Why a Lawyer May be a Waste of Money: Top 3 Questions to Ask Yourself to Figure Out if You Really Need a Lawyer
/It might be empowering to yell at your adversaries: "Tell it to my lawyer!" or "You'll be hearing from my lawyer!" or best of all: "My lawyer's more expensive than your lawyer!" (yes, I've actually had someone say this in my presence). But the reality is not everyone needs a lawyer.
There are many life events where lawyers simply don't add any value, or risk destroying value, or the cost of a lawyer outweighs the value of the thing in question. Many minor (and even some major) interpersonal disputes are only worsened by the early involvement of lawyers. Positions harden. Direct communication is no longer possible. Total victory at all costs becomes the sole goal. And the financial cost of that total victory quickly outstrips the objective value of the thing being fought over.
Resolving neighbour disputes, family disputes, or workplace disputes are often best accomplished without the initial involvement of lawyers. But - and this is a big BUT - if you're then planning to commit compromises you’ve worked out to paper in a binding legal contract for all time kind of way, you should definitely be thinking about a lawyer to tidy things up.
Lawyers involved in the middle of messy disputes can get expensive, because of all the time involved cleaning up the mess. While if you’ve already consigned your mess to the trash, lawyers are relatively affordable garbage people to take out that trash.
By contrast, when your goal is to create a legally binding promise where there currently is no dispute, you want a lawyer involved from the get go. You’ll find good value in having a lawyer sort out from the start your real estate transaction, will or power of attorney, or corporate-commerical business deal. Don’t involve a lawyer early, the parties later have a falling out, and you’re likely to wind up with exactly the kind of mess we were just talking about when lawyer involvement gets expensive. The early lawyer involvement creates legal certainty, thus minimizing later legal disputes.
Occasionally you will have a significant life problem, but it won’t be a legal problem with a legal solution. You might simply not get on with your neighbour, or your coworker, or your spouse. A lawyer can’t fix all human relationship problems. The lawyer can only set down in writing any fixes you have worked out that might be legally enforceable (permission for the neighbour to walk across your land, agreement of the co-worker to work different hours, agreement of the spouse through a marriage contract as to how assets will be split upon dissolution), or force a legal solution where the issues are justiciable (meaning a court can make a decision on them): stop the neighbour from trespassing on your land, but not stop the neighbour from being nasty to you; stop the co-worker from harassing you, but not stop the co-worker from working in the same building; decide how the marital property should be split, but not stop the marraige from breaking up.
Really lawyers are best employed when: (1) you have an important informal agreement - real estate or business sale or family separation - that you need reduced to a binding contract that can later be enforced; (2) you’ve attempted but failed to reach an informal agreement - dissolution of business partnership or land co-ownership or marriage - and now need to force the issue through lawyer-facilitated negotiation and possibly court action; (3) you need to create future legal certainty about property, yourself, your business or your family, such as through drafting a will, power of attorney, domestic contract, or incorporation of a company; (4) you are dealing with the government on issues of great importance to your future - immigration & citizenship, tax assessments, responding to criminal or regulatory charges, asserting indigenous or environmental rights - where the price of failure is high; (5) the law requires you to have a lawyer.
There are three prime questions to ask yourself in determining whether you need a lawyer.
1. What Are the Likely Lawyer Fees as Compared to the Price of Failure?
Some things like child custody or personal freedom in staying out of jail may be priceless. Others like immigrating or obtaining citizenship in the country of your dreams, or saving hundreds of thousands of dollars on your tax bill, may have a huge personal value. Getting compensated for the tree your neighbour accidentally cut down on your property might have a lower value.
A cost-benefit analysis is important to any decision to hire a lawyer. There are lawyers out there who don’t like to talk money. But really that is the key driver for many of our decisions in life. Deciding to hire a lawyer means giving up other things, so what you’re getting better be worth it.
So ask about fees up front. The lawyer might fairly tell you, “oh, that needs to be hourly.” And you then might be a bit put off by what seems like a high hourly fee. But if the work only takes a couple of hours, the fees could be less than that last major plumbing problem you had at home.
Ideally, you’ll be quoted a block fee. Some work can be predicted pretty closely as to effort, like appeals or drafting wills. Whereas other work will be dependent on the unpredictable actions of the opposing party, like family law: the other side consenting to what is being sought will be relatively inexpensive, whereas fighting you at every step will lead to significant expense.
Generally fees for dealing with government - like on immigration applications or criminal charges - will be lower and more certain because government responds in relatively predictable ways. Fees for dealing with private parties - like in family court or for commercial disputes - will be higher and less certain because those parties will be unpredictable (they might fight a lot or not at all). Fees where there is no dispute at all (real estate transfer, incorporation, will drafting) will be lowest of all.
2. Will Not Hiring a Lawyer Early Lead to Higher Legal Fees Later?
Doing your own immigration or citizenship application, fighting by yourself with the Canada Revenue Agency, or drafting up your own family separation agreement may all seem initially like a good budget idea. You might be strapped for cash, and understably need to prioritize expenses. So you figure you’re more than capable of filling out a few forms, or writing a few letters, or drafting up a domestic contract.
And until you get that immigration rejection letter, or tax reassessment for $100,000, or wind up in a nasty family court fight, the DIY route might seem sensible. But the problem is you won’t be able to assess whether it was really a good idea until it’s too late. And at that point you could be forced to hire a lawyer to seek a judicial review for the rejection, go to Tax Court to appeal the assessment, or go to Family Court to enforce a skimpy settlement agreement, all at far, far greater cost than would have been the case to originally hire a lawyer to fill out that application, negotiate with the government, or commit your informal family settlement to writing in a binding way that will stand up in court.
Not every government or family interaction justifies a lawyer. So you’ll need to carefully weigh the price of failure on a case by case basis compared to the early and later legal cost.
3. Does the Law Require Me to Have a Lawyer?
Sometimes you have no choice but to hire a lawyer, because the politicians in drafting the laws have decided to require it. These situations are rare. Transferring real estate from one party to another in Ontario is one example of non-litigious solicitor-work where lawyers are mandatory. Civilly suing or being sued in Ontario's Superior Courts or the Federal Court under the name of a Corporation is another example (unless you bring a motion before the court for self-representation). The theory seems to be that if you have enough money to be buying or selling real estate, or to have a corporation, you have enough money to hire a lawyer.
In all other legal situations, lawyers are optional. Traffic court. Small claims. Last will and testament. You need to weigh in each case, what is success worth to you? If you’re fighting over a $150 dollar traffic ticket, and the sole price of losing is $150, then a lawyer probably won’t be worth it. If you’ve unfortunately already racked up a few demerit points, and losing means forfeiting your driver’s licence, then probably a lawyer is worth it.
Gordon S. Campbell is the Managing Lawyer of Aubry Campbell MacLean. Learn more at www.acmlawfirm.ca.