As your business grows it becomes increasingly more important to have available a trusted team of financial and legal advisors. Including an experienced construction lawyer on your team can go a long way to help keep your projects out of trouble and thus help ensure that your business remains healthy and profitable.
Claims and disputes in the construction industry are commonplace. On a construction project of any complexity, disputes are often the rule–not the exception. During the lifetime of most construction companies, it is likely that the company will become embroiled in a claim or dispute that cannot be resolved without the assistance of a lawyer. While it is best to avoid construction claims and disputes from the beginning of a project, it is important to resolve them quickly and efficiently once they arise.
Avoidance or a quick resolution of disputes is often crucial to the economic success of the project. Claims and disputes involving construction projects tend to be technically complex and factually intensive. As a result, arbitration or litigation of construction disputes can be time consuming and costly.
Construction litigation is generally characterized as “complex litigation” because the legal and procedural issues involved are typically very complex. If you are faced with a construction claim or dispute, it is very important not only to hire a lawyer who knows his or her legal trade but to hire a lawyer who also knows the construction trade—i.e., hire a seasoned construction lawyer.
Hire a seasoned construction lawyer, not a general practitioner.
Your first goal should be to find a lawyer with a thorough knowledge of the construction industry. Owning a pickup truck and having a law license does not make one a construction lawyer. Nonetheless, there is no shortage of available lawyers who have handled a few matters for construction companies and later market themselves as “construction attorneys.” Successfully drafting construction contracts or later litigating, arbitrating, mediating, negotiating or otherwise resolving construction claims and disputes, however, requires that the lawyer have a thorough familiarity with the construction industry and a thorough knowledge of the unique problems that arise on construction projects.
When selecting a construction lawyer, you should consider the following. Does the lawyer and the lawyer’s firm concentrate on representing participants involved in the construction industry? Does the lawyer understand the construction business and have experience in helping construction participants avoid and efficiently resolve construction claims and disputes? Does the lawyer have any practical hands-on experience in the construction industry? Does the lawyer have a background in construction, engineering or architecture? Note that while having a technical or construction background is certainly very helpful, many outstanding construction lawyers have never picked up a hammer. If presented with disputes while the project is ongoing, does the lawyer understand that typically it is critically important to keep the project moving forward while helping to resolve disputes that may threaten to derail the project? Has the lawyer published, lectured and taught on construction law topics? Is the lawyer someone whom you can trust and someone with whom you can develop a long term relationship?
Also consider the law firm that the construction lawyer is associated with. How deep is the law firm’s bench of construction lawyers? What is the breadth of their experience? What sub-specialties are they focused on? Do other members of the law firm have focused experience in particular construction law issues that can be drawn upon if necessary? If the law firm has an extensive in-house network of construction lawyers, the collective experience and knowledge base of those lawyers can be a tremendous asset to the client. Have other members of the law firm extensively published, lectured and taught on a wide variety of construction law topics? Is the law firm, and are its members, actively involved in the construction industry? Is the law firm, and are its members, actively involved in trade associations? Does the law firm keep abreast of current legal issues and changes in the law affecting the construction industry? Is the law firm dedicated to sharing that information with the industry via newsletters, white papers and client alerts? How long has the law firm been in business? Does the law firm have an established national practice so that it can support you as your own business grows and expands into other geographical regions? Is the law firm, and are its members, well-respected by their industry peers? Has the law firm earned a good, solid national reputation within the construction industry?
Get a seasoned construction lawyer involved early.
Consider developing a long term professional relationship with an experienced construction lawyer. A seasoned construction lawyer can be a very important member of your team of valued and trusted advisors. Most participants in the construction process who have been involved in a contentious claim or dispute will agree that one of the best ways to avoid a claim or dispute is to get a seasoned construction lawyer involved at the very beginning of a project and, certainly, as soon as a claim or dispute arises.
A seasoned construction lawyer can assist and support you in obtaining “quiet” successes by providing thoughtful and experience-based advice and counseling that enable you to achieve your business goals without contentious disputes or protracted litigation. If litigation or arbitration becomes necessary to resolve a claim or dispute, a seasoned construction lawyer can help you develop parallel strategies to (1) efficiently advance the case toward a court verdict or an arbitration award, and (2) identify and seize upon opportunities to resolve claims and settle disputes early.
On the front end of a project, the construction lawyer can help draft or review contracts and provide sage advice regarding how best to allocate and manage contractual risks. During the construction phase of a project, the construction lawyer can help guide you through the minefields that often threaten the economic success of a project. Construction claims and disputes during construction typically involve very short deadlines and strict contractual notice requirements. When a claim or dispute arises, the construction lawyer can help develop strategies for resolving the claim or dispute early or for minimizing the risks going forward. On the back end of a project, the construction lawyer can assist you in: closing out the project; collecting unpaid contract balances; and perfecting lien and bond claims. In most states, the courts strictly interpret statutes governing mechanics’ and materialmen’s liens and claims against payment and performance bonds. Courts strictly enforce the relatively short filing deadlines associated with lien and bond claims. Thus, it is critically important that you do not wait until days before the filing deadline to contact a construction lawyer for assistance.
Initiate a Conflicts Check. The construction industry is sometimes a small world. Understand that once you have selected a construction lawyer, there may be existing conflicts or potential conflicts of interest that prevent the selected lawyer from representing you on a particular matter. For example, the lawyer may already be representing an opposing party. When you first contact your selected construction lawyer regarding any new matter, you should expect the lawyer to run a “conflicts check” before the lawyer can discuss your case with you. The purpose of running a conflicts check is to make sure that the law firm does not already represent someone whose interests are opposed to yours. Thus, before you share any confidential information with the lawyer, be prepared to provide the following information: (1) name of your company and the names of all related business entities; (2) names of all adverse parties with interests opposed to yours; (3) names of all potentially adverse parties; (4) the project name; and (5) the project location. Once the construction lawyer has reported that there are no conflicts, you will then be free to candidly discuss the facts of your case.
Prepare and organize for the initial conference.
There are many reasons to hire a construction lawyer. For example, your objective in hiring a construction lawyer may be to (1) have a contract reviewed or drafted, (2) get an evaluation of a claim or dispute, (3) file a lawsuit or prepare a demand for arbitration, (4) obtain a defense of an action filed against you, (5) initiate a request for mediation, (6) file a lien, (7) assist in recovering an unpaid contract balance, or (8) to get legal advice about the consequences of a particular course of action. In any event, be prepared to define and discuss your overall objectives and to clearly communicate what you would like to achieve by involving the construction lawyer.
Organize your files before meeting with your construction lawyer. Have handy all of the documents, including contracts, subcontracts, or purchase orders, that may be relevant to the issues you would like to discuss. The quality and completeness of the information that you provide to your lawyer can have a direct impact on the reliability of any predicted outcomes that are discussed.