Creativecommons Podcasting Legal Guide Eng Creativecommons Podcasting Legal Guide Eng

31
Copyright 2001 Simply Media, Inc. Lincoln, MA 01773-0481 www.simplymedia.com Deaver Brown, Author Brown co-founded the Umbroller stroller company, American Power (APCC), and Simply Media. He published The Entrepreneurs Guide with Macmillan in hardcover and Ballantine in mass market paperback. He published a business series of CD-ROM’s with Macmillan and another series with Simply Media. Brown graduated from Harvard College and Harvard Business School. He has published numerous articles in trade journals and business magazines. Beat Lawyers At Their Own Game

Transcript of Creativecommons Podcasting Legal Guide Eng Creativecommons Podcasting Legal Guide Eng

Page 1: Creativecommons Podcasting Legal Guide Eng Creativecommons Podcasting Legal Guide Eng

Copyright 2001Simply Media, Inc.

Lincoln, MA 01773-0481

www.simplymedia.com

Deaver Brown, Author

Brown co-founded the Umbroller stroller company, American Power(APCC), and Simply Media. He published The Entrepreneurs Guidewith Macmillan in hardcover and Ballantine in mass market paperback.He published a business series of CD-ROM’s with Macmillan andanother series with Simply Media. Brown graduated from HarvardCollege and Harvard Business School. He has published numerousarticles in trade journals and business magazines.

Beat Lawyers At Their Own Game

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Legal Survival Kit

About the Survival Kit SeriesOur Survival Kits are designed to be quick, concise, and mucheasier to read than most reference books. As in true wildernesssurvival kits, the key to success is limiting your materials to theleast amount of weight necessary. This provides users with fast,light, yet complete packs, and ensures easy travel without excessbaggage.

At Simply Media our hardest task is eliminating materials thatare not absolutely necessary for traversing the subject’s territory.We take the time to make each of our Survival Kits as short andconcise as possible so you can learn the most important factswith a fast cover-to-cover read.

About the Legal Survival Kit

The Legal Survival Kit pares down the huge amount of legalinformation available, and provides you with the essentials foryour legal protection and planning.

In the spirit of “less is more,” the contents are concise and divid-ed into small individual categories for faster reading and bettercomprehension.

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American lawyers used to belong to an elite

club that “did the right thing,” or so we

thought. There have always been bad lawyers,

ambulance chasers, and the like. Even

Shakespeare said, “First, kill all the lawyers.”

Of the major industrial countries, only the

United States permits:

(1) Contingency law suits. That is, the

plaintiffs do not have to bear any costs other

than a potential percentage award to the

lawyer.

(2) The loser does not have to pay the legal

costs of the winner.

These two rules have led to an explosion in

American litigation. Well-financed lawyers can

fund clients to prosecute. If the funded client

loses, there is no financial consequence for the

plaintiff in all but the rarest of cases.

Is it any wonder, then, with these rules, that

we have so much litigation in the US and other

industrial countries so little? Other countries

have these guys under control.

These are the facts of life in the American

legal world. The American Trial Lawyers

Association is alive, well, and vigorously pro-

tects its privileges. It is the largest political

PAC, with all the implications of that powerful

position, protecting the interests of litigators

and defenders. Remember that for every liti-

gator there must be at least one legal defend-

er, usually another lawyer.

Your Role in the Legal World:Winner or Loser

In the current legal environment, you will

either be the winner or loser in your legal

affairs. As with most of us, you will sometimes

win and other times lose. The objective of this

CD-ROM is to keep you out of litigation and

help improve the odds you will win if you

become engaged in what has become a wide-

spread American activity.

Legal Survival Kit

BackgroundHow We Got to Where We Are

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You cannot opt out since anyone can sue you

for anything, and these days, they often do. At

work or at play, at home or on the road, you are

always vulnerable to legal attack. Our efforts

are devoted to provide you the best advice and

tools to avoid litigation and prevail if it should

occur.

Insurance: Umbrella LiabilityCoverage to protect you fromthe lawyers on the prowl

You should consider adding an umbrella liabili-

ty policy to your homeowner’s policy immedi-

ately to protect you from unforeseen lawsuits.

An annual additional liability policy of up to $1

million often costs no more than $100 per year.

This not only protects you from additional

losses should they occur, it also usually pro-

vides for the insurance company to cover and

manage all legal costs and activities—so you

can get on with your life in relative peace and

quiet. Do it!

This Guide With Step-by-StepAdvice Per Form

We have provided you with this Guide in addi-

tion to step-by-step advice for each legal form.

After each document, we have provided specif-

ic advice for that form or letter in a “review

list”. This way, that advice is specific to the

form and not over generalized here.

Notwithstanding that, the following is general-

ly useful when filling out the forms and letters.

1. Prepare and keep a separate document with

the key facts pertaining to each individual

and/or corporation and/or other entity you

enter into these documents. For individuals,

this should include their legal name, address,

social security number, passport number, other

pertinent numbers (such as Medicare or

Health Plan number), date of birth, date of

marriage, date of divorce if applicable, chil-

dren’s information, and so on and so on.

2. Set up a word document file where you save

this information plus each form you create for

later reference. If you wish to also keep this

record elsewhere, do so too (duplication will

only help you). You should also keep a hard

copy file of signed documents and your key

fact documents.

3. If you do not have a fire proof safe, get one

and put these documents into them. The

office supply stores (e.g., Staples, Office Max,

and Office Depot, and their on line affiliates)

have them and will usually deliver at no

charge, so you don’t break your back carrying

your safe home. They cost about $150 each.

You can get them cemented into your base-

ment or into your floor for extra protection.

Do this too, if you can.

4. Review these forms and consider doing well

care for yourself legally in advance of any

prospective problems. This means doing

proactive things you may not need immediate-

ly (important but not urgent, a category we all

tend to ignore at our peril), such as wills, pow-

ers of attorney, trusts, medical instructions,

and the like. If you don’t do them immediate-

ly, write out a schedule in which you will do

them—and then do them.

5. Encourage other members of your immedi-

ate and extended family to do the same kinds

of things. You will give them a great gift by

doing so.

Action items:1. Get additional umbrella liability

insurance policy coverage.

