The OlyverApp Blog

Five Things Entrepreneurs Need to Know About the Legal Industry

Blog Home OlyverApp Home

Here's a poorly kept secret many business owners don't realize until too late: The legal system is an incredibly inefficient money-drain. OlyverApp helps entrepreneurs avoid dealing with attorneys except as and when necessary. Here are five things business owners need to know about the legal industry.

  • Litigation is almost always a waste of time and money. In the vast majority of cases, the opportunity cost of going to court far outweighs any benefit. Between attorneys' fees, time and resources devoted to litigation, and ancillary expenses, trials and appeals are rarely justified economically. Whether you are suing or being sued, forget about 'justice' and look at the case solely from a financial perspective. Don't let emotions get in the way of making the right business decision.
  • Arbitration is worse than litigation. Arbitration was supposed to be a more efficient means of dispute resolution than litigation. It isn't. Between the exhorbitant fees charged by companies like the American Arbitration Association (which do next to nothing) and the hourly rates of the lawyers who sit on the panels, you'll pay more and have little recourse no matter how bad the decision. Arbitration can be as time-consuming and inefficient as litigation, except instead of just paying for your own attorney now you're bankrolling the judges and court clerks, too. It was a good idea that the courts, big firms, and bureaucrats have turned into a money-making machine for a chosen few.
  • Beware of "Litigation Fatigue". At the beginning of the case, the parties are ready for a fight. But as the case wears on and more time and money are spent on what seem like utterly moronic disputes over scheduling, evidence, motions and anything else that comes up, the litigants lose interest. The lawsuit becomes a drag that everyone wants resolved, and the primary focus changes to getting out without losing face. So don't file suit just because you're angry.
  • Big firms can get away with just about anything. Legal regulators don't go after firms. They go after individual lawyers and typically focus on the proverbial "low-hanging fruit", i.e. sole practitioners who don't have the resources to put up a fight. Big firms can overcharge and engage in all manner of questionable practices essentially unchecked. Many don't, some do. If you're not comfortable with the lawyers with whom you're working, ask questions. Don't like the answers? Find another attorney. Little known fact: They're a LOT of lawyers out there. Many of the best are on their own or working in small firms, where you can get outstanding representation for less money.
  • Nothing is changing. The legal industry is a dinosaur. Some 80% of Americans can't afford representation in civil court. No real reform is on the horizon; the industry is largely controlled by self-serving judges and bureaucrats who benefit too much from the current system to change it (no matter how much they blather about "public protection"). Of course, some innovative industry leaders and judges are genuinley pushing for change, but your goal should be to avoid the court system whenever possible.
Want more tips for running your business? Follow OlyverApp on Twitter and LinkedIn.