lawyer has an in-depth understanding of your
situation, and the project environment in general. It is too late
to cut corners on an inexperienced legal advisor at this point.
Even if you find yourself in a difficult position, instead of
working without pay and carrying the brunt of the project costs,
an experienced construction attorney can advise you of the best
way to assert your rights.
There are some aspects of construction
that require legal expertise to get the job done. Even though
it is not a requirement to have an attorney, our legal system
makes it nearly impossible to handle all legal matters without
the help of attorney – why take the risk without one? Unless
you are absolutely sure you know every aspect of the law and how
every clause of the contract documents will affect you, you are
probably being penny wise and pound foolish by not seeking advice
from a competent attorney.
Even if you have a strong aversion to “getting
the lawyers involved”, you still may have to use the courts
to assert or defend your rights. Some construction decisions that
require filing a lawsuit are
• Timely foreclosing on mechanics’ liens (this is
not the same as filing a mechanics’ lien)
• Expunging a false lien
• Enforcement of a stop notice
• Challenging the validity of a stop notice
• Challenging a bid protest decision for public works projects
What benefit does an attorney really
provide on a construction project?
During any project there may be times where some of the terms
and conditions are not clear or did not anticipate a particular
event. Early on in the process such as during contract negotiations
a good attorney can be an invaluable tool. The attorney will be
your communicator to clear up misunderstandings and protect your
interests. Calling in the attorneys as a last ditch attempt to
salvage a bad situation will probably only inflame the situation
and make cooperation more difficult. Use attorneys to help prevent
the project from going bad in the first place. If the other project
contractors or subcontractors know you have your attorney monitoring
(or believing that your attorney is monitoring) the progress,
there may be less chance that you will be abused when it comes
to late payments or unwarranted blame for problems.
What kind of advice should you
expect from your construction attorney?
As a bare minimum, your attorney should be able to give you advice
for the following situations:
• Before you sign a contract, and
• After you have problems
• Potential impact any actions may
have on your business
The type of advice for each situation will
be vastly different, and will require a different type of legal
analysis. To better understand why this important, read on.
Before you sign
a contract
•Keep it Profitable-Always
keep in mind that you are in the construction industry to be a successful
(profitable) business, and decisions should always be based on this.
Just because you may have a legal right to something does not always
mean that is your best business option. You may spend more money
trying to prove a point rather than making a prudent business decision.
Your attorney should be able to present the pros and cons of all
options.
•Identifying Risk-
First and foremost, a construction attorney should be able to
identify the areas where you have an exposure to risk. What does
this really mean? In any project, there is risk, both financial
risk and physical risk. What we are primarily concerned with is
financial risk, or in simpler terms, where do you run the chance
of losing money on the project, and how much of the project are
you going to be responsible for if things go wrong?
•Unfair Contracts-Terms and
conditions that are oppressive, unrealistic or impossible
to enforce. You need to be able to spot these immediately. No
contract is perfect for both sides, but terms and conditions should
be ones that both sides can live with. Some terms may actually
be in violation of State laws. If you don’t know which ones
they are, then your attorney should be able to point them out
and get them eliminated from the contract.
•Managing Risk-
Sometimes, it just isn’t possible to eliminate the “unfair”
terms and conditions, and in order to get the work, you must be
willing to accept a certain amount of risk (usually disproportionate
amount of the project liability). Your attorney should be able
to identify these areas, and provide a plan for protecting your
position and managing the increased liability. Risk that you have
not control over is the most dangerous.
Some examples of risks that are NOT within
your control:
Differing site conditions
Delays by others
Interference by other trades
Design deficiencies
Timely payments from owner or GC
After you have problems
Once the project starts to take a turn for the worse, you need to
prepare for a legal battle. Even if it is not your fault, you must
do everything with the expectation of either being sued, or having
to file suit in order to resolve problems. You must have proper
documentation, you must follow proper procedures and create and
keep evidence of all activities related to the project. You cannot
have too much supporting documentation. Ideally, you should be doing
this from the beginning of the project (and keep it up throughout
the course of the project), but this needs to be done well in advance
of any potential legal action. Your attorney will know what steps
you need to take at this stage.
•Understanding the construction
process-an attorney that knows legal procedure may not
know anything about construction. How does this hurt you? This
is very important to your survival.
•Knowledge of construction.
Well, first off, you shouldn’t be paying your attorney while
educating them on how the construction business operates. A good
construction attorney should already know how a construction project
evolves from beginning to end and all that can happen before,
in the middle, and at completion.
•Ask the right questions. To be effective,
a good construction attorney will know what questions to ask to
get the most information. This is extremely important once a lawsuit
is pending. What the attorney doesn’t know to ask can hurt
you in the long run, but it may be too late.
•Scope of Work. If your attorney does not
really have a grasp of the scope of work you contracted for, or
what constitutes a material change, he cannot effectively defend
your position in the dispute. The attorney needs to really understand
how each party from the architect down to the material suppliers
all interact.