2. Get a home safe.

Legal Survival Kit

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Clarence Darrow, the great trial lawyer, said

this long ago. Justice Oliver Wendell Holmes

admonished a participant in a particularly ugly

case, “Do not make the mistake of confusing

justice with the law.” Finally, one can com-

plete that thought with Winston Churchill’s

repeated comment, said in various contexts,

that democracy, and the rule of law, although

messy, is the fairest system people have yet

invented.

Our primary objective in this Guide, with illus-

trative audios, is to provide you with a broad

background of the legal system and suggest

the appropriate tools to use when dealing with

the legal system in general and lawyers in par-

ticular. Our 600-form section is used by many

practicing lawyers who, like you, can benefit

from prepackaged forms that can be edited

upon demand. Lawyers can do this more

boldly than nonlawyers because they have

been trained in the law, have experience and

feedback from their prior activities, and there-

fore have a better sense of how to use these

tools (i.e. the forms) to expedite and formu-

late agreements for themselves and their

clients.

If you are not a lawyer, you should restrict

yourself to the simpler forms or fill out a form

you need and then request a lawyer to review

it on your behalf. Your very act of selecting and

completing certain documentation in advance

of turning the matter over to an attorney will

save them time and therefore save you money.

Tip: If you ever feel “concerned,”

“worried,” or “uncertain” about any-

thing discussed or presented in a legal

form, that is your tip-off to contact a

lawyer for clarification and implementation.

Self-help forms should never be used unless

you are entirely confident of your actions. We

do not offer legal advice. We offer personal and

business advice about how to interface with

Legal Survival Kit

Introduction“You Have To Know The Law Well To Make It Work For You.”

Audio One: Introduction

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This Guide or Survival Kit is intended to guide

you through the legal thicket. The primary

purpose is to inform you of your options, sug-

gest pitfalls to avoid and opportunities to seek,

as well as make you better informed when dis-

cussing these matters with an attorney when

you believe it necessary.

www.simplymedia.com

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the legal system and the lawyers within it.

Our business advice to you is to select the form

suitable to your needs. Then fill in the blanks,

as you believe appropriate; and then have a

lawyer review it. This approach will save you

time, money, and permit the lawyer to focus on

the legal issues, not the paperwork. If your

lawyer advises against the form, take his or her

advice.

Simply Media’s role is similar to Stanley or

Black & Decker in the tool business. We all

make great tools, but we can only provide you

with a limited amount of teaching instruction,

and that is limited to business and personal

advice. As in a construction project, the tools

are usually better used by a professional, in

this case a lawyer, especially if a complicated

project is at hand.

Our purpose in this disc is not to give you

“legal” advice. The legal trade union, led by

the Trial Lawyers Association, has prohibited

us from doing so in any event. If you think the

Teamsters are tough at guarding their turf, you

have seen nothing like the Trial Lawyers

Association.

They are the largest political action group

(PAC) and reportedly can intimidate even the

President of the United States. So, they have

effectively intimidated us, and we only give

business and personal advice in this CD-ROM.

Not withstanding this restriction, we believe

the most important part of the law relates to

how individuals and corporations use the tools

of the legal trade. The law is a means to an

end. It is not the end in itself, except for the

lawyers themselves who practice the trade.

Legal Survival Kit

Did You Know?

Japan, unlike the US, graduatesmore engineers each year thanlawyers.

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The most significant thing about a written

agreement is that it clarifies what “you get”

and what “they get”. The most practical ben-

efit of a written agreement is that, unlike an

oral contract, memory cannot alter the facts.

On the simplest of levels, an agreement

reminds us of what we agreed to in order to get

what we wanted. It also, of course, should

serve to remind the other party of what they

agreed to in order to receive what they want-

ed. This may sound overly simplistic; but, in

fact, most of us have wavering memories that

favor our point of view; with the lapse of time

it is much easier to forget our obligations to

others. Written agreements identify these

issues and can help resolve these problems.

Furthermore, written agreements are often

especially useful in personal situations because

they clarify the terms of an exchange of money,

such as a loan to a family member, or property,

such as the use of a piece of equipment. In

fact, in personal situations, just the request for

a written agreement often dissuades other

people from “borrowing” your money or prop-

erty. Once they realize the activity will be doc-

umented, they realize they have undertaken

obligations of repayment or return of property

that they never really intended to execute.

Written agreements are especially important

among friends, family, or close associates

because one of the best ways to lose a friend or

other close associate is to loan him or her

money or property. A written agreement at

least allows you, them, and the world to see

what the actual agreement was. In summary,

then, written agreements are just as useful in

personal as in professional or outside circum-

stances.

Your Responsibilities ToOthers: What You Owe Them

The leading cause of legal conflict is people

Legal Survival Kit

Written AgreementsTheir Purpose

Audio Two: The Purpose of Written Agreement

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and companies on one side of the issue or the

other not recognizing their responsibilities

under their agreement or agreements to the

other party or parties. In simple terms, they

did not understand or did not properly review

what they had to pay or do to satisfy the other

party. Often, once the bickering begins, both

parties begin to point fingers at the other party

and overlook their own responsibilities.

This difficulty usually arises because one or

both parties ignore the reason the other party

signed the agreement in the first place. This

reason is of “little” interest to the other party

because this is not why “they” signed the

agreement. However, if you wish to avoid

legal problems, it is always imperative you

understand the motivation of the other party

so you can prevent legal conflict from arising.

Recommended approach: When conflict

develops, identify what the other party wants.

This often changes due to circumstances relat-

ed to the parties or the environment as a

whole. For example, in a poor economy, people

and institutions get more desperate to get

what they want; this often serves to inflame

problems. Then determine if you can provide

what they want in full or in part. At a mini-

mum, discuss with the other party their inter-

ests in the contract. As you do this, they will

usually become more amenable to discussing

the issues you have with regard to the agree-

ment. If you approach this matter patiently,

you should be able to alter the odds in favor of

a negotiated compromise satisfactory to you.

Lawyers tend to stir the pot when conflict aris-

es and overreach on behalf of their clients.

This stems from both their training to be vig-

orous advocates and their compensation meth-

ods which relate to billable hours, the more the

merrier for them but not for you. Therefore,

you are advised to seek out the other party

independently and try to negotiate a revised

approach to your dealings first. If a lawsuit

breaks out, there will be time enough for the

lawyers to try to settle the matter at a later

date. Even after litigation has commenced,

the best hopes for a negotiated settlement

remain with the parties who have the most to

gain from prompt resolution prior to extended

litigation and trial.

