In the first draft of this post, I set out as a fact that I had a question which would stump 95% of all lawyers. My wife read the draft and said that I was wrong. There is nothing unusual about that. I am wrong plenty and she is quick to notice when I am.
Bob, Ted, Carol, and Alice own a company. They have a shareholder’s agreement. The only divorce mechanism is a right of first refusal (“ROFR”).
Bob wants out. He goes to Ted, Carol and Alice and asks them to buy his shares. They refuse. They tell him to use the ROFR.
When I was young, so much younger than today, I completely bought into the fairy tale that the best and brightest lawyers are all at the large law firms and that everyone else is just not that good. After all, they practically teach you that at law school, although they never quite say it aloud, so I imagine that they have plausible deniability.
My father had a rocky start to his career. There were many years at the outset of his working life when he did not make much money and struggled to pay his bills. When creditors would call, he would explain to them about the payment hat. He would tell them that once a month he turned his fedora upside down and put all of his monthly bills in the hat. He described how he would then mix the bills up and pull them out and pay them until the money ran out.
Finally, he would warn the creditors that if they kept calling him and annoying him, their invoices were not going into the hat.
Many years ago, Maurice called me to complain about a legal bill that he had received. Fortunately, it was not me who had drawn his ire, although I was his primary legal counsel.
Maurice’s accountant had convinced him to go to a meeting with Peter, a very sophisticated tax lawyer, to discuss something called the ‘Quebec Shuffle.’
I have been known to be critical of large law firms. Not today. Say what you will about Big Law, at least large law firms are smart enough to hire professionals to manage their businesses. For that reason, I am going to leave them out of today’s rant.
Instead, let me turn my wrath on small and medium sized legal practices. You know, the ones typically headed by a few brilliant legal minds who are way too intelligent to need help from people with real business expertise.
Back in the 1990’s, the Standard Chartered Bank out of the UK opened a subsidiary in Canada called the Standard Charted Bank of Canada and set about making commercial loans.
One of the Bank’s customers was a client of mine who I will call Sol. Sol had a line of credit for his business of about $3,000,000, back when $3,000,000 was a lot of money.
Since I moved to the country after spending most of my life in the big city, I fashion myself as something of a country type. I drive a pick-up truck and I listen to country music. So, it should come as no surprise that I am drawing inspiration for this story from Johnny Cash who proudly proclaimed that “I Walk the Line.”
There are two rules which young lawyers have to learn to be successful. Strangely enough they do not learn either of these rules in law school.
Luckily, they have me to fill in this gap in their education.
Near the end of my career, at a time when I frequently congratulated myself (since no one else would listen) about how brilliant I was at dealing with clients, I lost a long-standing client who I will call Charles. I should have fired Charles years before and was holding onto for some twisted sentimental reason.