These are the some of the most dangerous words a business person can speak: “It is not about the money; it is about the principle.” I cannot tell you how often I have heard those words spoken to me as I sat across the table from a client, or would-be client. I shudder to think of it.
I understand. When I have been wronged or feel that I have been wronged, I want some vindication. Whether it is a business partner or fellow shareholder, a client or customer, a competitor or someone else, when we have been wronged, or feel that we have been wronged, business sense sometimes goes right out the window.
The problem for the business person is this: when all is said and done, it is always about the money (or at least it should be). As an attorney who has represented businesses for over 20 years, I can vouch for the fact that these are dangerous words when a business person is looking more at the “principle” than at the bottom line.
Please do not misunderstand me, principle is of the utmost importance in business, but your principles are what are important. If you are honest, have integrity, deliver quality services or products, do not take advantage of people and have a good reputation, your business will prosper because people can trust you and want to do business with you. Your principles are of the utmost importance.
When a client says, “It isn’t about the money; it is about the principle,” they are telling me, “I am right; that other guy is wrong; and I want him to pay.” It really is about the money, and a business person should be mindful of that and make a good business decision about how to handle the situation.
We will inevitably run into people whose are unprincipled or do not have the same principles that we do or with whom we have tension, conflict and disagreement. Those are rocky shores we all must navigate, and we should do our best to avoid running up on those rocks. That means being careful about the people with whom we do business, protecting ourselves from unscrupulous people, and not assuming too much about other people. We all want to be trusting as much as we want to be trusted, but that does not mean we should not take measures to protect ourselves and our businesses.
By the time people call me, however, something has gone wrong. The unscrupulous business man has taken advantage, the customer has failed or refused to pay, disagreements or tensions have arisen with business associates. Communication between the parties has broken down, and the situation has gotten beyond the client’s ability to resolve it without help.
These things happen regardless of the degree of circumspection and care that we exercise in conducting our business. If we extended absolutely no trust and no benefit of the doubt to anyone, we could do not do business at all.
If you run your own business and conduct your own life with honesty, integrity and principle, the temptation is to want to defend your honor, defend your principle, and to expose the lack of principle, lack of honor, and lack of trustworthiness you see or by which you have been influenced by someone else. That is where my caution comes in. Business people should never lose sight of the fact that the decisions in these situations should be good business decisions.
Litigation is and should be viewed as a last resort. Litigation should only be considered when all other options have been exhausted. Those options that should be exhausted will include some compromise that will allow you to settle the difference, the dispute, or to resolve the wrong that has been committed or has arisen.
Ah, there’s the rub. Why should I compromise when I am not the one who has committed the wrong? That is the common response, and I dare say a dangerous one.
For starters, disagreements and wrongs, or perceived wrongs, often arise from mutual misunderstandings, assumptions or presumptions that should not have been made, lack of communication, lack of clear communication, lack of care and other things. In many, many instances, I see some culpability on my client’s part that my client often fails to see.
The familiar adage about taking the plank out of your own eye so you can see to take the speck out of your brother’s eye applies here. It may only be a speck in your eye, but that speck seems like a plank if it is distorting and blocking your view. The speck in the other part’s eye is also distorting and blocking the view the other person has.
Once a dispute has arisen to the level that parties are talking to attorneys, however, people are past the point of being able to see well enough to take the specks out of each other’s eyes. Even if you have come to some self-realization that there were things you did or did not do that contributed to the situation, the relationship has deteriorated to the point where you are not close enough to engage each other in productive conversation.
Perhaps, as well, you really have done nothing to contribute to the situation; you did everything right; and you were wronged nevertheless. Focusing on the principle alone is still a dangerous mindset.
You need to make a good business decision about how you are going to handle the situation. Litigation cannot always be avoided, but it should be truly a last resort. Regardless of the fact that you have been wronged, you should consider the practical alternatives to resolution that will have the least adverse impact on your business and put you in the most beneficial position. That means you need to count the cost.
The cost of any dispute or situation in which you have been wronged has several components. Of course, the cost involves whatever loss or damage you have already suffered. It involves the amount of money you will spend in attorneys’ fees and costs to resolve the situation. It includes the amount of time, preoccupation and effort from you and your employees or agents to reach that resolution. It includes the strain on you and those around you that accompanies litigation. You need to factor those and other costs into your decision.
Those costs should be weighed against the benefits to be gained. You need to have a candid discussion with your attorney regarding both the costs and the likelihood of success. Success does not simply mean vindication; success means recovery of what has been lost, payment for the damages that you have incurred, and/or restoration of your position. It is not a good business decision to spend $10,000 to collect $5,000.
Getting a judgment against someone is only half the battle; collecting the judgment is another matter. You need to consider the extent to which your judgment may be collectible. By collectible I mean the extent to which the individual or business entity has resources that can be seized to satisfy your judgment. Many times I have obtained judgments for my clients only to have the debtor turn around and file bankruptcy, wiping out the judgment debt and making the judgment completely noncollectable.
You need to consider who you are dealing with. Some people are highly litigious and will fight everything. They will hire attorneys who will fight everything, even if it means simply delaying the inevitable. You may feel like you are chasing your tail, and when you finally get your judgment after a great deal of time, complication and expense, you may find there is nothing to collect when you get there.
Keep in mind as well that attorneys cannot guarantee outcomes. Facts often get in the way of success. The inability to prove what must be proven is an obstacle clients do not consider. Proof is ultimately in the eyes of a judge or a jury. Judges and juries do not always see things the way my clients do or I do. Clients often have vulnerabilities that they do not see as they are focusing on the vulnerabilities, wrongdoing, and actions or in-actions of the other party.
In many ways, litigation is like rolling the dice. Some factual circumstances are much stronger (have better odds) than other factual circumstances, but there are always unknowns and variables that impact the ultimate decision. There are things that cannot be predicted, including what goes through the mind of a judge or a jury. While laws are certain, how those laws are applied is an area in which reasonable men can sometimes differ.
For all of these reasons, litigation should be viewed only as a last resort and only after carefully counting the cost. Set the principle of the matter aside. Be objective and be a smart business person in considering how to proceed. A compromise that you control is usually better than a compromise that you cannot control. In most cases, the ultimate decision of a judge or jury is a mixed bag of positive and negative. Clients rarely get everything they want or think they deserve.
I can think of two very prime examples in which I was involved in protracted litigation that went on for days. In both cases I was able to obtain a judgment for my clients, but the judge ruled in the other party’s favor on a defense or a counter-claim that reduced the judgment. In both cases, we appealed, and in both cases, we won on every point on appeal. There was complete vindication on all points, but the cost to get there, through a long protracted trial and then through months of appeal, was in the tens of thousands of dollars. These are considerations that should be factored in.
I am not going to say, “Never go to court.” Sometimes, it cannot be avoided. Sometimes it really is the best option. But, do not say it is not about money, because business is always about the money (and it should be). Do not say that it is only about the principle, because principles do not pay the bills. Keep your business hat on and make good business decisions. The emotional desire for vindication can lead you down a dark ally where you have spent way more money, time and effort than you wished you had, and the principle has lost its shine.Kevin G. Drendel Drendel & Jansons Law Group 111 Flinn Street Batavia, IL 60510 630-523-0543 630-406-6179 fax [email protected] foxvalleyestateplanning.com