Winning Your Lawsuit–the importance of expert witnesses

30 06 2011

By: Aaron Shechet

As we mentioned in our article “Winning Your Lawsuit—understanding litigation” (here or here), evidence is the primary focus of a lawsuit. In “Winning Your Lawsuit,” we focused on the discovery process, where you exchange evidence, or avoid exchanging evidence, with the other party. Here, I want to talk about the next step: explaining your evidence to a judge or jury.

While the value of some evidence is obvious – for instance, a signed contract regarding the subject matter of the dispute – other evidence requires explanation. For example, your opponent may claim that the signature on your contract is a forgery. In that case, someone needs to analyze the signature and provide an opinion as to its authenticity. Some cases turn on scientific or medical evidence which requires explanation. Other disputes require an expert witness simply because the central issues are confusing or unsettled. For example, I served as an expert witness to testify about true retainers in a lawsuit by music producer Phil Spector against his lawyer Robert Shapiro. This issue isn’t scientific or technical, but it is the subject of much disagreement in the legal community.

In California, the evidence code prohibits laypersons from giving opinions about anything requiring special qualification, so you can’t have just any witness explain issues like these to the jury. In situations like these, you need an expert witness. An expert witness is exactly that – an expert in a specific field who will give an opinion about something that most people are not qualified to testify about. After all, if someone does not have special training to identify forged signatures, their opinion about a signature is little more than a guess. It is not evidence.

Whether you need to hire an expert witness depends on your case. Qualified experts are expensive, and may need to spend a lot of time preparing for your case, answering questions at a deposition, and testifying at trial. But in some cases, an expert witness is vital.





Writing An Operating Agreement That Works For You

28 06 2011

When you form a Limited Liability Company, your attorney should prepare an Operating Agreement. Your Operating Agreement is the contract that governs your company, and it is very important, especially if your LLC has more than one member. You should discuss the following issues with the other members of your LLC and your attorney before your Operating Agreement is prepared. If you already have an Operating Agreement that does not adequately deal with these issues, you should amend it.

1. Management/Control of LLC: Who will be responsible for managing the LLC? If more than one person will have management responsibilities, will you have to agree in order to make decisions? If you can’t agree, what happens? Will there be any compensation to members who take on a management role? Is there a non-managing member who will get a percentage of the profits? Think about how you will hire employees, take care of expenses, and who will be responsible for accounting issues.

2. Distributions: How will the income of the LLC be distributed?

3. Bringing in others: Can other investors be brought into the LLC, and if so, is agreement required? Will there be criteria for new members, or a process for approval?

4. Separation/if someone wants to leave/if someone dies or is incapacitated: What happens if a member of the LLC wants or has to leave? Is that partner entitled to transfer his interest?

5. Exit Strategy: Are you planning to go public or be acquired?

6. Capital: How much money is going into the LLC, and where is it coming from? Will more money be put in later? If the LLC needs more money, what will you do?

7. Dissolution: Process? Is there a time or event that should trigger dissolution of the LLC?

8. Death/Incapacity: If a member dies or becomes incapacitated what happens?





Winning Your Lawsuit–understanding litigation

28 06 2011

We have found a lot of people misunderstand the process of a lawsuit.  They seem to believe that lawyer A files “something,” then lawyer B files “something,” then everyone goes in front of a jury at which point lawyer A screams, then lawyer B screams and the lawyer who is “better” wins their client a lot of money.  This misunderstanding probably arises from television portrayals of lawsuits as quick events.

In order to “win” a lawsuit, the first step is to understand what the process and goal of a lawsuit is.

In short, a lawsuit is an attempt to get a judgment in order to force another party to do, or not do, something.  The most common goal is to force another party to pay money for damage that their actions have caused.  But it is very expensive to win a lawsuit, so the cost of winning should, ideally, be far less than the amount at stake.  If you are defending a lawsuit, the goal should be to get it dismissed with the least possible cost.

But why is it so expensive?  A lawsuit is not a one-day screaming match.  Although a trial might, depending on the case, only last for one-day, in order to “win” you need evidence.  The first thing to ask yourself before embarking on a lawsuit is “what evidence do I have in my possession to prove my case?”  The second thing to ask yourself is “what evidence will I need to get from the other side to prove my case?” These questions are important because both sides will have months, often stretching into years, to conduct “discovery,” which is the process of getting evidence from the other side.

Too often, the evidence that you need—documents, testimony, the identity of witnesses – is in the hands of your opponent and they won’t turn it over without a fight.  If you understand that the main driver of a lawsuit is gathering and protecting evidence, then you will have a better understanding of the nature of litigation and you will make your lawyer’s job easier.  That is, you will be in a better position to win.





What Kind of Lawyer Does a Start-Up Need?

27 06 2011

If you’re starting – or thinking about starting – a business, you know that every penny counts. Unless you are lucky enough to have a lot of funding from the start, you will need to make some hard decisions about what to spend on in the beginning. One of those decisions will, undoubtedly, involve legal fees.

