Attorneys and Recruiters Archives

“Lawyer on Contingency Fee?” – Who “Swallows” the Expenses?

Published on June 4th, 2019 by Alan L. Sklover

Sklover Working Wisdom Law Justice Scale

 
“Be careful who you trust – The devil was once an angel”

– Unknown

ACTUAL CASE HISTORIES: Wendy hired an attorney to represent her in a lawsuit against a former employer. Her agreement with the attorney said that attorney would represent her on a “contingency” basis, meaning that the attorney would be paid only if the lawsuit was successful, and then he would be entitled to 1/3 of the proceeds.

The lawsuit was settled for $90,000, and so Wendy expected that she would receive $60,000 (that is, 2/3 of $90,000), and the attorney would get $30,000 (that is, 1/3 of $90,000). It turned out that the lawyer got his $30,000, but Wendy only received $40,000. How come? The other $20,000 went to pay the expenses of litigation.

Les also hired a lawyer to represent him in a lawsuit against his former employer. He also agreed to a 2/3 split for Les and 1/3 split for the lawyer. The case was, unfortunately, dismissed in favor of the employer. So, the lawyer got nothing, and Les got nothing . . . but Les did receive something a few weeks later: a bill for $25,000 for the expenses of the lawsuit. How come? That is what the attorney’s retainer provided for, unbeknownst to Les. Les even lost money on his “contingency fee” case.

In both cases, each of the lawyers’ retainer agreements provided that the client was responsible for the expenses of the lawsuit, whatever that came to. Sad, because it might have said something different if Wendy and Les had noticed it, and asked to change it.

“Clients beware.”

LESSONS TO LEARN: In any relation involving money, it is important to the success of the relation to enter into a clearly written and fully understandable agreement on all of the terms and conditions of the relation. Nowhere is that more important than in the attorney-client relation.

A lawyer’s retainer agreement is a contract, and should be no less clear and no less understandable than any other contract; maybe more so, especially if they anticipate lawsuits, which can be heavily burdened by costs and expenses.

“Contingency Fee” means “A fee comprised of a percentage of payments received, if any.” While you might think that it suggests “payments received after expenses are taken off the top,” it does not say that. It says nothing at all about costs and expenses.

Costs and expenses of a lawsuit commonly include: (a) Court filing fees; (b) process server fees; (c) expert witness fees; (d) Court reporter costs; (e) photocopying costs; (f) messenger and postage costs; (g) costs related to obtaining medical, government and school records; (h) transcript costs; and lots, lots others. In some cases, they end up being in the many tens of thousands of dollars. And, as noted above, if you lose your lawsuit, you just might also have to pay your employer’s legal costs. BIG OUCH!!

The need to raise – and clarify – this issue early on is important. So many clients get mentally and emotionally distracted in the process of hiring legal counsel; others get intimidated. This particular point often gets lost in the process, but is an important one to focus on before the onset of the attorney-client relation.

WHAT YOU CAN DO: When hiring an attorney, make sure you understand the attorney’s retention agreement. Especially if you are considering hiring an attorney on a “contingency” basis, make sure you understand who “swallows” the expenses. Don’t just focus on the possible amount of money to come your way; focus, too, on the amount of money that may leave your wallet, related to expenses.
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Human Resources . . . Employee Relations . . . What’s the Difference?

Published on February 26th, 2019 by Alan L. Sklover

Sklover Working Wisdom Controlling Company Risks

Question: Recently, a female colleague reported to my Department Head that she felt she was being harassed. I received an email from someone in “Employee Relations” asking that I meet with her to be interviewed as part of an investigation.

What’s the difference between Human Resources (“HR”) and Employee Relations (“ER”)?

She said she is a lawyer, but that she does not represent my employer. Could that be?

Jessica
La Vergne, Tennessee

Answer: Dear Jessica: Your question is a very common one. It is wise of you to ask this question because it is always prudent, before you speak with someone about something that may be important, that you try to understand who they are, what they seek, and what their interests may be in speaking with you. Here are my thoughts:
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The Bill O’Reilly Debacle – Its Most Important Negotiating Lesson for Employees

Published on May 2nd, 2017 by Alan L. Sklover

 
“Without accountability, we cannot expect responsibility.”

 

From each and every event and circumstance, we can take away important lessons to guide our future actions. Some are obvious, others not. Some are important, others not. Bill O’Reilly’s recent contract termination by Fox News – despite his stellar ratings and very significant contribution to its revenues – offers one lesson for working people that, I believe, stands out among others. And, oddly enough, it has little to do with whether or not Mr. O’Reilly was “guilty as charged.”

This newsletter is less a “letter of news” than it is an observation on a societal change, and employees’ need to consider adapting to address change, in this order:
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Fired Compliance Officer Strikes Back – Is Awarded $51 Million for Doing So

Published on March 15th, 2016 by Alan L. Sklover

“In a room where people unanimously maintain a conspiracy of silence,”
one word of truth sounds like a pistol shot.”

