Posted by Michael Pine on October 07, 2003 at 24:28:19:
Hank,
Thanks for a great article that illustrates the point perfectly.
Why Spend All This $ on Lawyers??? - Posted by Nick O
Posted by Nick O on October 06, 2003 at 21:50:41:
First off I know this post is probably going to get some negative feedback and trust me I believe there is a time when you do need to spend money on a good attorney especially with contracts. But I was reading a post earlier on a guy who is getting screwed on a L/O and took all the necessary steps to protect it. Obviously if the deal is going to reap you huge profits than spend the cash but if it?s a smaller deal why not just do your homework and represent yourself. You have can read the same books as an attorney and from my experience as a small business owner the judge will feel for you as long as you don?t act like a know it all and be respectful? Just my opinion.
Nick O
Re: Why Spend All This $ on Lawyers??? - Posted by Frank Chin
Posted by Frank Chin on October 08, 2003 at 08:06:26:
Nick:
You started a good discussion here, and I’ll add my take.
I agree that Lawyers are used in instances where they shouldn’t and visa versa. Not all lawyers are knowlegable in various areas of law, and often cut themselves a “narrow niche”, and does his business in a “cookie cutter” fashion.
RE closings is one good example. Many shun creative methods as it’ll take them into unfamilier territory. I asked one if he know about 1031 exchanges, and talked like he knew it backwards and forwards. Then, when I had the signed contract, and needed a recommendation on an intermediary, his tone went too “oh, You’re really going to do that?”
Fortunately, I did some research on the net, spoke to a few intermediaries, and I straight out told this attorney "look, they’ll send me a package of forms, and all you have to do is call the number during the closing, and someone will walk you thru the forms. There’s a boiler plate addendum to add to the P&S contract. Its very simple - and its NOT MUCH WORK for you.
Seems like I hit the right button as he’s not into doing a lot of work.
I happened to chat with a business owner of a business next to mine about buying commercial properties in the area. He started his rant about lawyers.
Said he found a good deal some 15 years ago, and made an offer. After the offer, and before going to contract, the seller got a higher offer, and asked him to match it, and the seller will just add it into the seller financing, without him putting any more down. He said his attorney told him to turn it down as the seller is “just holding him up for more”.
He said he’s sorry ever since as rents had gone higher and higher. Had he taken the seller financing offer, his monthly mortgage is just $300.00 higher - one time only. His rent increase is now $300/month every year, year after year.
So I came to some conclusions:
1- If your’re in business, belong to a trade association, and if you’re an REI, join a local RE group. You get a wide view of your business, and know about issues that a “niche” lawyer will never know.
For instance, I bought a Auto Repair and Tire Wholesale" place. Decided to join the trade association. The rep came and told me about new Federal, State, Local laws that applies, and what I have to do to conform. For instance, I didn’t know about the local “Right to Know” law where I had to annual filing on “hazardous materials” located at the business.
2- Decide what decision is a business decsision and which is a legal decsion. My next door businss owner allowed the attorney to make a business decsion for him rather than a legal one. He offered below FMV, and someone else offered FMV where he was asked to match. Its not a decision his attorney should make.
3- If you’re in business and have more complex issues, use a law firm that has partners in various disciplines, and be be ready to pay the higher rate that such a firm commands to carry its overhead. Many niche attornies I notice work in one man shops, and is probably to busy shuffling papers to be of much help to you. They deal in volume, and any “silly questions” you have will simply slow them down.
Fortunately, I use a financial planner, and she introduced me to a medium size law firm, and I got an hours free consultation on what this “mutli-diciplined” law firm can do. One advantage I have going this route is the law firm understands that someone coming thru a financial planner is a “serious” customer, rather than someone that needs an hour to talk.
Frank Chin
Re: Why Spend All This $ on Lawyers??? - Posted by steve
Posted by steve on October 07, 2003 at 20:02:03:
A question everyone in any kind of business has asked. Heres my 2 cents. Over the years as a business owner I’ve run into situations in which most would say “hire a lawyer”
Remember the reply from the lawyer about his partner and why he hired him? “scared s**tless” An attorney makes money off of the clients fear-the unknown. first pointing out what could happen and then charging you to make sure it doesn’t. They point out ALL the possible ways a deal could go wrong and then quote a price to protect you from them.
For some people, the price is well worth it. If you lie awake at night worrying about all the contingencies, then it may very well be worth the money.
One example -I had a friend that did just hire an attorney for a particular situation because “thats how its done”. I advised against and told why but they hired her anyway-and she was an “expert” in this area. But after several months and thousands of dollars the problem wasn’t solved. I looked at the law and recommended a solution (and anyone can do that) The problem was solved But the money was gone. I have never lost money or had trouble because I didn’t hire a lawyer. But some have. And if you want some stories, ask a lawyer. As far as pro-se being something that influences judges against you, thats silly (and illegal) So if you’re legally in the right a judge will rule against you cause you didn’t hire an attorney? If a judge decides against you because your pro-se even though your legally right, he’ll have a big problem. And anyone (even an attorney!) who suspects such a thing should take some action. In reality, its hard to prove. If a judge was an attorney (and many are) he may have a prejudice against pro-se. If you suspect it, call him on it (I have) And just make sure you’re legal ducks are in a row.
