Why You Should Consider “In House Counsel”

English: The construction underneath Branko's ...

English: The construction underneath Branko’s Bridge. (Photo credit: Wikipedia)

We construction lawyers have occasionally taken it on the chin as one of the obstacles in the construction process. However, I have often argued what I believe to be true, that early consultation with a construction lawyer, before problems occur, is a great way for a construction company to avoid issues and to, yes, save money in the long run.

I also find, through my involvement with the AGC of Virginia and other construction related endeavors, that most construction professionals find lawyers to be at best a necessary evil that are only to be consulted in the event that there is an immediate payment or other legal problem to be resolved. Of course at the point where a contractor or subcontractor is in the position of not having been paid or of having a project behind schedule due to a supplier’s late delivery money and time have already been lost and action needs to be taken quickly. Any time a lawyer needs to take action quickly, the legal fees and time speaking with that attorney skyrocket quickly.

While some problems (for example a sudden April snow storm) are neither avoidable or foreseeable, I find that many of the issues that develop could have been nipped in the bud through some combination of better contract negotiation/drafting, better up front communication, and dealing with the small issues as they arise instead of waiting until the issue becomes a critical one requiring some sort of legal action such as a lien or complaint. Often a simple phone call to your construction attorney could put you on the right path and keep him or her from having a “Monday Morning Quarterback” type conversation with you regarding what would have been better to have done a month ago.

In short, having an attorney on the payroll, even as a small construction company (yes, I understand that 99.9% of the construction companies out there don’t have an attorney as an employee), is a great idea. If possible, see if you can get that attorney to act as “in house counsel” (preferably at a flat rate as I do for clients) to field questions that arise and could take 10 minutes to resolve instead of a year of litigation. Such an arrangement could include contract review to be sure you aren’t signing something that will bite you later. Of course, these arrangements may not include litigation or other work that involves too many factors outside of your or your lawyer’s control, but hopefully such an arrangement will help avoid such situations in the first place. Making such counsel part of your “overhead” can be a relatively small expense now to avoid a huge headache later.

Please let me know your thoughts with a comment below. I encourage you to subscribe to keep up with the latest Construction Law Musings.

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