Q&A: Don’t expect an attorney to provide cut-rate legal services in HOA disputes

Question: I’m in settlement talks with my homeowner association over a complicated problem that we finally resolved during a long internal-dispute-resolution meeting. I want to include two concerns in our agreement, so the association told me to write the clauses and return the final draft. But I’m not an attorney and am afraid if I write those two clauses I could prejudice myself and my case.

After meeting with several attorneys, each was unwilling to write only the two clauses and wanted me to sign a retainer agreement costing several thousand dollars before they would begin. They also wanted to review and possibly rewrite the entire agreement.

For such a simple job why can’t I just hire an attorney for an affordable fee, for the limited purpose of writing only two clauses?

Answer: Your problem isn’t surprising. Just like many other service businesses, for example home repair contractors, lawyers often shy away from small tasks because of start-up costs, overhead and risk that are disproportionate to the size of the job, especially if it has any custom aspect to it.

To make economic sense for the vendor, a realistic price might be much higher than a client expects. A request to write “just a couple of clauses” or review a snippet of a contract suggests that the client is unsophisticated or naïve about legal matters. The commonly requested “quick” contract review for the purpose of finding “just the gotchas” raises similar concerns. A client asking for this is typically looking to economize — as perhaps you were — and spend only a few hundred dollars or certainly less than $1,000, well under what a professional job might require for a significant contract.

The first impediment to your “simple job” is that few clauses exist in isolation: most interact with the rest of the contract. Moreover, the context of the contract can affect the choice and significance of specific language. For example, what should a “penalty clause” be for delay in performance? Delivering software a month late is unlikely to cause the same dramatic business loss as for delivering a supermarket’s load of pumpkins after Halloween.

Clear language specifying damages must be tailored to the specific business situation, as should most contract terms. To thoroughly understand the interplay and implications among clauses can entail lengthy review time, often making it quicker and more cost effective to substantially rewrite the contract.

What’s more, because yours is “a complicated problem,” the attorney may need to spend considerable time speaking with you and reviewing documents to understand the potential issues. Without this preparation, clauses drafted in isolation are unlikely to achieve the overall agreement objectives. In your situation, the other parties may not immediately accept the new language so additional discussion and rewrites may be necessary with the attorney, all requiring still more time.

Of course, attorneys often do provide useful nuggets of free advice to established clients whose business and needs they understand, and who they know to be prudent and sophisticated about legal matters. But a request revealing inexperience about the law and its economics has to be treated with caution. Why? Attorneys’ unhappy prior experiences.

Many an attorney wanting to be helpful has provided a new client not only with a modest piece of advice or contract language but also responded without charge to a later request for “a small tweak.”

Unfortunately, some clients believe that paying for a small task entitles them to repeated callbacks. Yet an attorney’s only inventory is units of time, so multiple requests for “quick phone calls” implicitly cost money, or make the attorney look bad for repeatedly saying “no.” Moreover, even when a client is willing to pay, sporadic bills for incremental small sums can be an administrative burden for the attorney, while eroding the client’s goodwill. Retainer fees reduce this burden.

Worse, there is always a risk that an isolated clause is related to another legal situation, which would ethically bind the attorney to remain involved even when the client cannot pay for the work.

Worse still, some clients misuse the limited help, get into serious legal problems and unfairly blame the attorney for being the cause of their troubles. Although this isn’t common, the prospect of wasting scores of hours dealing with baseless client complaints makes attorneys cautious about unknown, let alone unsophisticated clients.

In situations like this, owners with limited funds may need to seek assistance from self-help books, legal workshops or other professionals.

Michael Krieger, a Los Angeles lawyer practicing business contract, technology and intellectual property law, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com.