When do you need an Attorney- Lawyers and Construction...

Are they just an extra expense or do you really need them?

First, are you a proactive problem solver? Or a reactive problem solver? You decide. It does make significant difference on what type of legal strategy is needed for each approach to handling problems.

To expand on this; when would you consult with an attorney?

A. Before you sign a contract?
B. After you have project or pay problems?
C. Never


A. Before you sign a contract? The best time to get your attorney involved is before you sign the contract – and well before you start the project. It’s as simple as that, and in the long run, it will probably be an inexpensive investment. All too often you are forced to sign a contract at the last minute so you can start work – and little time or thought is given for negotiating the oppressive provisions. You may end up agreeing to the terms just to get started – or worse – just so that you can get your first progress payment. You are being proactive and are able to anticipate problems before they actually become problems. This is all pretty simple and does not require very much attorney time doing damage control or preparing for any battles.

B. After you have problems? Take care of problems only when they become problems. After all, you don't want to spend any money until you need to. You are being reactive.

You know you are having problems when any of the following start to occur:
o You are not getting any cooperation
o The project is behind schedule and they say it is your fault
o The scope of work has changed
o The plans are inadequate.
o There seems to be a communication breakdown
o Everything seems to be going wrong, and
o The project is starting to cost you a lot of money
o You aren’t getting paid

C. Never If you have never required the services of a legal advisor, consider yourself very lucky. The longer you are involved in the construction industry, the greater the chances are that someday you will need a good construction attorney. When you do need one, give us a call.

Can you avoid bringing in the legal muscle? Often, it is not a matter of if, but a matter of when, that you will encounter a serious construction dispute that requires the assistance of an attorney. Many times, the problems you encounter during construction could have been anticipated or avoided if you had a good construction attorney help you negotiate a fair contract before any work was commenced. If you find yourself in this situation, it is much costlier to recover, and it is extremely important that your lawyer has an in-depth understanding of your situation, and the project environment in general. It is too late to cut corners on an inexperienced legal advisor at this point. Even if you find yourself in a difficult position, instead of working without pay and carrying the brunt of the project costs, an experienced construction attorney can advise you of the best way to assert your rights.

There are some aspects of construction that require legal expertise to get the job done. Even though it is not a requirement to have an attorney, our legal system makes it nearly impossible to handle all legal matters without the help of attorney – why take the risk without one? Unless you are absolutely sure you know every aspect of the law and how every clause of the contract documents will affect you, you are probably being penny wise and pound foolish by not seeking advice from a competent attorney.

Even if you have a strong aversion to “getting the lawyers involved”, you still may have to use the courts to assert or defend your rights. Some construction decisions that require filing a lawsuit are
• Timely foreclosing on mechanics’ liens (this is not the same as filing a mechanics’ lien)
• Expunging a false lien
• Enforcement of a stop notice
• Challenging the validity of a stop notice
• Challenging a bid protest decision for public works projects

What benefit does an attorney really provide on a construction project? During any project there may be times where some of the terms and conditions are not clear or did not anticipate a particular event. Early on in the process such as during contract negotiations a good attorney can be an invaluable tool. The attorney will be your communicator to clear up misunderstandings and protect your interests. Calling in the attorneys as a last ditch attempt to salvage a bad situation will probably only inflame the situation and make cooperation more difficult. Use attorneys to help prevent the project from going bad in the first place. If the other project contractors or subcontractors know you have your attorney monitoring (or believing that your attorney is monitoring) the progress, there may be less chance that you will be abused when it comes to late payments or unwarranted blame for problems.

What kind of advice should you expect from your construction attorney?
As a bare minimum, your attorney should be able to give you advice for the following situations:

• Before you sign a contract, and
• After you have problems
• Potential impact any actions may have on your business

The type of advice for each situation will be vastly different, and will require a different type of legal analysis. To better understand why this important, read on.

Before you sign a contract

Keep it Profitable-Always keep in mind that you are in the construction industry to be a successful (profitable) business, and decisions should always be based on this. Just because you may have a legal right to something does not always mean that is your best business option. You may spend more money trying to prove a point rather than making a prudent business decision. Your attorney should be able to present the pros and cons of all options.

Identifying Risk- First and foremost, a construction attorney should be able to identify the areas where you have an exposure to risk. What does this really mean? In any project, there is risk, both financial risk and physical risk. What we are primarily concerned with is financial risk, or in simpler terms, where do you run the chance of losing money on the project, and how much of the project are you going to be responsible for if things go wrong?

Unfair Contracts-Terms and conditions that are oppressive, unrealistic or impossible to enforce. You need to be able to spot these immediately. No contract is perfect for both sides, but terms and conditions should be ones that both sides can live with. Some terms may actually be in violation of State laws. If you don’t know which ones they are, then your attorney should be able to point them out and get them eliminated from the contract.

Managing Risk- Sometimes, it just isn’t possible to eliminate the “unfair” terms and conditions, and in order to get the work, you must be willing to accept a certain amount of risk (usually disproportionate amount of the project liability). Your attorney should be able to identify these areas, and provide a plan for protecting your position and managing the increased liability. Risk that you have not control over is the most dangerous.