When conflict arises over an agreement, it is

important to try to openly discuss this point as

if it is a common problem without assigning

blame to the other party. Many times a frank,

non-judgmental conversation can put the

agreement back on track. Bite your tongue

and stay calm. Try this approach if you can

bring yourself to do so emotionally.

Above all, try to keep in mind that it is usually

in both party’s interests to resolve a conflict

early. Even when litigation is undertaken, the

vast majority of cases are settled prior to trial.

Why? Because the litigation process usually-

consumes more time, emotions, and money

than the case is worth. Therefore, you are well

advised to seek out advice about how to

resolve these issues, such as we offer in our

Negotiations Handbook and Conflict Resolutiondiscs.

Legal Survival Kit

Audio Three: What YouOwe Them

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Justifications For Why You WillWin The Dispute

Very rarely does anyone “win” a legal dispute.

Both sides must hire and pay lawyers, who are

the ones who win because they get paid. Most

suits are settled for a walk a way (no one gets

anything) or considerably less than they would

have gotten if they had settled early in the dis-

pute. In some plaintiff cases, against insurance

companies for example, some legal positioning

can be useful to establish the value of the case.

Aside from this kind of suit, most legal suits

such as in divorce, collection, or other contract

matters, the parties would have been prudent

to seek negotiating assistance instead of legal

counsel.

“My Lawyer-Friend-Associate Told Me WeWould Win”

People often “take away” this thought from

discussions with various people. The more

likely truth is that you were advised that you

“could,” not “will,” win. Once the people in

black robes (judges) get a hold of a case, you

are in the legal gristmill and most results are

uncertain. If you want proof of that uncertain-

ty, remember how often cases are overturned

on appeal. This means that another set of

judges disagreed with the first group. Not a

reassuring feeling if you are “relying” on a pre-

dictable outcome.

On rare occasions, such as note collections, the

results are indeed generally certain and you

can proceed with relative certainty that you

will get judgment. However, judgment is not

collection. If you are pursuing collection

against an insolvent, or financially shaky,

defendant, you are usually better off with a

negotiated settlement they are comfortable

with to assure eventual collection. So once

again, what seems certain in the law may not

be enforceable in reality (i.e., they can’t or

won’t pay and bankruptcy or other approaches

will prevent you from collection).

Tip:: Court is a poor place to win back

points you could not obtain in initial

contract negotiations. Interestingly,

Court often works very well for a defen-

dant trying to get out of a “gotcha” clause.

“Intent” or what the parties “meant” is very

important as a mitigating factor. Tricks and

gotchas don’t help the plaintiff or stronger

party in these matters as much as you might

think; sometimes they do, of course. Better to

use a “gotcha” clause as leverage to settle

other issues.

“They Have The Money And More At Stake;So They Must Settle On My Terms.”

Those with the money are more apt to stand

and fight than ever before. The days of insur-

ance companies rolling over, for example, are

long gone. The increase in litigation has

reduced organizations and individuals’ fear of

the process. In fact, the new conventional wis-

dom is if you don’t stand and fight, more peo-

ple will attack you because of your own per-

ceived weakness.

Plaintiff lawyers went to the well once too

often: individuals and companies have

Legal Survival Kit

You Don’t Say

The essence of freedomis the legal right to be

left alone”

Justice William O. Douglas1961

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learned. In a football analogy, the quarterback

called this play once too often and now the

defense is all over it!

Tip: Since you know settlements values

are down, consider taking less. Splitting

the difference is usually the best

approach since neither side loses face.

This is not legal advice; this is a quick practi-

cal approach.

Common Complaints InDisputes That Relate To TheProblem Of Responsibility

This section is about how you got into trouble.

Understanding how you got there should help

you get out this time and hopefully not fall

into the same trap next time. This section

describes the personal and business reasons

why you got to where you are in a dispute. It

is not about what the legal ramifications of

your case or potential case are. Lawyers are

paid, and paid well, to unscramble these mess-

es. Our purpose here is to advise and forewarn

you in advance of ways to avoid these conflicts,

and their ultimate resolution through negotia-

tion or the use of lawyers.

“That Wasn’t Why I Signed The Agreement.”

When a dispute arises, many people say, “That

wasn’t why I signed the Agreement.” They

continue by saying, “That point isn’t impor-

tant” or some other such comment. This may

well be true for them. But the point that you

consider obscure or unimportant may be the

very reason they did sign the agreement in the

first place. Without your having given in on

that point in the initial negotiations, they may

well not have signed the contract in question

at all.

In other words, what may seem trivial to you

may have been critical to them. In fact, this is

often the case in disputes. Payment terms are

examples of such clauses. You may have

agreed to pay them in 60 days, but wanted to

pay in 90 days. What’s the big deal, you may

have thought, if you pay just thirty days late?

Well, in fact, their entire banking relationship

may be in jeopardy if you do not pay within 60

days. Or, they may have been only able to set

up their payment plans to their own vendors

strictly based on their securing your firm writ-

ten commitment to pay in 60 days, promptly.

Note: This also may be part of the “gotcha”

school of negotiating. One side tries to bludg-

eon the other into agreement on points they

really do not want to accept or cannot live up

to. You are much better off openly discussing

these issues early and ensuring that the other

party can live up to this part of the contract. It

is one thing to get commitment on something

they do not want to do, but can do. It is quite

another to secure agreement on something

they really cannot do. If this is understood

early, you can often work around it. If you can-

not work around it, you may be better off not

making the agreement since it cannot be lived

up to later.

“But They Agreed To Do It!”

They may have agreed to do it. But, if you

forced them into a corner, and they felt they

had no other option, they may have signed the

deal and hoped to renegotiate out of this point

later.

Legal Survival Kit

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11

Warning sign: You pressed hard on certain

points and got their commitment. They told

you “we are going to have a hard time with

that” but you pressed forward anyway, disre-

garding the flashing yellow lights.

It is a lot harder to get out of an agreement

than into one. Do not rely on a legal document

to trap or compel the other party to live up to

terms they have warned you are burdensome.

You may eventually prevail in court. But you

undoubtedly will have a lot of costs and heart-

burn along the way to this resolution, even if

you achieve it. And, in the end, you may not

collect on your judgment, even if you get it,

due to defendant insolvency, being overruled

on appeal, or for a host of other reasons.

