"NOTICE! YOU HAVE BEEN SUED." These are words none of us ever wants to see. However, lawsuits are almost an inevitable cost of conducting business in todays environment. A growing number of real estate professionals in Nevada are becoming involved in lawsuits. Because of the explosion of real estate activities in Nevada, an old, but unfortunately true adage in real estate comes to mind: "there are only two types of real estate professionals... those who have been sued already and those who will be sued." While I am not sure the future is quite that bleak, all professionals should know what their options and responsibilities are once they have been served with a copy of a complaint. More importantly, you should know what you can do to help avoid suits. This article attempts to help give the real estate professional an idea of the process of litigation and the options available should he find himself involved as a party to litigation.

Timing is Everything

All events in the beginning stage of a lawsuit are governed by strict rules requiring litigants to adhere to a timetable. For instance, in Nevadas state courts, a defendant(2)

has only 20 days within which to file an answer(3) to the complaint. Failure to answer within 20 days could result in the court entering judgment without even hearing the defendants side of the story. Obviously, it is important to immediately seek the advice of an attorney. If one waits until 19 days after being served with the lawsuit to obtain an attorney, the attorneys ability to explore all options available before he must answer the complaint is hampered.(4) Therefore, you should immediately contact an attorney after you are served with a lawsuit.

Choosing an Attorney

Choosing the right attorney for your particular problem can be a difficult and time-consuming process. This is perhaps the most important decision you will make concerning your suit -- dont make it lightly. You should begin the process of choosing an attorney in the same way you would choose your familys physician, CPA, or any other professional--talk to friends about their recommendations. Further, no real estate professional should be able to say he doesn't have an attorney. Even if you only need estate planning (and all professionals should have an estate plan), you should form a relationship with an attorney now, rather than trying to find a good one after you are involved in litigation.

After you have obtained recommendations from friends, call each office and ask if the firm has been rated by Martindale-Hubbell, which is a legal directory wherein lawyers are evaluated through a confidential and anonymous peer review system. You should look for counsel belonging to an "AV" rated firm, which means other attorneys have given it the highest scores possible in both lawyering skills and ethics.

After you have narrowed the field through friends, family, and professional publications, interview your prospects. Ask pointed questions to ascertain how much the litigation will cost, how long it will take, and the experience level of the attorney handling your litigation.(5)

Ask whether he bills you on quarter hour or tenth of an hour increment, and what his minimum billing increment is. You should also ask how costs for items such as long distance telephone calls and facsimiles are billed. Expect to be asked to provide your attorney with a retainer, the amount of which will vary depending on the complexity of the matter and the party/attorney on the other side of the matter.

If dealing with a reputable attorney, you will be asked to sign a fee agreement. Do not be insulted; attorneys simply practice what they teach their clients--to get all agreements in writing in order to avoid any conflict in the future. Carefully read the agreement. It will contain important information about how you will be charged, under what circumstances you or the attorney can terminate the relationship, and whether you will be charged interest for any unpaid balance on your account.

How to Save Attorneys Fees

Now that you have chosen an attorney, how do you keep from giving him a blank check? In many ways, you will control the amount of fees. Remember the famous saying attributed to Abraham Lincoln, "A lawyers time and advice are his stock in trade." Every time you or anyone else calls or writes to your attorney, you will be charged for the time he takes to field the call or read the letter. You can save fees by following a few tips:

• Prepare a Detailed Chronology
• Organize Your Documents
• Prepare a List of all Witnesses
• Bring the Skeletons Out of the Closet
• Consider Saving up Questions and Concerns Before Calling Your Attorney
• Ask if There are Matters You Can Take Care of

Prepare a Detailed Chronology, complete with important dates, details of conversations, and correspondence between the parties. Nobody is more familiar with the facts surrounding your case than you. Your attorney may spend hours and hours pouring through documents trying to makes heads or tails of what happened, but you can save time and fees by taking a few moments to provide an outline of what happened and when.

Organize your documents in chronological order and flag those documents which are most important and which tell your side of the story. If you want, you can highlight important sections of documents, or refer to them in your chronology. Give your attorney all documents, even if you dont think they will be helpful, because your attorney has an obligation to give the opposing party a copy of all documents which may be relevant. I have had too many clients hold documents back, thinking they weren't important, only to find out later (many times when it is too late) that the documents contain the proverbial "smoking gun." Dont forget to include any notes or even doodles you created while talking on the phone with anyone involved in the suit. Believe it or not, I was once involved in a lawsuit where the clients doodles/notes he took while on a phone conversation with another party proved to be the most important piece of evidence at the trial.

Prepare a list of all witnesses. List all people who have or could have knowledge about any portion of the lawsuit. Provide their names, employers, positions, addresses, and phone numbers. It is better to give more information to your attorney than less. You may even want to give your attorney a short written narrative about what each person may know, may have witnessed, or told you about an event.