I can tell you it takes time and diligence to do the proper research etc. in handling a matter that an attorney normally would. Your time may be more valuable than what it would cost to hire a lawyer. And as I’m sure you know, any attorney will use the quote “you’re a fool”, etc and then relate some horror stories implying “this could be you” But don’t be too hard on them. They aren’t deceiving you, it’s how they are trained. While it is true that they value their expertise more highly than the general public, its still their job to represent you effectively. And they get to decide what that is worth/we get to decide if we’ll pay it.
I know horror stories on the opposite side. Attorneys that bill hours while their at a movie or driving while thinking about a clients case. But I don’t think thats the norm. Most are honest at least with what they think is right and do the job they are hired to do effectively.
Can you do as good a job? Absolutely-probably better since your self interest is a big motivation. But know that you have to dig and dig and use lots of resources and even then could miss something (lawyers do) I would advice you to try to do it on something small and then call around and see if you can get a legal opinion on your finished work (attorneys don’t like this but so what)
Then assess your position on each and every legal issue you come accross. I have chosen to do this simply because I think I am better at looking out for my interests than a lawyer who has Xteen other cases he’s working on. I definitely do not recommend my approach to most people. I just happen to like that kind of research. For many people, a lawyer is well worth the money. But you can do it yourself!
Good Luck!
Steve M
DKDK will bite you in the *ss!! - Posted by William Bronchick
Posted by William Bronchick on October 07, 2003 at 09:27:31:
There’s what you know.
There’s what you don’t know, in which case you might see a lawyer.
Then, there’s what DIDN’T KNOW THAT YOU DIDN’T KNOW (“DKDK”) that swims up and bites you in the *ss. You don’t need a lawyer holding your hand on every transactions, nor do you need a lawyer to draft every document, once you learn how to properly fill it out. But a lawyer is trained to see legal issues that you aren’t even aware of.
Case in point: client comes to me with documents prepared from a guru course. This guru in question is a very smart man and has some excellent material. However, there was a particular thing in the document that was not appropriate for Colorado law. Left unchecked, this could have cost him thousaands of dollars in legal bills later on. And, he “DKDK” the issue.
“Obviously if the deal is going to reap you huge profits than spend the cash but if it?s a smaller deal why not just do your homework and represent yourself.”
This is flawed thinking… small problems become BIG problems not because of the money involved but because of the potential problems. If you give the seller $1 and take a deed to a property with a title flaw that you “DKDK”, what happens 10 years later? It’s not the money involved in the deal, but the DKDK that comes back to bite you. I have an associate attorney in my office that handles closings. His attitude (which is why I hired him to handle the closings) is “if you’re not scared sh*tless every day you do this business, you’re probably missing something.” Amen to that… there’s so many things that can go wrong that only a fool would think they can do it all without an atty.
“You have can read the same books as an attorney and from my experience as a small business owner the judge will feel for you as long as you don?t act like a know it all and be respectful? Just my opinion.”
The judge will feel for you? I don’t think so. The judge feels for a single mother being evicted on XMAS. The judge looks at business owners who represent themselves annoyances. Judges hate pro-se litigants.
I Agree - Posted by John Katitus
Posted by John Katitus on October 07, 2003 at 02:34:41:
I have been to lawyers twice for help - neither knew anything about what I needed - so I ended up doing it myself. If the question was: Given a reasonable, good, knowledgeable real estate lawyer, should you pay him or do it yourself? Then I would say if you can afford it or have any questions about what needs done, pay. But where do you find that lawyer?
Given a few good courses, a computer, and forums like this to resolve your uncertainties, and if you are a skilled person with very good attention to detail, you can do it yourself. This pertains to Trust Documents, etc. Something like a deed that gets recorded and is easily and straightforwardly prepared by a Title Company, maybe you want to pay $50 or $100. I think you have to judge your own abilities. But walk into 99.99% of lawyers offices and ask them to prepare a Land Trust package and they won’t know what you are talking about.
Re: Why Spend All This $ on Lawyers??? - Posted by Hank FL
Posted by Hank FL on October 06, 2003 at 22:12:51:
I second that. Outstanding post! nt. - Posted by randyOH
Posted by randyOH on October 07, 2003 at 22:39:15:
nt
Re: DKDK will bite you in the *ss!! - Posted by Nick O
Posted by Nick O on October 07, 2003 at 16:21:04:
Like I said in my post… I think you should pay a lawyer to go over your contracts and paperwork. But when it comes to a situation that could be lengthy and expensive, unless you have an attorney as good as Mr. Bronchick I would try to see if I could handle this myself. From my experience with me having a written contract and the other party not following through on there part the judge has always ruled in my favor with out using an attorney. Thanks for the feedback!
Nick O