I recently observed a transaction from afar. It was the sale of a small retail shop – a tiny deal for a few hundred thousand dollars. The seller was getting out because they had to. There was not a tonne of money to go around.
The biggest problem for the seller was obtaining the landlord’s consent. I could write a small novel on how the landlord and their counsel approached the transaction, but there is not much to tell that any commercial lawyer would find unusual. The landlord had some valid concerns, but rather than address them in a practical and constructive manner, they asked for the sun, settled for the moon, and made the seller pay for the legal fees. Of course, the legal fees were way higher than they would have been had the landlord acted in a commercially reasonable manner. But what the hell – someone else was paying the legal fees, so why not try to get away with whatever you can?
None of that troubles me. It is, unfortunately, the way that the game is played in the big city where people feel anonymous and do not have to account for their actions to friends and neighbours.
What does bother me is that a senior partner at one of the largest law firms in Canada handled the transaction for the landlord and played these games at an hourly rate that I can only guess, based on the final fee, was close to a thousand dollars.
Had the law firm used a mid-level associate who played this straight up and just asked for what was reasonable and then sent a document that reflected the discussion, the fee should have been a third of what it was. But hey, the client wasn’t paying, so who cares?
The result was that the landlord got way more than they were entitled to, their lawyers charged triple what was reasonable, and the small business owner to whom every dollar really mattered, got “taken advantage of.” (My editor said I could not use the word that I wanted to use.)
And then we wonder why, according to Dr. Google, lawyers rank nineteen places below Paramedics and just above Radio and TV Hosts in the list of most trusted professionals.
Seriously, folks. Is this really how the game should be played?
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.