Business Disputes and Wasted Resources
Discourage litigation. Persuade your neighbors to compromise whenever you can. -abraham lincoln
Abraham Lincoln was asked by a young attorney how to build his law practice. His advice (part of it quoted above) was counter-intuitive: discourage your clients from suing other people. But, wait, the idea of encouraging a client not to sue means that the lawyer would not earn billable hours on the matter. How does that build a law practice?
It builds a law practice by ensuring your potential clients stay in business.
Nothing is such a waste of resources as business vs. business lawsuits. Settling a disputed claim by compromise does not make your business weak – it establishes your business as reasonable. Compromise and negotiation show that your business is interested in doing business, earning a profit, and moving ahead. Litigation means that compromise and negotiation has failed and now you will spend profits in non-productive ways.
There are those that disagree. Professor Alan Childress recently posted that encoraging mediation creates, "… a legal system that no longer wants to state right or wrong, or enforce norms, just dispute-resolve. And let's be sure to do it in an efficient (cheap) manner." His example was the story about Bernard Goetz (the subway shooter) being forced to mediate with his alleged mugger. Attorney Victoria Pynchon responded to the article in her blog and pointed out:
"Ask any party who has lost a civil or criminal suit whether he or she received "justice" and I'll wager that 9 times out of 10, s/he will say "no." Anyone who has won will also likely say "no" at least half of the time."
Attorney Pynchon did not cite her source for that statistic, but I can vouch for it. Many business owners do not feel as if they have won anything after being successful in business litigation and I would add that the 50% cited by Ms. Pynchon falls to around 20% … when the next invoice from the law office arrives.
Communications, Contracts, Law, Problem Solving, Risk Management, Small Business Legal | Gregory Boop | 07 March 2008 |
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By Vickie Pynchon, March 7, 2008 @ 4:05 pm
I don’t think there ARE any statistics on party satisfaction with courtroom victories.
Like you, my 50% guesstimate is based upon an entire business career — 25 years representing businesses in commercial litigation and four years as a mediator helping businesses settle that litigation.
Nice blog. I subscribed via your RSS feed.
Thanks for the mention and the link!
Best, Vickie
By Greg, March 10, 2008 @ 12:56 pm
I don’t think there are any stats and I think that practitioners don’t like to talk about the level of dissatisfaction with litigation outcome. Thanks for the comment and kind words.