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Penny Wise and Pound Foolish

We all know that the phrase “penny wise and pound foolish” refers to people who do things to save money, but end up spending much more because they did not do a simple cost/benefit analysis. I receive many calls weekly from potential clients who, regardless of how much they earn, automatically say they cannot afford a modest retainer to proceed with their case. Others want a “guarantee” that the amount they pay for a retainer will gain them the results they want. I note that when the economy is not doing well, or the media is trumpeting bad economic news or employment figures, or mortgage foreclosures, that people are even more reluctant to spend on legal services, because they consider this to be “optional” versus “mandatory” spending.

Let’s explore the cost versus potential benefits of hiring a qualified law firm to represent you, by viewing the below Example.

Alan is earning $100,000 a year. He has been with his employer for 10 years. Well, ever since he returned from family medical leave after two months for surgery for a condition which was not work-related, he has been criticized for his work performance. That criticism has escalated from verbal to written warnings, and when he contacts me he has just been placed on a performance improvement plan. Alan asks me if I can guarantee that if I contact his employer he will be able to keep his job. When he hears that the majority of time this Firm can be of significant assistance to him, but we can’t guarantee results, he says he can’t afford a retainer. The end result is that Alan is fired, and that his employer alleges that he broke a work rule which led to his termination, and disputes his right to receive unemployment compensation. Alan represents himself at the unemployment compensation hearing and loses. Alan is therefore without a job, without a neutral job reference, without insurance benefits, and without unemployment compensation, all because he did not want to pay a retainer to a lawyer.

What I might have been able to do if we were retained.

I might have been able to allege some form of discrimination and keep Alan’s job for him. I might have been able to secure a severance package for Alan if indeed the employer was intent on terminating him. This package may have included salary, benefit continuation, and sometimes legal fees. I might have been able to have the employer lay him off instead of terminate him for breaking a company work rule. I might have gotten Alan a neutral versus a negative job reference for future employers. I might have gotten permission that Alan can represent that he was laid off or resigned so he can state that on future employment applications without lying. Even if I didn’t get Alan any additional funds, I most likely would have been able to negotiate an agreement which would have permitted him to locate other employment without a black mark on his record.

Can I guarantee that I could have accomplished all of these things? No, but I negotiate these matters regularly and my clients are usually pleased with the results. ALAN WAS THEREFORE PENNY WISE AND POUND FOOLISH. Stay tuned in this Blog for other examples of being penny wise and pound foolish in hiring a lawyer.

By: Faye Riva Cohen, Esquire on her blog “Toughlawyerlady”

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