•Project Schedule. Critical path delays,
concurrent delays or even float; if your attorney does not analyze
the project schedule, or more importantly, if he does not analyze
changes to the project schedule properly, valuable information
could go unused.
•Contract terms and conditions. Understanding
the contract. As simple as this should be for an attorney, having
a clear understanding of the interrelationships between the parties,
the risks, the expectations and the procedures can be daunting
even for an experienced attorney. Don't take it for granted that
an attorney really knows the terms.
Business Advice
•Is taking on the project
a good business decision?- There is no point in entering
into a contract that may restrict your ability to take on additional
work, or overextend your bonding ability or credit status. If
the requirements of the project cripple your ability to go after
new business, it probably isn’t a good business decision.
•Use your own contracts-
If at all possible try to use your own contracts. This way your
attorney will have drafted a contract that will be in your favor,
and the terms and conditions will be completely under your control.
Unless you are the developer, you may not have this luxury. AIA
and AGC contracts will serve as a good starting point, but are
not always the best option for you.
If you have read this far, you obviously
realize that there are some distinct advantages to getting an
attorney on-board for construction matters. If the additional
cost is your only objection, you should carefully re-evaluate
your understanding of the risk you are about to expose yourself
to if you sign a contract.
Back to the original question: When should
you consult with an attorney?
A. Get an attorney involved early.
before you sign any contracts, your "investment" in
attorney fees will be minimal. This is actually the least expensive
way to manage a project. This is a smart business decision.
B. Get an attorney involved after
you have problems . Your project and working relationships
have gone downhill and you are just trying to salvage a potentially
bad situation. You will probably end up paying more in attorney
fees than you would have if you were proactive and got an attorney
involved early. You may possibly end up paying more for the project
than you anticipated, cutting into your profit, or worse, going
into the red. You are now putting out fires and doing damage control.
All is not lost though, a good construction law firm that knows
what they are doing may be able to do an outstanding job of helping
you get what you are entitled to.
C. Never use an attorney.
This is the way things are supposed to be, but most of the time
it isn't within your power to prevent getting dragged into someone's
dispute. How many projects actually go to completion without any
problems at all? We are just being realistic, but if you have
been able to dodge the litigation bullet, congratulations.
How we can help by getting involved
early. We know that having an attorney involved in all
aspects of a construction project will vastly improve the chances
that the project will be successful. We therefore highly recommend
that you have a competent construction attorney review your contracts
before you are legally committed. This firm has negotiated construction
contracts in the realm of $150 million total cumulative value,
so we are very familiar with construction contracts.
How we help by getting involved
after you are having problems. Scholefield Associates,
is uniquely qualified to handle major and minor construction disputes,
ranging from strategic legal decisions, effective dispute resolution
(without resorting to a trial), to project delay and schedule
analyses. Our technical experience and training directly related
to construction allow us to work swiftly and efficiently. We can
confidently say that there are only a handful of law firms nationwide
that have licensed professional engineers, licensed general contractors
and experienced large industrial project managers on staff to
serve you. We know the law, we know construction and we can prove
it.
As a construction law firm, we know that
there some essential skills that are necessary to be effective
and efficient. These should not be mutually exclusive concepts.
Unfortunately, none of the skills that make a law firm effective
or efficient in construction are those that are taught in law
school. Skills like engineering, or project management have to
be taught or gained from actual experience. What we can handle
in-house, many other firms often have to hire outside experts
at your expense.
We pride ourselves on being able to handle
numerous support tasks in-house, such as high speed scanning,
document conversion and electronic Bates numbering. What is commonplace
at most firms is an electronic document management system. We
are not different in that we keep thousands of documents organized
and searchable at an instant. We also have portable high speed
scanners just for document acquisition. We have an all digital
in-house professional video editing facility, on-location video
production equipment, and on-location professional audio equipment.
We use the most current award winning trial presentation software
and have a high definition capable courtroom projector specifically
for this purpose. We also know how to use the equipment, and know
when the use of the equipment may be overkill or ineffective.
What does all this do for you? It helps you get results and it
saves you money. What does it do for us? It makes our job easier.
Lawyers and construction...are they just
an extra expense or do you really need them? If you do not choose
your firm wisely, they may be just that, an extra expense.
You decide.
Call our offices to discuss how we can
help you: 619-544-0086
To go to the homepage CLICK
HERE
Important Questions to Help You
Click on the question
to get some important answers
1. How do you
get paid without resorting mechanics' liens?
2. What are
killer contract clauses?
3. What
to ask an attorney to determine if they can help you?
4. What qualifications
and skills make a good construction law firm?
5. How do you
save money using an attorney?
To go to the homepage CLICK
HERE
We are...
Anything But
Typical
Call us now to discuss how you can benefit by
using a different approach to managing your legal needs.
619-544-0086
info@construction-laws.com
We are located at 501 W. Broadway, #1770, San
Diego CA 92101
   
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