– Czeslaw Milosz

ACTUAL CASE HISTORY: John Slowik, the former Chief Compliance Officer of Olympus America, Inc., the largest distributor of endoscopes in the U.S., discovered that his employer was paying bribes to win new sales. When he reported this to his employer, he learned the meaning of the old saying, “Tell your boss the truth, and the truth shall set you free.” Simply put, first he was retaliated against and, soon after, he was fired.

Slowik had discovered that Olympus was obtaining sales by giving away free medical equipment, paying for luxury vacations for physicians and their families, making hundreds of thousands of dollars in cash payments to physicians masqueraded as educational grants, lavishly wining and dining physicians, and paying exorbitant consulting and speaker fees to physicians. And, just as you might imagine, many of these payments were paid by you and me by means of higher prices paid by Medicare and other publicly funded insurers.

Slowik retained legal counsel experienced in employment law, who understood the gravity of what Slowik had reported. Slowik then sued Olympus based on allegations that the company had violated a federal law known as the “False Claims Act,” and a second federal law known as the “Foreign Corrupt Practices Act.”

Slowik had worked for Olympus for 18 years, starting as a finance manager, and through a series of promotions, in February, 2009 was appointed Olympus’s first-ever Chief Compliance Officer. He had no healthcare compliance background, and had only one employee, who also had no compliance background.

After Slowik sought to eliminate these systematic illegal practices, (i) his complaints fell on deaf ears, (ii) he was told to back off and instead “work around the rules,” (iii) his duties were diminished, (iv) his reporting line was lowered to the Head of the Ethics Department, (v) his compensation was frozen, (vi) he was increasingly isolated from others, and (vii) he was evaluated as a poor performer. Finally, (vii) he was terminated for poor performance.

To resolve Slowik’s lawsuit against Olympus, which even resulted in federal criminal charges against the company, Olympus agreed to pay fines and penalties to the U.S. government of $646 million, out of which Slowik was awarded $51 million.

In addition to the required payments, in order to avoid criminal prosecution, Olympus also agreed to:

  • Hire an experienced Chief Compliance Officer, who will be a member of senior management, and report directly to the Board of Directors;
  • Make the Chief Compliance Officer position not subordinate in function or authority to the General Counsel;
  • Expand the Compliance Department from one full-time position to 19, and fund it appropriately;
  • Engage independent third parties to conduct risk assessment targeted to compliance risks;
  • Implement an anonymous reporting hotline, and
  • Begin compliance training for all employees.

What happened to Slowik was a truly classic example of the treatment afforded so many Compliance Officers who raise sensitive issues of non-compliance with rules, regulations and laws. Often, there is just too much concern in the minds and hearts of management for the financial consequences of “playing by the rules.” How ironic it is that Slowik was fired for poor performance; in the end, he did quite a good job improving Olympus’s compliance organization.

Slowik’s whistleblower complaint did a great service for Olympus. But did it have to be so expensive for Olympus and so damaging to its relations and reputation?

LESSON TO LEARN: What happened to Slowik vividly illustrates an important point for all Compliance Officers, and for all other employees, as well: there are more ways than are commonly thought of to achieve true compliance in the workplace. In addition to “internal efforts,” the many state and federal so-called “whistleblower” laws stand ready to assist.

Can a fired Compliance Officer make use of the many whistleblower laws? Sure. Can a Compliance Officer do so if he or she is still employed? That is a great question, from both legal and ethical perspectives. I believe the answer is surely “Yes,” because in the end, the shareholders’ interests are aligned with the corrective purpose of whistleblower laws, and surely out of alignment with those who act – supposedly on shareholders’ behalf – in violation of applicable laws and regulations. And, too, the larger societal interests are best served by enactment of rules, and the observance of those rules.

Do we need all these rules and regulations? Do we need all these whistleblower laws? Considering Olympus’s and John Slowik’s experiences, apparently we do. Surely, the Olympus story offers a cautionary tale to other endoscope manufacturers, and others, as well, who might be tempted to “throw a party” for physicians at the public expense.

WHAT YOU CAN DO: Keep in mind that efforts to gain company compliance with applicable laws and regulations are not limited to working internally. The many whistleblower laws and programs that exist do “have your back.” Here are seven thoughts to bear in mind:
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Ten Very Goofy Things Employment Lawyers Tell Clients

Published on December 15th, 2015 by Alan L. Sklover

“The trouble with the legal profession is that 98% of its members
give the rest a bad name.”

– Author Unknown

ACTUAL “CASE HISTORY”: For many years, I have spent a large amount of my time working for, with, against, alongside and in connection with other lawyers. Based on those decades of experience, I can attest to the truth of the saying that “Absence makes the heart grow fonder.”

No, of course, lawyers are not all bad people. For example, many are good parents and wonderful contributors to the betterment of humankind. But in their profession, they often tend to have their own special “way” about them.

Here are ten very goofy things I have heard many employment lawyers tell employees that are, to be polite, just plain dumb.

If you consult legal counsel for a problem or opportunity at work, and hear one or more of these things said, my advice to you is “Head for the door.”

LESSON TO LEARN: It is best to take both advice and medicine as little as possible, with your eyes “wide open,” and with an understanding that you must never stop thinking for yourself.

WHAT YOU CAN DO: Here they are:
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Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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