Bring the skeletons out of the closet. If you have something to hide, assume somebody will find it, because they probably will. You will only hurt your own cause and end up costing yourself more money when you try to keep damaging information away from your attorney. Armed with knowledge of your weakness, your attorney can fortify your position against an attack. There is nothing worse to an attorney than being blind-sided at trial with information his client didn't disclose because he thought nobody would ever find out.

Consider keeping a pad of paper on which to write ideas, questions, and concerns about your lawsuit. When you have a few of them written down, call your attorney or set an appointment to see him. Once you have his undivided attention, discuss all the matters on your list until you are satisfied. If you dont use this method, you may find yourself calling your attorney 4-5 times a day and you may be charged for 4-5 calls at the attorneys minimum billing increment instead of for one conversation.

Ask if there are matters you or your staff can take care of many times a client can obtain information, run errands, or perform document gathering and organizing tasks which will advance the cause of the lawsuit and save himself money. Dont be afraid to tell your attorney that you are concerned about fees and want to handle some ministerial matters yourself

Alternative Dispute Resolution

When people are attacked, the natural reaction is to attack back. While competent trial attorneys are well equipped to attack the other side for you, a wise attorney will also step back from his role as an adversary and counsel you regarding your settlement options. In doing so, he is not necessarily telling you he doesn't believe your side of the story. Rather, he is trying to get you, the astute businessperson, to make a smart business decision which considers only your bottom line, and not the emotion of the lawsuit or who is right and wrong.

Lawsuits typically take one to four years to get to trial. Unless you can afford to have an attorney on your payroll for that period of time and dont care about how much money you spend, you should always consider settling. Unfortunately, that may mean paying the other side some money even though they are the ones who wronged you. Why in the world would you do that? Because it may be the right decision to make from a strictly business perspective. You may end up paying this person something after a trial anyway.(6) Paying some money now saves you attorneys fees and the possibility of larger exposure in the future. After being hammered by a judge until the parties to one lawsuit settled, the judge slapped me on the back, noted that neither side was happy and therefore proclaimed it a good settlement, saying, "A bad settlement is better than a good judgment at trial." Unfortunately, for many cases, he was right.

Even before answering a lawsuit, I advise my clients to explore alternatives to litigation for solving their dispute. Ask your attorney about the alternatives which are available. In some cases, it may be appropriate for you to talk to the person who is suing you in an attempt to resolve the matter without having to pay for an attorney.(7) You should also encourage your attorney to try to negotiate a resolution with opposing counsel prior to filing the suit.

If these methods are not successful, you can explore mediation or arbitration. Mediation is a confidential process where a neutral party will attempt to get each party to see his or her own relative weakness, and who ultimately attempts to help the parties reach a compromise. Arbitration is a process where the parties hire an experienced attorney or other professional to hear the arguments of each side and make a decision outside of court. Arbitration can either be binding, or non-binding. These alternative methods can and should be explored at every step of the litigation.

Ready, Get Set, Litigate!

If all attempts to resolve the matter have proved unsuccessful, you be forced to move forward with litigation. Clients have told me that their lawsuit consumed them for years while it was pending. They found themselves thinking of nothing else, and reported that it was the most miserable experience of their lives--and this is from clients who ultimately won their suits.

Without a doubt, it is an expensive and frustrating process. The client just wants to get into court to have his story heard, but the court probably wont hear the trial for two to four years. The opposing attorney is typically less than pleasant and has made it his mission to destroy you. You will be told where to be, what to do, and what information about your private life you have to divulge by your attorney, the opposing attorney, and the judge. In short, it is not for the faint of heart. This frustrating and expensive process can be made less so, however, if you obtain competent counsel and follow the steps outlined herein. Even so, "Notice, you have been sued" are words none of us ever want to see.

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1. Mr. Young is a partner with the Las Vegas law firm of Marquis & Aurbach. His practice concentrates on civil, business, and real estate litigation. Mr. Young can be contacted at 228 South Fourth Street, Las Vegas, Nevada, at (702) 382-0711, or at www.marquisaurbach.com

2. A person filing a suit is called the plaintiff, while the one being sued is called the defendant.

3. A formal response to each allegation contained in the complaint.

4. The male pronoun is used for ease and consistency throughout this article and is not meant to imply a preference for the male gender.

5. Unless performing services on a flat fee or contingency fee basis, no attorney can predict the exact cost of litigation during an initial consultation. The cost will vary depending upon the aggressiveness of the opposing party and its counsel, how many other parties are involved, how many motions are filed in the matter, how many witnessed need to be interviewed, the complexity of the facts, and the number of documents which will or could be used as evidence. Any quote will necessarily estimate the cost based upon known variables at the time of the consultation.

6. Almost no case is so airtight that you are guaranteed to win at trial. Taking a matter to trial involves the risk of not only losing your case, but having to pay the other party and his attorney as well.

7. If you have retained an attorney, seek his advice before talking to another party to litigation.