The threat of litigation on construction projects is real and constant. In the construction industry in general and electrical contracting in particular, litigation is always a possibility on every project. In contrast to the highly detailed and specific documentation found in structural design, electrical designs and specifications tend to be schematic and performance-based. Conflicts in the areas above the ceiling among the electrical, mechanical and plumbing trades are a fertile ground for potential large dollar delay claims. These risks increase exponentially when dealing with complex projects focusing on fire safety, alarms and security design issues. The question is: when is it appropriate to call your lawyer?
In general, you need to call your lawyer as soon as you ask yourself that question. While this answer may look like an advertisement for lawyers, in fact this is the best and cheapest piece of legal advice you could ever receive. The best way to make sure you spend as little as possible on legal fees is to call your lawyer into the situation as early as possible. You are likely to spend far less paying a lawyer if you can avoid a problem before it arises—early in the process. Finally, the earlier you bring a lawyer into the process, the greater the likelihood the lawyer can influence that situation to bring about a positive result.
In most cases, the first and most important documents on a construction project are the contracts. Many subcontractors never have a lawyer review the terms of their subcontracts. The primary reason given is that the general contractor will never adjust the terms of the subcontract, so the legal review is seen as a waste of time and money.
It is true that many large-scale general contractors work with detailed form contracts. These standard form subcontracts are typically weighed heavily in favor of the general contractor and against the subcontractor. Some contractors will not change these terms.
Despite the difficulties in getting a general contractor to change onerous terms of the contract, you should still have a lawyer review the contract before you sign it. You have to know what risks you have on a job before you start the work. You should know what possible negative terms are contained in the contract to reduce potential risks during performance of the contract. Finally, you may be able to get the general contractor to change some of the terms to even the playing field. You do not know whether the contract is subject to negotiation unless you try to negotiate.
I have had many owners, contractors, subcontractors and design professionals walk into my office with a horrible story of how they have been wronged. The story tends to look a bit different when the contract they signed binds them to the harsh result they want to avoid. When reviewing contracts for clients, I always ask them to question the business fairness of anyone who is willing to start a project with such blatantly uneven footing.
Another scenario where you should call your lawyer is during a “problem project.” Every contractor has had a “problem project.” Interpersonal relationships on the job may be rocky and strained. Design changes on the job could be leading to claims for extra expenses which the owner is balking at paying. Even weather delays on the job outside of anyone’s control could lead to increased tensions and heightened scrutiny of performance in other areas.
It is critical that you involve your attorney when you first sense a project heading downhill. For example, you may have potential claims for extras on the project that you have not considered due to delays, loss of productivity, acceleration and the like. You may need to send notices of claims in a timely fashion, depending on the terms of your contract. There may be ways to document your position effectively through correspondence that your lawyer can help you draft during the actual project.
As with contract reviews, too many clients call so late in the process that the attorney’s role is reduced to that of damage control. Clients with potential claims for extensive damages perhaps waived their rights simply due to lack of notice as required under the contract. This is particularly frustrating when the client could have documented such a claim if they were familiar with their own contract terms and requirements. Bringing a lawyer into the process early can end potential litigation before it is even thought of simply through proper and timely documentation. This is far cheaper and quicker than facing a protracted lawsuit after the completion of the job.
So if you ask yourself whether you need to call your lawyer, you do. If you question whether your lawyer keeps bills and expenses in line with your interests and the benefits obtained, then you need to question whether you have the correct legal representation, not whether you need to call a lawyer. Other lawyers may not like the secret getting out, but the fact is you are likely to get better results and pay lawyers far less money in the long run by calling them for assistance earlier in the process.
HUGHES is the principal of the Northern Virginia law firm of Hughes & Associates, P.L.L.C., which specializes in construction litigation, corporate and business related representation and complex civil litigation. He may be reached at firstname.lastname@example.org or (703) 671-8200.