• See the Problem, Solve the Problem
  • March 17, 2010
  • Law Firm: Jonathan B. Frank, P.C. - Bloomfield Hills Office
  •     As litigators, we are trained to see legal problems in a certain way.  We also are trained to see solutions to those problems through an "I win/you lose" prism.  Not that there's anything wrong with that, at least sometimes.  But if we can step back from our training for a minute, maybe we can see the problem differently.  And if we see the problem differently, maybe we can see a different solution.  And if we can see a different solution, we might end up with clients who will thank us for helping them out of a difficult situation, instead of grumbling (often rightfully so) about the cost and uncertainty inherent in the litigation process.
     
        What I'm suggesting is that we first try to determine the nature of the legal problem we're dealing with.  I have tried to categorize some of my cases, and I believe that if you do the same, you may find some of the same categories.  For example, it seems to me that there are four common types of business disputes.
     
        It's the principle of the thing: Sure, we hear this all the time, and sometimes clients really do mean it.  Mostly, these cases involve common and repeated issues that are central to the operation of a business, such as hiring and firing issues or trade secrets/confidentiality/intellectual property issues.  A client may want to create or enforce policy, no matter what the cost.  These cases are not usually susceptible to easy settlement, since the parties often have fundamentally different policy concerns.  An employer seeking to enforce a covenant not to compete, for example, will likely file a complaint and proceed at least through the preliminary injunction hearing.  At the same time, the employee does not usually have the luxury of reaching a settlement.  So off to Court we go, at least for now.
     
        Who screwed up?: These are cases involving performance deficiency, such as over promised goods or services ("blame the sales guys") or quality control problems ("blame the shop guys").  These cases often involve some objective criteria, often the subject of expert testimony.  While at first these cases are difficult to resolve, once all the relevant information is collected and analyzed, it is likely that reasonable business minds would conclude that a settlement is better than leaving a decision in the hands of a third party, whether that's a judge, jury or arbitrator.  Our job in these cases should be to collect and objectively evaluate all the truly relevant information (note that I did not say, "all the information that we can possibly collect in discovery"), keeping in mind that the legal principles governing the case are probably relatively simple.
     
        "They can't do that to me": These cases involve the crisis of misperceptions, such as many partnership/corporate disputes or cases involving contract ambiguity.  These cases involve a determination of the legal rights that will govern the parties' conduct, which are often at odds with the parties' expectations based on ethics, a sense of justice, or watching lawyer shows on TV.  Many times these cases move to the summary disposition stage before settling, but once the legal issues have been resolved (or counsel can give sound advice about the likelihood of prevailing), a resolution can be reached.  Our job in these cases is often to take a set of facts that may be agreed-upon and craft the best legal argument.  We must be on the lookout, however, for the compromise solution that can percolate up through the process as both sides come to appreciate the uncertainties of their respective positions, and often the fact that both sides may share some blame for the dispute.
     
        Finally, to be fair, there are cases where it's just about the money, such as valuation or collection cases.  The goal here is clear: get the most, or pay the least, and minimize the fees in doing so.  One party, usually the defendant, wants to hold the money as long as possible.  These cases get resolved when the leverage points (costs, time, aggravation, case evaluation, taxes due tomorrow) create opportunities for both sides to hesitantly accept a dollar figure that neither likes.
     
        To help us categorize the problem, we need to ask: why is there a dispute?  What's really going on?  Even though we're not necessarily trained to do this, it can be easier than it looks.  There are usually several, often overlapping explanations.  These include, but certainly are not limited to, the following:
    • Legitimate disagreement about principle/value
    • Misunderstanding earlier in relationship
    • Misperceptions
    • Misunderstanding of present legal rights
    • Dishonesty/deception
    • Revenge/retribution
    • Deterioration of relationship
    • Shifts in priorities
    • Someone's being taken advantage of
    • Someone screwed up
    • Someone's out of cash
     
        Next, we need to keep in mind some guiding principles of dispute resolution.  Believe it or not, people don't like conflict, and they usually prefer certainty and risk avoidance.  To get there, we need to identify their interests and understand what's really at stake.  Often, this means that we have to wait for tempers to cool.  Then, the truly relevant facts should be collected and put on the table.  Legal positions should be advanced and, if necessary, ruled upon.  At that point, if the reasons for the dispute can be understood, misperceptions can be overcome, and common ground can be found.  Perhaps we can start with small agreements, remain flexible, re-establish a relationship if one existed, and shoot for the "win/win," or at least the "not-lose-too-badly/not-lose-too-badly."
     
        Of course, this won't always work.  There are plenty of problems that can only be solved through third-party decision-making.  But despite what you may remember from law school or the early days of your practice, not all problems need to be solved that way.  Remember, our clients would usually prefer to manage the resolution of their conflict instead of leaving it in the hands of someone else.  So if you look hard enough, you'll probably find some cases you're currently handling that can be resolved using some form of the method described above.  And when you do, your clients may actually thank you.