Prevention, Management & Resolution of Disputes: Prevention

Posted by Malcolm Campbell on 05 October 2016
Prevention, Management & Resolution of Disputes: Prevention

As commercial & business lawyers we often first come into contact with a client in a time of crisis. Either they are being pursued or wish to pursue someone due to a dispute or argument that has arisen.

The work we are required to do for these clients is often time sensitive and of critical importance to the client based on their circumstances at that point in time. The client is often extremely stressed about the matter, angry or sometimes even upset about the situation they find themselves in. The client will often be consumed by that issue until it is resolved and they will often (but not always), incur significant legal costs in attending to the matter. Sometimes these matters take weeks or months to be finalised and in extreme cases some legal matters can take many years to be resolved.

How to help prevent disputes - the value of good business housekeeping

We often observe when assisting clients with their legal disputes that there will quite often come a point in time during their matter where it will dawn upon the client that had they taken some time and effort, years or months prior to the dispute arising, to attend to some basic housekeeping regarding their business they may well have been able to avoid (or at least minimise the likelihood of) the legal matter that they are currently dealing with. Clients will often say “I really wish I’d had you review this contract before I signed it” or “Why didn’t I come and see you before now” when they realise that the significant problem that they are now dealing with started off as a seemingly insignificant event in their business many months or years before.

A good analogy for the timing and costs of the provision of business dispute related legal services is the ordering and distribution of goods for a retail business. Many retail businesses these days favour the concept of “just in time” delivery compared to the more traditional method of ordering enough stock to see them through a certain period of trade, and have it sitting on your shelves ready to go. The theory being that the retailer only pays for the goods as and when they are ready to or have in fact already sold them to the customer. Whilst this may make sense in many circumstances it can be a false economy.

The risks associated with the ‘just in time’ approach (or in the scope of legal services ‘as and when a dispute arises’) is that it doesn’t allow for unanticipated incidents, unusual spikes in demand and can be subject to factors outside of the retailer’s control such as transportation delays. Having some stock sitting on the shelf could have assisted with these events. The same can be said for legal services. Waiting until there is a dispute before obtaining legal services means that there is already a problem to be addressed. Often by that stage it is too late to avoid the problem and all that can be done is to minimise the damage caused the problem.

The alternative approach is of course to have some ‘legal stock’ sitting on your shelves. Legal stock can be seen as the pre-emptive and precautionary advice you get from your lawyer before you take a certain course of action – this can result is knowledge of how to handle a situation or the creation of documents aimed at protecting you and avoiding disputes in the first place.

Having some legal stock on your shelf need not be expensive or time consuming and it is certainly cheaper, quicker and less stressful than the ‘just in time’ approach.

Is it time your business had a Legal Relationship Review?

To help you build up your ‘legal stock’ we provide a complimentary Legal Relationship Review for any business client or prospective client. One of our experienced lawyers will meet with you at your premises at a time convenient to you and review the legal basics of your business operations. We will provide you with a report as to our findings which outlines any suggestions that we have for changes or improvements. Some of these improvements may focus around documentation and other legal matters that we can assist with. However, often the recommendations we are providing to clients is to put them into contact with other professional service providers that are equally important for the success of a business, such as an accountant, an insurance broker, a patent attorney or a financial planner.

The Legal Relationship Review is also a great opportunity for us to meet business operators in a situation outside of a stressful legal dispute and at a stage that they are able to take the time and effort to consider the bigger picture in relation to their business, rather than being forced to focus on a specific matter that requires urgent attention. If you are interested in finding out more about our Legal Relationship Review please contact us at info@dooley.com.au or call us on 1300 306 335.

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