In fact, this uncovers a major weakness most

lawyers have. They focus almost exclusively

on a court victory, or a “judgment,” without

giving proper weight to the probability of col-

lection of an award, if granted. As a civilian, or

nonlawyer, you should use your business skills

to determine whether the defendant can in

fact pay; has a habit or ability of wiggling out of

judgments; and the like. In sum, a lot more

judgments are granted than collections made.

Before becoming a plaintiff, be sure you have a

solvent defendant with a habit of paying when

they lose.

Common Approaches inDisputes: Negotiations toHardball tactics

What The Agreement Should Say For YourBenefit

In adjudicating (deciding) a case, the Court

first looks at exactly what the agreement

states. The Court tries to interpret the agree-

ment “strictly”, or according to what it actual-

ly says. Ambiguity is what the potential

“loser” tends to emphasize. The potential

winner focuses on the actual words, written

terms, and conduct, and thereby seeks “strict

construction” of the language.

Short, to-the-point contracts help here. Well

known “boiler plate” or standard language

helps your case because the Court “knows”

what it means. The longer the contract, the

better the chance to find a loophole. So, why

do lawyers write long contracts? Because they

are paid by the hour and keep thinking they

will “help” their client by piling on more lan-

guage. Usually longer contracts tend to

obscure the core agreement and, worse yet,

often introduce contradictory language that

defendant lawyers love to jump on and use

against the plaintiff.

As a defendant, pray for long contracts and as a

plaintiff, fear them!

Reconsider Your Position

Rarely does anything work as well to calm ten-

sions and set the tone for a solution than an

apology and offer to the other side to reconsid-

er your position. Your next step is to suggest a

time out, just as schools do, while the parties

rethink their positions and try to understand

the other side’s position.

Start with reconsidering your objectives. If

you want to keep doing business together,

and/or keep the relationship in tact, then hard-

ball legal tactics rarely work well. In addition,

consider whether the legal effort is worth the

Legal Survival Kit

Audio Four: CommonApproachesThat Can Help

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12

cost. Conflict is more easily enflamed than

extinguished. Effort to extinguish conflict

early can produce surprisingly good results for

both parties.

If You Think Litigation is Inevitable, GetAdvice Promptly

It is under this circumstance that lawyers are

the most useful. Your first step should be to

consult your lawyer vigorously about options.

Often the best solution is to file suit, or answer

their complaint, and then, with both sides’

stakes in the ground, quickly move for a nego-

tiation session to see if a resolution can be

reached. Why? Because you have both proven

how tough you are. Now you can see what can

be done. Early compromise to avoid litigation

is often seen as “weakness.” So, seeking a ses-

sion after complaints, answers, and counter-

claims have been filed, takes you out of this

arena of perceived weakness.

If Inevitable, Invest In Your Initial Answer AndCounterclaims

Now is the time to plan your defense and

counter-attack. Contrary to what

many lawyers think, they are

not as “cute” or “subtle” as they think and

often telegraph their intentions early on. If

the other side starts out reasonably, you can

often resolve the matter easily. If they start

out tough, of the “hard ball” school of negotia-

tions, you know that you have to prepare for

litigation.

Interesting point: Very few negotiations fall

into the middle ground of balanced discussions

and approaches. So, your challenge is to figure

out whether you are dealing with reasonable or

hardball people. Then you can proceed

accordingly.

Just because you are right or wrong up to this

point, does not mean the trend will continue.

You can make up a lot of lost ground by acting

properly with regard to the agreement in dis-

pute and noting how your opponent is not.

The worse your case, the more important it is

to mitigate your damages to minimize the ulti-

mate negative result. It is no different than in

sports situations. When your opponent gets

ahead, they tend to get confident, forgetful,

and lazy. In fact, the potential loser can use

this human tendency to sit on the lead and be

sloppy to reduce their ultimate damages and

even pull out a victory in the end—just like a

come behind win in sports!

Defensive Actions

This section deals with such actions as inter-

preting agreements and defending your inter-

ests with the most appropriate methods. This

part also suggests ways for you to minimize and

avoid expense, conflict, dissension, and trou-

ble.

Much Trouble Can Be Avoided

Difficult neighbors, relatives, employees, boss-

es, subordinates, town boards, hazardous con-

ditions, barking dogs, dangerous equipment,

Legal Survival Kit

You Don’t Say

The shortest distancebetween two points is

rarely a straight line inthe law.

Deaver Brown, Author

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13

teenagers on the loose, contracts, agreements,

inheritances, or other relationships are every-

where in most of our lives. The best single

piece of advice is given under the section in

the text entitled your inalienable right to back

up and away from problems.

In many situations, you cannot simply run out

the door or leave town. But you can reduce or

mitigate your damages or problems by decou-

pling, stepping back, or simply getting out of

the way. The most difficult issues relate to

events that cannot seemingly be changed:

boundary lines, divorce settlements, work rela-

tionships, teenagers, or agreements. Over

time, though, you can substantially adjust your

activities and, essentially, duck.

Small appeasements can go a long way. Turn

down the radio or chain your dog for the neigh-

bor. Praise the difficult relative to others so it

gets back to them. Maneuver around to get a

new boss or subordinate. Ease out the difficult

employee. Resign from a troublesome town or

nonprofit board or appease them. Give the big

dog away or don’t get a new one. Make con-

tingency plans for poor, weak, or onerous

agreements, contracts, or settlements. Work

on these issues continuously and you will be

surprised at how they ease away or at least the

decibel level is reduced.

Visualize a simple image: It is a lot easier to

dam up the Mississippi at the headwaters in

Minnesota than when it is a mile wide in

Missouri. Head off trouble early and you will

benefit handsomely at a much lower cost.

When Trouble Calls In The Form Of A LegalLetter

Recognize and internalize immediately that

you have already “lost” something because you

are involved and were not able to head off the

problem earlier. If the letter is from a collec-

tion agency, they are usually empowered to

settle claims for at least 33% off the face value.

Keep this in mind if you can settle the matter

with cash. If not, keep reading.

If the letter is from a lawyer, it is usually from

a collection lawyer who is also usually empow-

ered to settle a claim for something less than

face value. Good lawyers do not generally

involve themselves in collection matters you

would be involved in other than large corpo-

rate matters. So, you usually are not dealing

with the A team here.