Some examples of risks that are NOT within your control:
Differing site conditions
Delays by others
Interference by other trades
Design deficiencies
Timely payments from owner or GC

After you have problems

Once the project starts to take a turn for the worse, you need to prepare for a legal battle. Even if it is not your fault, you must do everything with the expectation of either being sued, or having to file suit in order to resolve problems. You must have proper documentation, you must follow proper procedures and create and keep evidence of all activities related to the project. You cannot have too much supporting documentation. Ideally, you should be doing this from the beginning of the project (and keep it up throughout the course of the project), but this needs to be done well in advance of any potential legal action. Your attorney will know what steps you need to take at this stage.

Understanding the construction process-an attorney that knows legal procedure may not know anything about construction. How does this hurt you? This is very important to your survival.

Knowledge of construction. Well, first off, you shouldn’t be paying your attorney while educating them on how the construction business operates. A good construction attorney should already know how a construction project evolves from beginning to end and all that can happen before, in the middle, and at completion.
Ask the right questions. To be effective, a good construction attorney will know what questions to ask to get the most information. This is extremely important once a lawsuit is pending. What the attorney doesn’t know to ask can hurt you in the long run, but it may be too late.
Scope of Work. If your attorney does not really have a grasp of the scope of work you contracted for, or what constitutes a material change, he cannot effectively defend your position in the dispute. The attorney needs to really understand how each party from the architect down to the material suppliers all interact.
Project Schedule. Critical path delays, concurrent delays or even float; if your attorney does not analyze the project schedule, or more importantly, if he does not analyze changes to the project schedule properly, valuable information could go unused.
Contract terms and conditions. Understanding the contract. As simple as this should be for an attorney, having a clear understanding of the interrelationships between the parties, the risks, the expectations and the procedures can be daunting even for an experienced attorney. Don't take it for granted that an attorney really knows the terms.

Business Advice

Is taking on the project a good business decision?- There is no point in entering into a contract that may restrict your ability to take on additional work, or overextend your bonding ability or credit status. If the requirements of the project cripple your ability to go after new business, it probably isn’t a good business decision.

Use your own contracts- If at all possible try to use your own contracts. This way your attorney will have drafted a contract that will be in your favor, and the terms and conditions will be completely under your control. Unless you are the developer, you may not have this luxury. AIA and AGC contracts will serve as a good starting point, but are not always the best option for you.

If you have read this far, you obviously realize that there are some distinct advantages to getting an attorney on-board for construction matters. If the additional cost is your only objection, you should carefully re-evaluate your understanding of the risk you are about to expose yourself to if you sign a contract.

Back to the original question: When should you consult with an attorney?

A. Get an attorney involved early. before you sign any contracts, your "investment" in attorney fees will be minimal. This is actually the least expensive way to manage a project. This is a smart business decision.

B. Get an attorney involved after you have problems . Your project and working relationships have gone downhill and you are just trying to salvage a potentially bad situation. You will probably end up paying more in attorney fees than you would have if you were proactive and got an attorney involved early. You may possibly end up paying more for the project than you anticipated, cutting into your profit, or worse, going into the red. You are now putting out fires and doing damage control. All is not lost though, a good construction law firm that knows what they are doing may be able to do an outstanding job of helping you get what you are entitled to.

C. Never use an attorney. This is the way things are supposed to be, but most of the time it isn't within your power to prevent getting dragged into someone's dispute. How many projects actually go to completion without any problems at all? We are just being realistic, but if you have been able to dodge the litigation bullet, congratulations.

How we can help by getting involved early. We know that having an attorney involved in all aspects of a construction project will vastly improve the chances that the project will be successful. We therefore highly recommend that you have a competent construction attorney review your contracts before you are legally committed. This firm has negotiated construction contracts in the realm of $150 million total cumulative value, so we are very familiar with construction contracts.

How we help by getting involved after you are having problems. Scholefield Associates, is uniquely qualified to handle major and minor construction disputes, ranging from strategic legal decisions, effective dispute resolution (without resorting to a trial), to project delay and schedule analyses. Our technical experience and training directly related to construction allow us to work swiftly and efficiently. We can confidently say that there are only a handful of law firms nationwide that have licensed professional engineers, licensed general contractors and experienced large industrial project managers on staff to serve you. We know the law, we know construction and we can prove it.

As a construction law firm, we know that there some essential skills that are necessary to be effective and efficient. These should not be mutually exclusive concepts. Unfortunately, none of the skills that make a law firm effective or efficient in construction are those that are taught in law school. Skills like engineering, or project management have to be taught or gained from actual experience. What we can handle in-house, many other firms often have to hire outside experts at your expense.

We pride ourselves on being able to handle numerous support tasks in-house, such as high speed scanning, document conversion and electronic Bates numbering. What is commonplace at most firms is an electronic document management system. We are not different in that we keep thousands of documents organized and searchable at an instant. We also have portable high speed scanners just for document acquisition. We have an all digital in-house professional video editing facility, on-location video production equipment, and on-location professional audio equipment. We use the most current award winning trial presentation software and have a high definition capable courtroom projector specifically for this purpose. We also know how to use the equipment, and know when the use of the equipment may be overkill or ineffective. What does all this do for you? It helps you get results and it saves you money. What does it do for us? It makes our job easier.

Lawyers and construction...are they just an extra expense or do you really need them? If you do not choose your firm wisely, they may be just that, an extra expense. You decide.

Call our offices to discuss how we can help you: 619-544-0086

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Important Questions to Help You

Click on the question to get some important answers

1. How do you get paid without resorting mechanics' liens?

2. What are killer contract clauses?

3. What to ask an attorney to determine if they can help you?

4. What qualifications and skills make a good construction law firm?

5. How do you save money using an attorney?

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Anything But Typical

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