In this economy, you may think twice before consulting an attorney to avoid fees. Sometimes thatís a good idea. Sometimes itís not and can cost you lots more in future litigation. Here are some basic guidelines relating to two important issues Ė contracts and insurance - to help decide when to use an attorney and how to use them efficiently. Contracts.
A good contract is basis for any smooth business relationship. Contracts are essential. Not only do they clarify roles, responsibilities and ownership issues, they limit potential liability. Attorneys can help you draw up a contract that covers all your bases, but if you want to use your attorney efficiently, do some homework first.
Sit down and in your own words define relationship youíre setting up and describe those who youíre setting it up with. Anticipate industry-specific issues that affect your risks and liabilities in contract. Point out best and worst-case scenarios that affect success of your product and how that will affect contracted parties. Address ownership issues. Now set up a meeting with your lawyer.
You may think that signing a contract is a simple proposition. Just read what it says. Wrong! Itís not only what a contract says, but rather what it doesnít say that matters. A contract can be deliberately written to be ambiguous and open to various interpretations, which are not always in your favor. Often, you are so personally involved in contract negotiations Ė agreeing to amendments, changing clauses day by day Ė that you feel that after all discussion, it MUST be right. Before you sign, have an attorney look at it. What you gain from an objective eye is far greater than what you pay in fees.
You can add protective steps to your contracts, which may help in cases that lead to litigation. Include a provision in contracts that states that if you need to sue, legal fees are recoverable for non-performance or payment. You will probably have to include a reciprocal clause for other party. You could also include a dispute resolution clause that specifies use of binding arbitration. You can even specify a mutually agreed upon arbitrator in advance.