If the letter is about anything but straightfor-

ward collections, and is not a simple request

for information, or forbearance, such as keep-

ing your dog chained up or quiet, complying

with a zoning law, or other straightforward

matters that you can promptly comply with if

you so chose, then you need to consult a lawyer

promptly for advice as to how to proceed.

The Tough Guy Letter.

This kind of letter details how bad it is going

to be for you if you do not do everything they

want you to immediately. This is a standard

off-tackle play these days. It is well known.

Even most lawyers don’t expect it to work very

well since it has become so common and famil-

iar. So this circumstance gives you one key

advantage: the other side knows they are

“lying” by saying it is worse than they will set-

tle for. Therefore, you have the moral high

ground and can use it to settle for less.

Legal Survival Kit

Audio Five: So You Got aLegal Letter

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Collection Letter—Asset With a Lien Such Asa Mortgage or Car Financing

If it is about an asset they have a lien on such

as your car or house, they have all the leverage

and all the advantages. If you truly cannot pay,

work out the best payment plan you can and

contact them to see if it will be acceptable to

them. If so, live up to it and try to regain your

financial footing. If it is not acceptable to

them, explain that you must now see a lawyer

about how to deal with the problem. Ask them

again, if they won’t reconsider their position.

If so, wonderful; if not, get a lawyer.

Remember that if you can pay, consider care-

fully exactly what you can pay and when you

can do it. Virtually all of us “know” when we

are late on a mortgage or car payment. You

“know” the problem. Only you can determine

whether you can get current, or up to date

again, or not. If you can, or have a good chance

of it, OK; deal. If not, see the lawyer. If in

doubt, see a lawyer. At this stage, you do not

want to commit to an unrealistic payment

plan. If you do, and you break the plan, it will

count against you with the collection agency or

lawyer and they will only attack more vigorous-

ly on their next contact with you. When dis-

cussing with them what you “can” do, remind

them of this problem of potential broken

promises—and you do not want to go down

that road nor do they want you to do so. That

may help. If not, go back to the lawyer option

again.

Collection Letter—Unsecured Debt

You have most of the advantages in this cir-

cumstance. They have no lien or asset to

repossess. They must first use the court

process to get a judgment that they can later

convert into a lien. Then they can apply the

lien to something you own. This is a long

expensive process that no collection agent or

lawyer wants to undertake. This is especially

true since most of them are on contingency,

which means they only get paid a percentage

of what they collect. These circumstances

provide you with substantial leverage to rene-

gotiate your debt. If you haggle a bit, you can

often reduce the face value of your debt, with-

out accrued interest or fees, to 50% or less.

Collection agencies generally get 25% to 50%

of what they collect. So the firm that “owns”

your debt has already given up to some extent.

As a result, they are usually vulnerable to giv-

ing up more, especially if convinced to do so by

the collection agent or attorney who, in this

circumstance, is your ally because they benefit

from a quick settlement—which gets them a

quick commission.

Tip: If you are having trouble with an

unsecured debt such as a local contrac-

tor or a credit card bill, and believe a col-

lection agent is in your future, consider a set-

tlement for a partial payment with no bad

impact on your credit history with the compa-

ny in question. 50% to 75% will generally do it.

Sometimes you can even set up a payment

plan. If you don’t feel comfortable doing this

yourself, see a lawyer. But, generally, if you see

Legal Survival Kit

You Don’t Say

You can discover whatyour enemy fears mostby observing the meanshe uses to frighten you.

Eric Hoffer, Philosopher andLongshoreman

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15

a lawyer you have to pay more than the value of

the bill. Pay the bill if you feel nervous.

Otherwise, negotiate or see a lawyer.

Collection Call

Same situation as described in the collection

letter sections above.

When You Are Sued

Get a lawyer—except for small claims court

where you will usually do better answering

complaints yourself. There are upper limits on

the claims that can be brought against you in

Small Claims court. These claims usually can-

not exceed $2000. Therefore, the expense of

hiring a lawyer usually exceeds the amount of

the claim itself, making it more productive to

do the claim yourself. Notwithstanding that

fact, you can often do well to run your

“defense” and potential “counterclaim” by

your attorney to get their quick read on the

matter. This small investment can often pay a

substantial dividend for you in either negotiat-

ing your claim with an arbiter at small claims

court or with the judge.

Before you see a lawyer regarding litigation,

write down the issues—their pluses, minuses,

and interesting points. Be sure to line up the

counter claims.

Small Claims Court

They will encourage you to negotiate. Take a

check with you. No matter what the claim,

you can usually get a broad release—for even

broader than the single claim—especially if

you bring the check. The presence of a check

will usually encourage the other side to take a

lesser amount. Use this advice prudently and

you should be able to save yourself some

money in Small Claims court. They will usual-

ly let you try to work out the matter with an

arbiter first, with you using the advice above.

If that does not work out, you will be forced to

present your case to the judge sitting in court

that day and he or she will determine the out-

come.

How Courts Approach AndInterpret Agreements

Courts check out two things prior to applying

the laws to your case:

What did the agreement state?

What did the parties mean or intend?

Occasionally, Courts will decide to intervene

promptly by providing an injunction or

restraining order in the case of extreme behav-

ior such as egregious conduct, over-reaching, or

lawless activity. Although most litigants pray

for relief (i.e. in layperson’s language, “ask for

help and enforcement”) on these grounds,

Courts are reluctant to enter into these types

of immediate enforcement activities and gen-

erally do not act until a trial is conducted (or,

as in most cases, the parties reach a settle-

ment).

Venue, or place of the lawsuit, can be very

important for these purposes. Law is politics,

Legal Survival Kit

Audio Seven: The Court’sApproach AndInterpretation

Audio Six: PMI Thinking

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on this approach the most. Why? Because

“What the Agreement Says” works against

them. The best way to beat this approach is to

use a short agreement with the Entirety of the

Agreement clause; in layperson’s language this

means, “If it isn’t written down here, it doesn’t

apply, unless it is written down later and

signed by both parties.”

The recommended language for your agree-

ments to cover these two issues (venue and

intent) is:

“This Agreement embodies and sets forth the

full understanding and agreement between

the parties. No change can be made except in

writing and signed by both parties. Any dis-

putes must be brought in__________city, in

________ county, ___________ state and in no

other venue.”

