When to Hire a Lawyer

The old adage “an ounce of preparation is better than a pound of correction” is especially true when it comes to legal issues. People hate hiring lawyers, and for good reason: we are expensive. What people fail to realize, however, is that hiring a lawyer early can save substantial amounts of legal fees.

Business Law: The clearest example of preparation saving money is in the area of contract drafting. Every experienced businessperson thinks they can draft a contract with the best. In order to save around a thousand dollars to have an attorney draft the contract, many people attempt to draft the contract themselves. Unfortunately, because the person does not have the training and ability to find out what a court will do with certain language in the contract, language is often added that will not stand up in court, or certain possible outcomes are not handled. Unfortunately, leaving out what happens after the death of a party to the contract or many other possibilities that most people do not think about (but that lawyers see litigated often) often results in the need to litigate. Litigation is expensive! Contract litigation frequently costs well over $100,000 in legal fees for each party in the contract dispute. If the person had hired an attorney who knows the many issues that create much litigation and had spent $1,500 or $2,000 on getting a professional contract drafted up, the person could have avoided the $100,000 litigation bill when the unforseen possibility happens.

At the very least, you should hire an attorney to review the contract you drafted. Contract review is not too expensive, and we offer a flat per-page rate (see our legal fees page for details). By hiring an attorney to review a contract you drafted, you will get a professional opinion on issues seen in the contract and suggestions on how to better it.

Hiring a lawyer to form your business will save you money because the lawyer will think about things and draft the partnership or company agreements around issues you have not probably considered: when and how the business will dissolve; how it will dissolve; how losses will be divided; and many more.

Granted, lawyers will not always see all of the possibilities or ways that a situation could go awry, but attorneys have seen many that most people will not think of. And, if worst comes to worst, you always have someone you can go back to and ask “why didn’t you think of this?” Hopefully the attorney will help you resolve the issue at a lower cost than if that attorney had not drafted the contract in the first place.

Family Law: Another area where preparation can save a substantial amount of money is family law. Divorces are expensive eat up tons of money from all parties. Also, because Texas and many other states utilize “Community Property” rules, where your income while married belongs to the community estate, if you get a divorce, you could lose many assets that you thought belonged to you. Most people realize that they could lose their home or car to an ex-spouse, but are surprised when they lose their pension or retirement accounts to their ex-spouse. A prenuptial agreement or postnuptial agreement can save this from happening. Here again, a little preparation can save a substantial amount on the back-end. Many people realize the value of having a prenuptial, but decide to do it themselves. Unfortunately, prenuptial and postnuptial agreements are strictly construed, and if the procedures to properly enter into them are not strictly followed, the prenuptial becomes worthless. Prenups and Postnups should be done right, and for around one thousand dollars now, you save losing a substantial amount of money later.

Again, in family law lawyers will not always see all of the possibilities or ways that a situation could go awry, but attorneys have seen many that most people will not think of or include in their form prenups. For example, what if you and your current spouse get divorced and then remarry after a time — what happens to the prenup? A prenup drafted by an attorney can properly deal with this situation.

If worst comes to worst, you always have someone you can go back to and ask “why didn’t you think of this?” Hopefully the attorney will help you resolve the issue at a lower cost than if that attorney had not drafted the contract in the first place.

Personal Injury Law: most people are not experienced negotiators. Insurance adjusters negotiate all day, every day. When you are involved in an accident or are injured, you will likely be dealing with someone who knows exactly what to say and how to say it. The insurance company will take your words and twist them to the insurance company’s benefit.

Having a lawyer in a personal injury situation can make or break your case. When you hire an attorney, you are hiring someone who spends much of their time negotiating, just like the adjusters they are negotiating with. An attorney also becomes your shield: once you hire an attorney, the opposing insurance company cannot speak with you directly any further. Because of this, there is no more opportunity for them to twist your words and use them against you.

Finally, an attorney who is experienced dealing with injuries will be more able to properly value your case. According to a Consumer Panel Survey of Auto Accident Victims done in 1999, injured victims received an average of 40% more money when hiring an attorney to represent them when compared to representing themselves. (“Paying for Auto Injuries: A Consumer Panel Survey of Auto Accident Victims,” Insurance Research Council, 1999, pg. 45-52).

The Moral of the Story: in the end, hiring an attorney early on in the process of any endeavor is almost always a good idea. Certainly, hiring a lawyer is virtually always better than attempting to do-it-yourself. You save money by hiring a lawyer to draft a contract or form a business because you will not as likely need to spend hundreds of thousands of dollars defending your contract in court or dealing with dissolution issues that could have been addressed in the formation documents. You save money by hiring a lawyer to handle your prenuptial agreement because it will most likely hold up in court. You save money by hiring an attorney to handle your personal injury case early on, because you get the benefits of having a shield between you and the insurance company, and the attorney will be a more experienced negotiator in your situation.

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