Choosing an Attorney 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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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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“Work in New Jersey; employer in Massachusetts. Which state’s lawyers can help me?”

Published on May 14th, 2013 by Alan L Sklover

Question: Hi, Alan. I was terminated by a company here in the U.S. that is based in Massachusetts. I live in New Jersey and have worked out of my home office from the beginning I am currently negotiating a settlement.

If I need a lawyer, how do I determine if they should be from Massachusetts or New Jersey?                                                                                                

Morristown, New Jersey

Answer: Dear D.M.: Your question is quite common, increasingly so as people increasingly work distant from the their employers’ headquarters. Unfortunately, as you will see, the answer to your question is not as simple, clear and definite as you might like. But you asked, so here is the answer:            

1. As a general rule, you will likely want to hire an attorney who is familiar with the laws that are applicable to any issues that now exist (or may arise) in the course of your discussions and negotiations. Simple common sense would suggest that you would be wise to use an attorney licensed in Massachusetts if the issues in your negotiation are ones that require analysis under Massachusetts law, and the same goes for hiring a New Jersey lawyer to resolve legal issues of New Jersey law. 

Unfortunately, that simple, common-sense approach is often quite difficult to follow and does not really apply to severance or settlement negotiations, as will be further explained below. 

2. The laws that apply to any issues that might arise in your severance negotiations may be determined by an agreement you signed. Quite often, employers say to themselves, “Let’s make sure that if any employee takes us to Court, or gets into a legal hassle with us, it is our home state’s laws that apply, because this is where our lawyers are and they are most familiar with this state’s laws.” 

For this reason, it is common for employers to write into their employment-related documents, including (a) employment agreements, (b) job offer letters, (c) bonus agreements and plans, (d) stock and stock option agreements and plans, (e) retirement plans, and even (f) employee handbooks that “Any and all disputes that arise between the employer and the employee will be decided under the laws of the state where the employer’s corporate headquarters or home office is located,” or words to that effect. 

Thus, issues that arise related in some fashion to those documents would be resolved under the state’s laws that is noted in the document, and a lawyer licensed to practice in that state would likely be most familiar with that state’s laws.  

3. However, even if you signed an agreement like the one described above, the laws that apply to any issues that exist may be determined, instead, by the laws of the state where you worked. Most states have laws that provide that, if the employee worked in their state, certain issues arising in that employment relation must be decided under that state’s laws, no matter what agreements may have been signed. 

This started a long, long time ago, when the individual states became associated with each other as the United States. The idea was that each state is free to set standards for certain conduct within its own borders, and in the employment context those state standards include: (a) whether you need a license and a supervisor to act, for example, as a mortgage broker, (b) what workplace safety standards must be met by construction-company employers, (c) whether you are entitled to be paid for accrued but unused vacation days if you resign or are terminated, and (d) what the minimum hourly wage may be that is paid to workers. These “state-standard” laws vary considerably from state to state.

 So, an employee working in New Jersey, who believes she is due (a) payment for accrued but unused vacation, and (b) was also denied the legal minimum hourly wage, can file a legal claim using New Jersey law against an employer headquartered in Massachusetts, even if she signed an agreement that said, in effect, “I promise to use only Massachusetts law to resolve any and all disputes.”    

4. To further complicate matters, it is quite possible that the laws that apply to any issues that might arise in your negotiations may be federal laws, which would make which state your lawyer was licensed in entirely irrelevant. As an example, the primary laws that affect entitlement to overtime pay anywhere in the United States is the federal Fair Labor Standards Act (commonly known as “FLSA”). 

If the issues that arise in your settlement negotiations arise under or are related to FLSA, it would not matter in what state in the U.S. your lawyer was licensed to practice. So long as he or she was licensed to practice law, he or she could advise you on issues related to these laws, and with certain technical requirements met, could appear for you in any Federal Court. 

5. And – hold onto your seat – the issues that exist in your settlement negotiations may be those of (a) New Jersey law, AND (b) Massachusetts law, AND (c) federal law, all at the same time. D.M., it has happened to me many times: I am licensed to practice law in New York, I am assisting a client who worked in Texas, the company is headquartered in Connecticut, and then I discover that some of the issues involve Illinois law, as well.  

What an attorney does in these circumstances is to (a) try first to figure out what laws, IF ANY (see below) are applicable to the matter at hand, and (b) then determine whether he or she needs to consult a “local” attorney to assist on that issue. Frankly, it is not usually necessary.  

A few years ago, I was representing a man working in the African country of Namibia (the country immediately north of South Africa), and I had to determine how much notice, if any, was required to be given to terminate an employee. I contacted a Namibian attorney, luckily for  me who spoke English, and conferred with him on that particular issue. I have done that same thing in states all over the U.S. and in countries all over the world.    

6. All of these confusing and at times contradictory issues aside, it usually does not matter: an experienced severance attorney from either of those two jurisdictions, or any other jurisdiction for that matter, should prove just fine. I say this because in severance negotiations, most of the issues that require negotiation are truly “business” issues, not necessarily “legal” ones. Even as to truly “legal” issues, most employers do not think about “Who is right according to the law?” or even “Who is going to win in Court?” That is just not how business people usually think. 