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16

of course, as one can tell by a casual reading of

newspapers. Just two examples: in a heavily

Democratic state like Massachusetts, liberal

causes such as those of tenants (the disadvan-

taged) will usually be heard with more favor

than in a Republican state. In a Republican

state, judges would be more likely to uphold

the landlord (property rights). So, the court is

more apt to make a finding in favor of a tenant

in Massachusetts and a landlord in a

Republican state.

Action Item: In your agreement, be sure to

establish the venue, or place for resolution, in

the jurisdiction apt to be most favorable for

your cause. In our case at Simply Media, we

have locations in both Massachusetts and New

Hampshire. For issues that the Democrats

favor, we write in the venue as Massachusetts.

For those that Republicans are apt to favor, we

write in New Hampshire.

Dealing with intent of the parties is a more

complex task. The best antidote is to write in

a clause commonly referred to as “Entirety of

Agreement.” This clause typically states that

the Agreement embodies and sets forth the

full understanding and agreement between

the parties and nothing can be changed except

in writing. This is not a perfect solution since

lawyers often are able to persuade judges to

“go behind” the written agreement; but it is

generally the best you can do.

90% of discovery and the associated costs prior

to trials relate to discovering what the intent

was and what every one “meant.” In simple

terms it means “what did you really mean”

when you signed the agreement. Clearly this

is a murky area subject to much conjecture and

questioning.

The weaker party in a conflict generally relies

Legal Survival Kit

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17

Financial and legal agreements between

friends and relatives are the most challenging

ones to discuss, create, and enforce. In your

discussion of these subjects, you should use

the document creation process as a means to

flush out what the parties really mean. For

example, a request for a loan or a rental is often

just a plea for a gift. The requesting party may

think that somehow, some day they will repay

the grantor; but, in fact, they intend to receive

the money or property and then unilaterally

have the ability to decide when, where, and if

they will make any repayment of any kind.

This attitude usually comes about because the

potential recipient is used to receiving “gifts”

or their equivalent from the grantor. This is

quite clear in the case of children and poor rel-

atives. It is not as obvious in the case of

friends, business associates, and younger peo-

ple without longer business and/or life experi-

ence.

In these cases, it is even more important for

the parties to have what they term in the law,

“a meeting of the minds,” about repayment or

return of rental property. The very process of

discussion can flush out intent and usually lead

to a productive solution.

Commonly asked questions are:

“Why do we need an agreement?

“Don’t you trust me?”

These lines tend to back us off. The natural

response is to say, “No, I do trust you and....”

The best answer is, “It has nothing to do with

trust; it has to do with clarity. If we write it

down, we will remember it clearly. Memories

serve to change events; or, like the old game of

whispering around the table, once a line is

repeated several times it loses its original

Legal Survival Kit

Agreements betweenFriends or Relatives

Audio Eight: AgreementsBetweenFriends

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meaning. And, of course, one of us might not

even be around to explain the matter.”

Often this kind of discussion causes the poten-

tial recipient to drop their demand entirely.

Since they never really intended to repay the

loan they have requested nor pay for the rental

they wanted, they do not want to enter into a

formal agreement so will often walk away from

it entirely when confronted with your require-

ment to sign a formal agreement. Your best

move is to give them room to retreat and avoid

moral spin so they do not feel belittled and

humiliated by the process and their own

retreat.

If the demand is not dropped, then you can

put the request into standard promissory note

or rental agreement format with the appropri-

ate interest rates, repayment dates, collection

expense recovery clauses, collateral backup,

and the like. Under either alternative, you will

be well ahead of the game.

Our final suggestion, if you get to the point of

negotiating this kind of agreement, is to

request them to lay out all of the terms them-

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18

selves so they “own” the agreement and its

repayment and collection terms. If they make

a silly recommendation on a specific term or

terms, usually just a lifted eyebrow will get the

terms into the right “ballpark.” These

arrangements are never easy and certainly wor-

risome. To minimize your potential financial

and emotional losses in the matter, let the

potential recipient set the terms initially so

you have the least to haggle about. Then gird

your loins as you go into battle to hammer out

the most reasonable and prudent terms you

can, always keeping in mind that if they “walk

away” from the entire matter that is usually

the best result.

Stock Investments with family,friends, and business associ-ates

As with family, friend, and business associate

loans and rental agreements, businesses

involving these kinds of parties should be for-

malized and stock certificates issued. It is

especially important that stock agreements

include the Entirety of the Agreement clause,

referred to earlier, so that if the parties later

dispute the division of the stock and roles

within the company the resolution process can

be as straightforward as possible.

Memorializing the agreement compels all of

the parties to set forth their purpose, expected

compensation, and anticipated payments in

the situation. The risks in

family/friend/business associate

loans and rentals, as well as stock

investments, are due to the fact cir-

cumstances change (e.g., a sharehold-

er wants his son or daughter to be

employed by the company on the sole

basis that they are a stockholder).

Sometimes the party investing the initial or

follow on money has financial setbacks and

“needs” the money back. At other times, a

death, liquidation, or sale occurs and “other”

Legal Survival Kit

You Don’t Say

Never make the mistakeof confusing justice and

the law.”

Justice Oliver Wendell Holmes, Jr.1906

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19

parties, such as heirs, trustees, or administra-

tors are involved.

In one such case involving a family loan to my

first company, a written promissory note docu-

mented in corporate records resulted in the

loan being promptly repaid by the new owners

right on schedule without intervention by any

lawyer. This is just one example of how the

written agreement can assist all parties with-

out being abusive of any of them.

One of the most contentious areas in family

businesses relates to whom or which “side”

will get plum corporate jobs and the accompa-

nying pay scales. It is our experience and rec-

ommendation that initial stock agreements

should expressly state that stock ownership is

separate from corporate management.

Dividends should be paid in cash not corporate

jobs or, as is referred to in government perks,

in pork.

Finally, the stock agreements should provide

for a straightforward exit position if contention

breaks out and no one party has clear majority

control. A buy sell agreement works well to

establish a clear exit path should certain spec-

ified conditions take place such as no clear

majority being in accord on a course of action.

A second approach is to provide for an orderly

sale process of the enterprise with the funds to

be received divided up among the sharehold-

ers, if contention breaks out. Just the process

of offering a company for sale often makes all

of the parties more realistic if the offers

received are far less than the insiders believe

the company is “worth.” Buy sell agreements

usually require this approach to establish fair

market value, or what the company is “worth.”