As a business owner, you need to make your legal budget work for you. There are some things you can probably do without – or do on your own – in the beginning. There are other things that you need a lawyer to help with. Your lawyer should, ultimately, prevent legal problems and save you money. But hiring a lawyer is a daunting task. Here are the things you should be thinking about as you make this big decision:

– Your lawyer should be able to advise you regarding entity formation, intellectual property, funding and investment, and contracts. He or she should be focused on litigation prevention. If you are in a regulated industry, your lawyer should be familiar with it.

– Your lawyer should be comfortable discussing fees with you. Try to find a lawyer who is flexible about fees.

– Your lawyer should have experience working with start-up companies, and should be enthusiastic about your company. You want a lawyer who will be part of your team. He or she should point out problems and find solutions.

– Your lawyer should be available. Don’t hire someone who never returns phone calls or emails. You might need your lawyer to be available at the last minute.

– Your lawyer should be looking for a long term relationship, not a quick paycheck. A lawyer who wants to keep you as a client will treat you well.





Patents, Trademarks, & Copyrights–a Primer

21 06 2011

What Is a Patent?

A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office. The term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. US patent grants are effective only within the US, US territories, and US possessions.

The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.

What Is a Trademark or Servicemark?

A trademark is a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A servicemark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms “trademark” and “mark” are commonly used to refer to both trademarks and servicemarks.

Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark. Trademarks which are used in interstate or foreign commerce may be registered with the Patent and Trademark Office. The registration procedure for trademarks and general information concerning trademarks is described in a separate pamphlet entitled “Basic Facts about Trademarks”.

What Is a Copyright?

Copyright is a form of protection provided to the authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly.

The copyright protects the form of expression rather than the subject matter of the writing. For example, a description of a machine could be copyrighted, but this would only prevent others from copying the description; it would not prevent others from writing a description of their own or from making and using the machine. Copyrights are registered by the Copyright Office of the Library of Congress.





“Non-refundable” Retainer Fees: Fact or Fiction?

21 06 2011

If an attorney required you to pay a “non-refundable” retainer fee, would you hire that attorney? Many people do, although there are few situations in which a “non-refundable” fee is appropriate.  An attorney must refund unearned fees, unless those fees fit into the definition of a “true” or “classic” retainer.

The True Retainer: A true retainer is “earned upon receipt” (that is, becomes the property of the attorney immediately), and is not contingent upon the provision of legal services. It is generally not refundable, although it may be refundable where the attorney does not fulfill his end of the bargain, or where the fee is found to be unconscionable. A true retainer must not be placed in a trust account, and must not be billed against.

Advanced Payment Retainer: An advanced payment retainer is intended to compensate an attorney for legal services. If money is not a true retainer, it is most likely an advanced payment retainer. It is paid in advance and billed against as the attorney performs services and/or incurs costs on behalf of the client. This retainer should be placed in a trust account, although there is some indication that it may be permissible to place it in a general account. An advanced payment retainer is always billed against, and any unearned portion is refunded to the client.

Security Retainer: A security retainer may be billed against, although a client who pays a security retainer generally pays bills as they come due. The security retainer is meant to compensate the attorney in the event of non-payment. Therefore, the attorney would send regular bills to the client, but if the client does not pay on time, the attorney may bill against the security retainer. The security retainer should be placed in the attorney’s trust account, and, like an advance payment retainer, must be refunded at the end of the representation if not earned.

It is difficult to determine when a true retainer, which many attorneys refer to as a “non-refundable” retainer, is appropriate. The first step of this analysis is to ask what the attorney is selling in exchange for the true retainer. The attorney must be selling “availability” and not “the performance of a particular legal service” (the definition of an advance payment retainer). Many attorneys wrongfully believe that “availability” means that the attorney will perform immediate legal services. However, availability must be separate from the performance of legal services in order to justify a true retainer.

A proper true retainer situation requires the sale of something other than legal services. There are a number of other items, besides “performance of legal services” that a client may wish to purchase:

  • the attorney’s promise of “availability” for a case that might not occur,
  • the attorney’s promise of “availability” where the client is still considering several attorneys,
  • the attorney’s promise that he or she will never represent a competitor of the client,
  • the attorney’s promise that he will not represent the client’s adversary in a lawsuit,
  • the attorney’s exclusive “availability,” although the attorney would otherwise have the time and ability to represent multiple clients, or
  • the attorney’s promise to be “available” every Monday (for example) to meet with the client and answer questions, although the client doesn’t promise to take advantage of this “availability.”

In all the situations above, the lawyer is selling something to the client that is not accounted for by the attorney’s billing rate. The attorney might be forced to keep a light schedule although the client may not hire him, or to turn down a paying client in order to avoid a “conflict” with a client who has never actually used his services. The client receives a benefit, and the lawyer’s reward is uncertain. In these cases, a true retainer might be justified.





First post

11 06 2011

This is the first post on SolutionsLLP (blog). Like all blog first posts, this one says nothing and is used just for testing purposes. We will leave it up for posterity.