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Lawyers, litigation and lard

By Doug Hunt, SVP – Development (South Bend, IN)

Given the subject I’ve chosen — our legal system and lawyers — you would think that I would start out with a “lawyers joke.” But I figure you can find all kinds of good ones on the internet. And, as you’ll see, I’m not here to bash lawyers anyway.

I suppose that a lawyer’s skills are like nuclear energy.  They can be used for good or they can be terribly destructive. No question though that good legal services are critical to success in real estate development. Almost no deal — sale, purchase, loan, etc — goes “unlawyered.” So picking the right lawyer for our side and hoping the other side of a transaction has the “right” lawyer is key to minimizing the hassle of a transaction.

Having team-oriented attorneys at our side is critical, especially at Holladay since we deal in such a variety of types of real estate. But here is the type of attorney we don’t want on our team and dread showing up on the other side’s team: that’s a lawyer who is in love with his own turn of phrase in a contract. Or one who doesn’t distinguish between the “beef” and the mere “beans” in contract content. More money and pulled hair has been sacrificed in blabbing back and forth over phrases that won’t make a bit of difference in the “real” world.

These persnickety to a fault lawyers often work for the big players, who have a lot of money because they are big but also are chock full of bureaucrats afraid to make a decision.  Funny thing is”¦go to about any closing with an “institution” involved — big bank, big seller, big tenant, etc — and you are in a maze of paper. Only the closing guy at the title company and an occasional beverage can get you through it.

And guess what? Did it really prevent the Great Recession, wherein all those brilliant credit protection devices evaporated? My latest favorite is the new form from Homeland Security where you have to confirm that you are a citizen”¦ wonder where that gets filed!

Not to blame certain lawyer types alone for our love affair with the “protective power” of words. We all have excessive faith in words on paper sometimes and lawyers are usually the people who do the writing.

We have been careful at Holladay to have lawyers on our side who –first and foremost — understand that we don’t come to them for help on a deal unless we want to do the deal!  So we usually have a good constructive discussion on the deal points and it’s our lawyer’s job to write that up — as simple and direct as possible. Or if the other party’s lawyer has written the draft, our lawyer’s job is to make the main changes needed to do the deal and not to become a literary critic of the other attorney’s style, word choice or the width of his tie.

Throughout the years, we at Holladay have largely enjoyed such support from lawyers — good, solid advice and negotiating with the other guy’s lawyer about the deal points and not about this or that flyspeck wording.

Unfortunately, we have another experience with attorneys”¦ well, not so much attorneys as the courts in which we sometimes find ourselves.

In this case, I would give the attorneys a bit of a pass. The real culprits are greedy parties — yes and some are developers — who can throw a matter into court for little more than the cost of copying and postage.  They game our legal system to the detriment of”¦ well”¦ the detriment of everyone in our society.

Every court has to have what I think is called “rules of procedure.” You have to have a set of rules of course. But there is no hand on the controls in the sense that the judge usually doesn’t get involved in the substance of a dispute until months or years have passed. It seems that the real player for most of the time and dollars is the Court Clerk, who is usually very competent but having to play with a set of rules that would shame an ancient Chinese Emperor’s operation.

In the meantime, the party whose interest it is to delay has those months or years to put an issue — even pretty simple issues — into a deep freeze and play for time.

Now we don’t need to go back to frontier justice, where the judge comes out on his front porch and decides then and there whose cow is whose. But somehow, the rules for conducting a legal dispute need to be simplified or somehow the judgment of the judge needs to intervene earlier and separate wheat from chaff.

After all, the right to a speedy trial (or judicial decision) is in our Constitution. Though written to apply to criminal trials, we have become a society so quick to lawyer up over everything that in all matters before a court justice delayed is more often than not justice denied. “Due process” is a wonderful concept but the “do” has often become the “don’t.”

We can’t go back to the judge on his porch, but surely we can find ways to bring disputes to a resolution, where the rules draw out the basic facts and issues and where the judge comes to the table to review and decide in a timely manner.

The tradition of rights of property and contract is a linchpin of our economy. Never would we want arbitrary “justice.” But like many aspects of modern society, the legal system itself seems to be accumulating ever more bells and whistles. But all too often the train just stays in the station.

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