The Practice of Law

On the Outside Looking In

Susan and Bob are unhappy spouses who own and operate a business. Sue enacts some resolutions to remove her husband as a director and officer of the corporation. Then she goes to the office before business hours, changes the locks, tells Bob that he is fired, and hires a security guard.

Bob shows up for work and is refused entry. He calls the police. The cops come and tell him that they are just there to keep the peace, which they will do by preserving the status quo.  Since Sue is on the inside, she gets to stay there. As Bob is on the outside, he has to stay there.  

The police tell Bob if he persists in his efforts to gain access to his own business, they will arrest him, and if he does not like the situation, he should hire a lawyer and go to court.  Maybe the resolutions which Susan passed are valid, and maybe they are not.  All of that will be sorted out eventually, but in the short term at least: Advantage Susan.

Mike and John are shareholders of a private company. They hate each other. They sit down one Friday and negotiate. They agree that John will buy Mike out, their respective accountants will meet and settle the price, the deal will be closed within a week or two, and Mike will stop working at the business immediately.

Mike sees his lawyer on Monday. His lawyer is a brilliant fellow named Murray. Murray tells Mike that he has made a colossal mistake by agreeing to stop working prior to being bought out, and that he should immediately go to the plant and tell John that he will continue working until a formal agreement is signed.

Mike goes to the plant and finds out that on Sunday John tore down the walls of Mike’s office and disposed of his desk. There is nowhere for Mike to work. Mike goes home. Since Mike is no longer there, John suspends Mike’s salary, makes many changes to the business, and produces a multitude of reasons that the purchase price should be reduced. No agreement is reached for a very long time. Maybe John’s actions are actionable and maybe they are not. That will be sorted out eventually, but in the short term at least: Advantage John.

Yes, both Bob and Mike could commence legal proceedings. But that costs money and comes with risk, and neither Bob nor Mike has income to fund those fights. They will both negotiate from a position of weakness.

We have all heard the saying that “possession is 9/10 of the law.”  It is absolutely true.  Law schools are not great at teaching this very important ‘non-legal’ principle.  It takes most lawyers a while to figure out that having legal rights is nice, but being in control is often much more important.

New lawyers might be surprised to find out that knowing the law will only take them part of the way toward being a great lawyer. They also have to learn how to think strategically. Students and junior lawyers need to seek out senior lawyers to help them learn how to bridge the gap between the classroom and the real world.

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