At that point, you should be able to negotiate

a reasonably satisfactory buy/sell solution, as

long as you had it in place to start with.

Tip: This kind of stockholder agree-

ment requires the use of the best attor-

ney you can afford to extract the facts,

set up a suitable agreement, and provide

a solid and agreeable exit position should the

stockholders descend into contention. Since

circumstances change rapidly these days, you

are well advised to update your stockholder

agreement and buy sell agreement on a regular

basis. You should try to do this at least once

every five years, if not more frequently.

Legal Survival Kit

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20

Before drafting an Agreement, you should first

establish a term sheet. Term sheets are an

outline of a proposed agreement. These are

useful to prepare before entering a negotiation

so you know what you want, what you will

accept, and what is your walk away position.

The problem with contracts is they draw you

into liabilities. The risk is primarily to the

stronger party; and yet, interestingly, it is the

stronger party that usually demands the agree-

ment. Counter-intuitive but true.

Lending institutions are always cramming

these documents down borrowers’ throats.

Yet, they rarely help them speed up the collec-

tion process if something goes wrong. The

best deal for the institution is really a note, a

lien, and a simple agreement. More docu-

ments than that usually results in it appearing

that the lending institution had an unreason-

able amount of power and “forced” the agree-

ment. This does not mean a Court will “let

you out of it.” It merely means that lots of

documents do not help the stronger party.

If a lender or powerful party goes after you,

watch your lawyer use the length of the agree-

ment against them. Institutions never seem to

learn this lesson. So, when someone owes you

money, get a note, a lien (if possible), and a

simple agreement. Again: Business advice.

Unrealistic expectations lead to many prob-

lems. This is why many large companies

refuse to deal with very small companies or

individuals in many areas. They are rightfully

fearful of the “intent of the parties” conse-

quences of their actions or other extreme posi-

tions that the weaker party might charge them

with and might just stick in Court.

Term sheets tend to eliminate many of these

problems by allowing you to work out carefully

your options and then having a reference point

when you get into the heat of negotiations.

Legal Survival Kit

Business Agreements

Audio Nine: BusinessAgreements

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21

The simpler the contract, the less likely a

Court will ascribe “broad” relationships to it.

On the other hand, long contracts suggest a

substantial relationship and open you up

potentially to very intrusive and expensive

investigations in many Court encounters.

Tip: Every business agreement should

have a well-defined exit position. You

should aggressively seek a “give up”

clause so you can get out (other than with

mortgages, notes, and other simple financial

instruments reflecting actual indebtedness).

This back door lets you at least cut your losses

should conflict arise.

Incorporation

Incorporation protects you personally from lit-

igation. As long as you observe the proper cor-

porate formalities, you can rarely be sued suc-

cessfully on a personal basis. If you are named

individually in such a suit, your lawyer can gen-

erally get you removed in a quite straightfor-

ward way. As with all layers of protection, no

single approach is perfect, but they all help, as

this one does.

Tip: The best way to incorporate is

through the Company Corporation that

does 1 out every 7 incorporations in the

US. They are specialists in the field so

offer the best service at the lowest price. Click

“Incorporate Your Business” on the main

screen to get the forms to make this happen.

Once you do this, you must call to get your

Federal ID number by filling out that form.

You can get the latest form off the IRS site at

irs.gov.

In addition, you should then set up a Business

Checking account. You can order the checks

by filling out the attached forms. You should

also order business cards, stationery, and

envelopes to give you the appearance of corpo-

rate respectability to go along with your formal

incorporation. You can click here to order your

new stationery at an affordable price (the same

company does checks and stationery). You

should set up a separate phone and fax line, as

well as email address (under AOL it can just

be another screen name), to give you the aura

of being a going concern. In the corporate and

legal world, appearance counts. So do it!

Legal Survival Kit

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22

Personal litigation can be particularly nasty

because it involves things and people so close

to you. Boundary lines, wills, and divorces are

infamous for their ugliness. You rarely hear

about a nasty trademark or promissory note

dispute. However, recently, more people have

been taking these “personally” too. These

only get “nasty”, in our experience, when the

parties get personal.

Tip: Try to keep conflicts as impersonal

as possible so you can heal the rift as soon

as possible after the rupture. At a minimum,

this approach serves to contain the problem so

things are less explosive and you don’t create

the family situation where no one is speaking

to one another.

One great litigation lawyer pointed out to me

though, “I never have a suit that isn’t person-

al.” So beware of contributing to the problem

yourself.

Try to remove the personalities from the set-

tlement or litigation process as soon as possi-

ble. A little humility here can go a long way.

You can say such things as, “I am too personal-

ly involved in this as you may be too. Why

don’t we get a different person on each side to

deal with this.”

Warning: We have observed that

lawyers are beginning to take their

cases more personally too. At a mini-

mum, do not let your lawyer do this. If the

other lawyer does this, actual litigation will

tend to uncover it and the Court may well see

the bias that led the matter not to settle.

Boundary Line; NeighborDisputes

Business advice suggests selling and moving.

No one wins these. They can be very bitter,

debilitating, and linger for decades. Legal

advice says you may win. Personal advice says

Legal Survival Kit

Personal Litigation

Audio Ten: PersonalLitigation

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23

that at a minimum, try to get out of the “way,”

and find a way to soften the situation.

Part of the solution is to care less about what

the other side thinks, about who is tougher-

stronger-righter, and move on to other issues in

your life. As one old time lawyer told me,

“The worst legal problems are boundary lines

and wills.” At least with wills, you have finali-

ty in that some conclusion will result and, to a

large extent, you “know” your family. With

neighbor problems, things can rapidly escalate

out of control due to differing value systems

and a lack of family bonds to cover over some

of the bad feelings and disputes.

Having said this, there are many things you can

do to limit your exposure and upset. First, be

polite and conciliatory without being a door-

mat. If a neighbor asks for something above

the normal or outside of the context of your

relationship, suggest that they reciprocate in

some way so you can keep the relationship bal-

anced. Tell them that you “are sure they want

to keep balance in the relationship as well.”

