Recently I gave employers five tips on how to keep your legal bills down and help your lawyer present the best case for your business. Here are five more:
6: Protect attorney-client confidentiality
The attorney-client privilege protects the confidentiality of conversations, meetings, emails, and other communications between you and your lawyer, when you are seeking or receiving legal advice. For example, I can’t be asked about the timeline I asked you to prepare to help me in representing you, and you can’t be asked about the legal advice I have given you.
The privilege applies to written and oral communications, but it can be lost if the information is shared with third parties or employees who aren’t involved in the matter. DO NOT discuss the merits of the case or any legal advice with friends, relatives, or neighbors! If you do, not only can the privilege be lost, but your friends, relatives, and neighbors could be subpoenaed to testify about what you told them.
7: Keep in touch
You must keep your attorney informed of any developments in your case, and your attorney should be keeping you informed as well. My regular practice is to send my clients copies of all incoming and outgoing emails and correspondence, as well as drafts of substantive documents for review and approval.
8: Ask questions.
If you don’t understand what’s going on, or the legal terminology baffles you, speak up! And please don’t feel bad about asking questions. Lawyers do this stuff every day; you don’t.
9: More on settlements
Typically, an employee (or former employee) wants money to drop his/her claims. However, s/he might ask for something else, such as reinstatement, promotion, removal of documents from his/her file, continued health insurance benefits, outplacement assistance, a letter of reference, or that training be provided to management.
In exchange for paying the settlement amount and agreeing to any other settlement terms, you should get a complete dismissal of the case and a release stating the employee won’t sue the company or its officers or employees. Typically, the employee must keep the amount and terms of the settlement confidential.
What makes a settlement “good” depends on the facts of your case, of course, but there are a few things to keep in mind. You will have to balance your lawyer’s estimate of the costs of litigation and the likelihood of success or failure. Any portion of a settlement that represents wages is treated as taxable income, and you must withhold NJ and federal taxes from the settlement amount. For the balance of the settlement amount, you will issue a 1099-MISC to the employee and/or lawyer, so that income will be reported and taxed, as well. (The only exception is for payments for physical injuries—no tax due on them.)
10: Listen to your lawyer!
You’re the expert on your business, but you’re paying your lawyer to provide you with advice based on her experience and knowledge. As I routinely tell clients, “I’m giving you the odds, but they’re your dice.” In making any decision, you should balance and consider legal issues, business needs, and your personal and corporate values. You don’t always have to agree with your lawyer, but please consider carefully all the advice your attorney gives you when you’re deciding on strategy and trial tactics.