Rather, what business people really think about is what really concerns them, as business people: “What will this cost me in terms of legal fees, the company’s reputation, employee morale, distraction from our main business focus?” and the like. These “business” issues, believe it or not, are far more prevalent and central in severance negotiations than are truly “legal” issues. It is this type of “legal” experience you need on your side. 

The reason you need an attorney in such discussions is more for his or her business and negotiation experience and acumen, and how well he or she can spot issues, negotiate resolutions, and draft agreements, and far less his or her “legal knowledge.” 

We offer a Model Letter entitled “To Employment Attorney – Seeking Information for Retention.” If you would like to obtain a copy for your use, just [click here.]  

If, as I did in my Namibian case, your attorney ends up needing local legal knowledge, or local court experience, he or she can then locate and secure it for you which, quite frankly, does not happen often.    

For your negotiations, you might be interested in our Master 94-Point Severance Negotiation Checklist, to give you the peace of mind and freedom from worry that you have forgotten to raise or entertain certain points of discussion and negotiation. To obtain a copy, just [click here]. Delivered by Email – Instantly! 

D.M., I warned you that this was not going to be “easy.” That said, I hope I did clarify a bit for you the real things you need to know and bear in mind when you hire an attorney in this field. Go with experience and compassion: the rest will fall into place.  

Al Sklover

P.S.: Since you will soon be looking for a new job, one of our most popular “Ultimate Packages” of forms, letters and checklists is entitled “Ultimate New Job Package” consisting of 9 items, including Resume Cover Letter, Thank You After Interview, Memo Confirming Terms Offered, Response to Offer Letter, our Master Checklist of Items to Negotiate, and 50 Good Reasons to Explain Your Departure from Your Last Job. To obtain a complete set, just [click here.] 

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2013 Alan L. Sklover, All Rights Reserved.

“In what country should I start my lawsuit?”

Published on June 2nd, 2011 by Alan L Sklover

Question: Dear Alan, I would like to find out where I should bring my lawsuit, and your thought regarding “Do I have strong enough ‘case’ to bring a lawsuit?”  

I am an executive working for a U.S. multi-national company with its headquarters in Great Britain. I started my international assignment in 2006 with a post in Shanghai. The employment agreement is with a subsidiary located in Florida. In 2008, I started my assignment in Seoul, South Korea.

I received excellent (above average) annual reviews every year. In April of this year, the CEO gave me a very unexpected unfavorable review for 2010, and indicated that I will be repatriated back to the U.S. when my employment contract ends on June 30th. There is no offer of another job from my present employer, or from any others here in Seoul. The company is terminating my lease in Korea by the end of June. There are evidences that he bullied me in the past year and he is trying to squeeze me out of the company.

Thanks. Regards.  

Seoul, South Korea

Answer: Dear D.H.:

Let me try to help:  

1. The chances are very high that your employment contract designates one city in which all lawsuits must be brought. From my experience of almost 30 years, I’d say the odds are 90% that your employment contract designates where any lawsuit must be brought. Look for it in the final five or six sections of your employment agreement; that’s where you’re likely to find it. If it’s there, it is almost surely binding on you.

2. If your employment contract does not designate a particular city, then you can choose where to bring your lawsuit. If you have the choice, you can bring your lawsuit any place you like, provided your employer has “sufficient contacts” with that place. For example, you could bring it where you did the work, or where the company is headquartered, or in another city where the witnesses and documents may reside. Because my office is in New York, I have represented employees in Asia, Africa and Europe in lawsuits against companies headquartered in New York.

The most likely place to bring a suit would be where you worked, Seoul, or where your employer (the subsidiary) is located, that is, Florida, but it is not necessary to sue there. Lawyers would probably also consider such things as the different legal systems, and how long cases generally take to complete in different cities. Many lawyers would also suggest that, if you are from Korea, a Korean jury might just be a bit more sympathetic to you than a London jury may be.

3. From the facts presented to me, I cannot tell if you have a “legal case.” I am not licensed to practice law in South Korea, but from what you’ve described, I can’t tell if (a) your employer violated your contract, or (b) your boss was so bullying to rise to the level of a hostile work environment, or (c) your manager went so far as to commit a “fraud” in your performance appraisal. You really do need to consult with an experienced employment attorney in Seoul, South Korea, as it is that law – unless your employment contract says differently – that would likely apply to what happened to you. That lawyer should review your contract carefully, and interview you comprehensively, to determine if you have a “legal case.”

D.H., I hope this has been helpful to you. You are our first person to submit a question from South Korea. I hope you will come back again when you have questions about employment, and “workplace navigating and negotiating.”

Al Sklover

P.S.: If you would like to obtain a list of five or more experienced, “employee-side” employment attorneys in your city, just [click here]. Delivered by Email – Instantly!

© 2011 Alan L. Sklover, All Rights Reserved.

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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