Secondly, keep your children, pets, friends,

and cars off their property. This is an obvious

point but many people just slough it off saying,

“They don’t mind.” They may well be boiling

inside and when the pot boils over you will not

be happy. Third, engage and talk to them

occasionally to calibrate what they are up to,

what they are thinking about, and indirectly

about how you are doing with them. You may

be surprised by what you hear. Try to correct

what you can—which will lighten your load if a

legal problem arises later.

Wills

Even lawyers avoid making wills for them-

selves. Superstition is the major problem for

most of us. We all need to get over it. Make

the will. It may save people close to you tons

of trouble later.

Every family has stories about the great pro-

bate fight that centered on the piano stool,

summer cottage, or other item loaded with

personal memories and feelings.

Tip: In this age of divorce and remar-

riage, give your spouse half (usually

legally required), set up trusts for your

children for up to the other half (if the

surviving spouse remarries your children

become “step-children” and Cinderella told us

all about how that works out) with the execu-

tor being a banker or third party. This is not

about “trust.” This is business advice about

human nature.

Also, do not put too much pressure on the

process of drawing up a will by trying to antic-

ipate all of the events for the rest of your life.

In this fast changing world, drawing up a will

every three to five years makes perfectly good

sense. Most of the changes will be minor

adjustments. A good way to remember to do

Legal Survival Kit

Audio Eleven: Wills

You Don’t Say

The law cannot make aman love me, but it cankeep him from lynchingme, and I think that’spretty important.

Martin Luther King, 1962

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24

this is to do it every time you get a new license

or on every 5th reunion of a high school or col-

lege class. A more modest approach towards

the scope of the will, just the next five years,

will give you more courage to get it done and

then revise it periodically.

Use a form such as ours to draft your intent;

give it to a lawyer to memorialize. It is impor-

tant. Do it now, if you have not done it already.

Tip: Provide for an auction of all ques-

tionable value items. This is especially

true for sentimental items. Everyone may

“want” the piano stool Mom sat on. But no

one may be willing to pay $10 for it out of his

or her proceeds from the auction. The mech-

anism is to provide a final percentage division

for all of these objects. Then each party can

use their “percentage currency” to acquire

what they want or bid above the limits with

their own cash. This process usually works to

turn down the heat and get the Estate liquida-

tion process moving. It worked splendidly in

my family to ward off battles over the silver-

ware, furniture, and similar items.

Real Estate Trusts

Real Estate trusts for your private residence or

residences are a good idea in this litigious age.

It means that litigants in other matters cannot

“attach” a lien or prejudgment attachment

against your property. It also tends to discour-

age plaintiff lawyers because it prevents the

quick kill of an attachment against your prop-

erty that they might be able to use to make

you settle up on another matter entirely. As

with estates or wills, fill out the forms but be

sure to use a lawyer. These areas require in-

depth thought and experience to determine

the best ways to proceed. Again, an ounce of

prevention here can save you having to pay a

pound in cure later.

Divorce

Bookshelves would collapse if all the books

published on divorce in just one year were

stacked on them. Without taking sides, our

business advice is to take note of the following:

Winners in Divorce

The only definite winners are some female

members of the upper middle class and upper

class. They can make out well. Everyone else

loses, especially lower and middle class

women. Most divorces squabble about the

kids. But, the kids become like Korea, and get

battered and scarred, and 50 years later the

Koreas are still not reunited.

It only takes one person to start a fight, as

Ogden Nash once said. So, above all, remem-

ber that you are entering treacherous territory

here and must therefore be doubly cautious,

vigilant, and careful.

Tips to the Losers (Except ForHusbands Of The Winners)

Go easy on each other. Otherwise the lawyers

will get what little there is. Both sides may

benefit from Court enforced child support.

That way, the benefits both increase and

decrease according to the actual received

income of the parties. Split the property and

move on, if you can. This is easier said than

done because of all the emotion attached to

the children, the property, and the old rela-

tionship itself.

Legal Survival Kit

Audio Twelve: Divorce

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25

Advice to the FormerHusbands of Winners

Understand you are going to lose. Do not

make the mistake that many men do in this

situation and be tempted to hold on to the soft

assets and hard debts while giving up the hard

assets and soft debts. You are better off selling

and splitting most assets, especially the mari-

tal home. Then nothing lingers as long. If

more husbands of winners forced the sale of

the marital home, they would force the poten-

tial winner out of the old emotional zone and

get them moving towards a new life.

Make child support dependent on your annu-

ally earned actual income. Otherwise, if you

lose your job, off to jail you may go—and this

isn’t Monopoly, there is no $50 card here to

get you out of jail. Some winners love to hear

the jail door slam on their ex-husbands despite

the consequences to the children and their

relationship with their children.

Try to limit child support to the shortest peri-

od possible. Try to get physical custody for

some period of time or you may never get it at

all. Consider this like a 5 on 3 penalty in hock-

ey. They will score many points if given

enough time. The only question is, how many

times? If you don’t know hockey, ask about the

5 on 3 penalty situation. Ouch.

This is also good business advice for any case

where you are the potential big time loser.

Always work to minimize the amount of the

damage award and the time period you must

keep paying. Try to keep your cool and

remember that owing the money may be out-

rageous, but every little discount helps.

Child (Mother) support is where the real

potential problem is, not the division of com-

munity property. So if there are no minor

children under 18, there is rarely a problem.

Courts are tough on making people go back to

work and “try” to earn a living (i.e. the poten-

tial winner). So the potential winners usually

only score big-time when minor children are

involved. If you have children near 18, consid-

er long and hard whether you don’t want to

wait until they are 18 before you start a divorce

proceeding if you are one of these husbands.

Tips For the Winners

This is one area lawyers perform magnificent-

ly. You need no advice from us other than to

decide how much pain you wish to inflict. The

power is yours.

Joan Lunden had this happen to her. It

changed her mind about this stuff after she

was attacked—and got whacked. Before

launching into such an attack yourself, you

should read up on the Joan Lunden story. It

might just get you to holster your weapons.

Legal Survival Kit

You Don’t Say

Vaclav Havel, Prime Minister and Playwright

The law is only one ofseveral imperfect waysof defending what isbetter in life againstwhat is worse.

”“

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26

You can do a lot to protect yourself. The fact

you are reading this is a major step forward.

Let’s go over some things to help you.

Review Your Areas OfExposure

Exposure relates to what you or your spouse

do. What your minor children do. Or what

happens on, to, or with your property. