Kegler Brown • Construction Law Newsletter

February 2007

In This Issue

"Oops, I Forgot to Read the Release!"
Debunking the Top 10 Myths About Picking a Lawyer
Firm News

"Oops, I Forgot to Read the Release!"

Donald W. Gregory,
Construction Law
Chair

Pay requests and partial lien waivers in the past were traditionally fairly straight forward, brief and only designed to acknowledge the receipt of partial payment and the waiver of lien rights through that point in the job. However, more and more pay requests, change orders or lien waivers have been drafted with broad release language designed to trap the unwary.

For example, a pay application might contain wording that releases all claims for work performed prior to the pay request and the contractor or subcontractor may inadvertently waive pending change order requests or accrued retainage.

Another example is when a change order contains wording that all direct and indirect costs associated with the change order issue are extinguished or released, but the contractor is only being compensated for direct "hard costs" associated with the change. This wording typically excludes any subsequent claim for "soft costs" like inefficiencies, extended general conditions or a time extension, or the cumulative impact of multiple change orders.

Similarly, lien waivers can be broadly drafted to release all lien rights on a project, including work yet to be performed. Contrary to popular belief, this type of waiver of lien rights (in advance) is enforceable in Ohio.

These developments mean that contractors and subcontractors should carefully review non-typical (i.e. non-AIA) documents closely and should be careful to reserve rights to issues or compensation that are not intended to be extinguished at that time. AIA change orders and payment applications do not contain releases and therefore are favored for these purposes.

Otherwise, contractors and subcontractors will need to modify the documents to reflect the true intent of the parties.

Debunking the Top 10 Myths About Picking a Lawyer

Potential clients sometimes select lawyers and law firms for the wrong reasons. Here are my top ten myths about picking a lawyer.

1. Bigger is better.

Not always. If you are a small or modest sized client at a big firm or a big client at a modest sized firm, where do you think you are more likely to receive better service?

2. Size doesn't matter.

This may be true as to modest matters, but large complex disputes frequently require a sizeable firm with resources and expertise not frequently found within smaller firms.

3. Go with the lower hourly rate.

Those that favor the lowest price will get what they pay for. Lower rate means nothing if the less experienced/specialized lawyer takes more time to solve a problem that could have been solved in less time by a more experienced lawyer with a higher rate.

4. Find the silver bullet.

Clients often think that by hiring the "latest and greatest," their case will suddenly become easily winnable. Sadly there is no super-lawyer or "silver bullet" that can guarantee a win. The truth of the matter is that no individual lawyer, no matter how skilled, is going to make a difficult case easy, and there are probably plenty of lawyers knowledgeable in that area who could handle it well.

5. Go for the gray hair.

While the judgment that comes from gray (or no) hair is often beneficial, you may want someone who is interested in working hard to establish their reputation, rather than one who made theirs decades ago.

6. Pick a fighter.

Many clients want to hire an obnoxious bulldog, thinking that one must be super-aggressive to get results. Yet the most successful lawyers are those who build relationships and know "when to hold them and when to fold them." Lawyers like to resolve matters with other lawyers who are reasonable and trustworthy. Hiring a "bomb-thrower" will often yield a poor net result after payment of fees in a protracted battle.

7. You don't want to hire a lawyer that represented the other side.

The best way to be able to judge a lawyer is to see the lawyer in action. If you liked what you saw from the other side's lawyer, you will likely appreciate it much more if he is representing you the next time. The best compliment is being hired to represent "the other side" in their next case after they witnessed your work firsthand.

8. I expect my lawyer to be immediately responsive.

If a lawyer is able to be immediately responsive then it means the lawyer has no other clients or demands on his time – neither of which is a good sign.

9. Find a lawyer with a personality like you.

Part of what you are paying a lawyer for is judgment and advice. If the lawyer is simply an extension of your personality, you are perhaps not receiving counsel from a different and refreshing perspective. For example, a fast-moving risk-favoring entrepreneur may benefit from counsel provided by a conservative risk adverse lawyer.

10. I don't want to pay for a fancy office and overhead.

Neither do most lawyers, but it is expected that with success come the trappings. Good lawyers have nice offices, period. If they don't, you and other clients will wonder about how successful they truly are.

Hiring a lawyer is a very personal decision. Hopefully by debunking a few myths, you can make a better decision about selecting the right lawyer for you.

Firm News

Don Gregory has been recently recognized by: Best Lawyers in America 2007; Ohio Super Lawyers 2007; and Who's Who in International Construction Lawyers 2007 for his practice in Construction Law.

Don Gregory and Mike Madigan will be speaking to the American Subcontractors Association Central Ohio Chapter on February 21, 2007, on how to best handle Article 8 claims. Eric Travers presented a Lorman Seminar on "Construction Law from Contract to Close-Out" on January 31, 2007.

Credits

Kegler, Brown, Hill & Ritter's Construction Law Newsletter is prepared by the Construction Law practice group.

To subscribe to any Kegler Brown publication, please use our Subscribe Form. To unsubscribe from any Kegler Brown publication, please use our Opt-Out Form. This publication, as well as an archive of previous publications, is also available from our Publications Archive.

The Construction Law Newsletter is designed to provide general information about the subjects discussed. It is not meant to be all-inclusive or comprehensive. Kegler Brown is not rendering any legal or professional advice by way of this publication.