Pre-Action Advice May Not Be Preventive Law Advice
James G. Frierson (1)
The traditional view that the primary function of a lawyer is to represent clients in making claims or defending lawsuits continues to be held by many attorneys. As children and as pre-law students, future attorneys see lawyers portrayed on TV and in movies as prosecuting or defending lawsuits. The Court TV channel and so-called reality-based shows such as Judge Judy present law as a method of deciding preexisting disputes. Most law school courses perpetuate this view by limiting coverage to decided cases--implying that the work of lawyers is to deal with preexisting disputes. Therefore, it is not surprising that many lawyers see themselves as advocates whose job is to represent plaintiffs or defendants.
Through the efforts of people such as Louis Brown, Ed Dauer and an increasing number of general counsels for large corporations, as well as organizations such as the National Center for Preventive Law, both business clients and attorneys increasingly see the value of preventive law. However, it is a lengthy and difficult task to change the mind-set of lawsuit-oriented attorneys. Therefore, preventive law advocates are satisfied when more clients ask for--and more attorneys give--pre-action legal advice. However, the "preventive" legal advice given by attorneys who continue to see the law in terms of plaintiffs, defendants, and lawsuits may be wrong because the advice recommends actions that aid in winning future lawsuits, rather than preventing the lawsuits.
The area of employment law offers some good examples of bad preventive law advice. For example, many attorneys advise employers to refrain from giving a discharged employee the reason for his or her dismissal. Some "experts" have even written articles explaining the rationale for the advice. It goes something like this: Because the U.S. (except Montana) follows an employment-at-will rule whereby employees can be discharged for any reason except those in violation of a specific law (such as discharges based on race, sex or disability, or because the worker made a workers' compensation claim or reported violations of certain laws), it is best to refrain from giving an employee the reason(s) for discharge because the reason may come under one of the exceptions. If no reason is given, it will be more difficult for the discharged employee to prove the reason comes under one of the exceptions to the right to dismiss employees at will. Such advice may help defend lawsuits brought by discharged employees, however it is the wrong advice.
It is erroneous advice because it increases the chance of a lawsuit being filed. Employees who are given no reason for their discharge will naturally (and reasonably) believe the discharge is unfair. This greatly increases the chance that discharged employees will see an attorney who will file a lawsuit. And, because of the legal costs in defending lawsuits, employers lose each time an employment lawsuit is filed and prosecuted, even if there is a successful defense. Various estimates of the average defense costs in employment law cases range from $45,000 to over $100,000. Add to this the amount of managerial time involved in giving depositions and other trial-related activities, and a company may lose hundreds of thousands of dollars by following the advice and creating a lawsuit, even if the employer "wins" the case by presenting a successful defense.
On the other hand, stating the reason for the discharge reduces the chance that the discharged employee will even see a plaintiff's attorney or file a complaint. The ex-employee may not agree with the judgment of the company, but he or she knows there is a reason, therefore the individual is less likely to see an attorney. If the ex-employee does see an attorney, the attorney is less likely to accept the case when the reason(s) for discharge was given, as opposed to a patently unfair situation where an employee is fired for no specific, stated reason.
Lawsuit-oriented attorneys may also give the wrong advice as to how an employer should respond to a notice of a possible legal claim--by a phone call, FAX, or letter from a plaintiff's attorney threatening a lawsuit. Lawsuit-oriented attorneys are likely to advise disclosing as little as possible at this stage of the potential lawsuit because the plaintiff in a later trial may use the disclosures. However, if an employer gave the discharged worker the reason(s) for dismissal--and this was not successful in preventing the worker from seeing an attorney--prompt disclosure of the reason(s) and supporting documentation to the plaintiff's attorney will often cause the plaintiff's attorney to drop the case. Plaintiffs' attorneys normally work on contingent fees and cannot afford to pursue cases where the chance of winning is poor. The result is that the employer-client "wins" by avoiding the filing of a lawsuit.
Lawsuit-oriented attorneys conducting employment law audits and providing general "preventive" legal advice may fail to provide an employer with valuable (and correct) preventive law information. For example, compare the approach of a lawsuit-oriented attorney and a true preventive law attorney in giving advice to a company about sexual harassment. The lawsuit-oriented attorney may recommend the adoption of a company sexual harassment policy and procedure that conforms to the requirements set forth by the U.S. Supreme Court's 1998 sexual harassment decisions that outline the steps employers should take to avoid legal liability for harassment that does not result in a tangible job detriment (the most common type of harassment). Basically, the Court stated that a company that develops and communicates a clear policy against sexual harassment that includes methods to report the harassment to management, including a method to bypass the alleged harasser, is not legally liable for harassment, even if it is committed by a supervisor or manager, unless the employee reported it to management and the company failed to promptly stop the harassment. The attorney therefore recommends a company policy that meets these guidelines. Implementation of the new policy will allow the employer to successfully defend lawsuits where management was not informed of the harassment and given a chance to stop it. Under these circumstances, the company can "win" a sexual harassment case--after spending thousands of dollars to successfully defend the lawsuit.
A true preventive law attorney may recommend the same sexual harassment policy and procedure, but add two more important recommendations. First, that the policy and procedure apply to all types of employee harassment, whether based on sex, race, religion, national origin, disability, age, marital status, sexual orientation, or other personal attributes. Second--and more important--that the company develop a comprehensive employee complaint procedure for all types of complaints that provides for a mixture of muti-level review, peer review, possible mediation, and the final step of arbitration, in exchange for the employees' promises not to file lawsuits. Good company polices and procedures that offer due process, including the final step of compulsory arbitration, can be written so as to prevent employees taking disputes to court. These alternative dispute resolution procedures can solve employer-employee disputes more effectively, more quickly, and less expensively than lawsuits, thus allowing employers to really "win" by reducing the large costs involved in defending lawsuits.
As these examples illustrate, good preventive legal advice should be based on preventing lawsuits, not just winning lawsuits. Attorneys giving pre-action advice must recognize this. If they do not, their "preventive" law advice may create more harm (encouraging lawsuits) than good (winning the lawsuits).
Advocates of preventive law must do more than advocate pre-action legal advice. Advocates must help change the mind-set of most attorneys. Emphasis must be placed on convincing and training attorneys to give advice that minimizes legal problems and avoids lawsuits, rather than advice that is legally sufficient to successfully win or defend lawsuits. Effecting such a change is difficult because it requires attorneys to change their entire concept of practicing law. However, this change in attitude can occur if:
Ø Law school courses devote more time to the coverage of preventive law concepts.
Ø Practicing attorneys are convinced of the benefits of a preventive law approach.
Ø Legal journals and seminars include specific, practical preventive steps that may be taken to effectively offer clients true preventive legal advice.
If advocates of preventive law are successful, clients will obviously benefit. Less obviously, lawyers and the legal profession will also benefit by changing the image of lawyers from that of "hired guns" who do anything to win to that of "trusted advisors" who truly help their clients and society.
1. James G. Frierson is an attorney and professor in the College of Business at East Tennessee State University. He is the author of over 150 journal articles and books, including Preventing Employment Lawsuits: An Employer's Guide to Hiring, Discipline and Discharge, and the Employer's Guide to the Americans with Disabilities Act, both published by the Bureau of National Affairs.