A lawyer advising clients on how to reduce legal fees? Isn't that like the fox advising the chickens on security? Well, it is true that my colleagues and I do benefit from the legal fees that boards incur, but we also believe it is far more important to build long-lasting relationships with our clients than making a big fee and then getting replaced. In many cooperatives and condominiums, the attorney holds the institutional memory for the organization because, over the years, the board and management change. With that in mind, here are some suggestions to keep legal fees and expenses under control.
1. The Board Should Not Be Paying to Educate the Attorney
Many boards have wonderful, longstanding relationships with attorneys and send them all the legal issues that arise. However, not every attorney has experienced every issue. If a board faces a situation and the attorney has not dealt with anything similar, there will be a steep learning curve. That should not come at the board's expense. If your attorney has not dealt with a similar issue, ask if someone else in the office has and could handle the matter. You can also consider referring that particular matter to a law firm that does have experience in the area. Using another attorney for a particular matter does not mean that your relationship with the old attorney has to end.
As an alternative, ask your attorney to bill the start-up time at a discount.
2. Don't Micromanage the Attorney
Several times I have seen the board members or the managing agent call the attorney daily to discuss the status of the matter and to offer suggestions and to cross-examine him or her on how the matter is being handled. This adds significantly to the cost of performing the legal work because, as we all know, attorneys bill for those telephone calls.
For instance, when I was handling a very complex matter for a co-op, the managing agent called me every morning at 8:45 to harangue me about the legal system and ask why things took so long. This went on for months and did not speed the process by a single minute, because judges decide motions at their own pace and never like having lawyers call them and demand a resolution. Sometimes, things are made worse when the board has a member who is also a lawyer — but who does not specialize in co-op and condo law — and believes he or she can be helpful. It does not always turn out that way.
3. Appoint a Legal Liaison
There is nothing more important that having a single point of contact between the board and the lawyer. It is a waste of time and money if multiple members of the board have access to the attorney. Each duplicative call will be billed separately. Moreover, over a relatively brief period of time, the lawyer and the liaison will develop a rapport, which will reduce the time being billed because each will be up to date with the history of the matter.
4. Listen to the Lawyer
If your attorney responds to an inquiry by noting that it is forbidden to do something based on the language of the proprietary lease, bylaws, or declaration, then it its not productive to beg or to demand of the lawyer that he or she not object to this thing being done. These documents are written in English — or at least legalese — and they are decipherable. Ask the lawyer to point out the specific language that creates the objection and review it yourself to see it you agree with the interpretation. Then, if you don't, call the lawyer to see why he or she believes that it says what you don't think it says.
5. Do Not Reject a Buyer without Discussing it with a Lawyer
Notwithstanding all the rhetoric we hear from politicians about all the buyers being rejected by boards, the actual number is small. Nevertheless, cooperatives have been scapegoats for the limited availability of affordable housing in this city. Don't open yourself up for aggravation by rejecting a buyer without first discussing your reasoning with your lawyer. Sometimes, what the board will consider to be legitimate grounds can be reinterpreted by a human-rights official as having an appearance of discrimination.
If you are going to reject someone who is a member of a protected class, make extra certain that there is a solid reason for the rejection. If a discrimination claim is filed, the burden of proof will be on the board that it did not discriminate.
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?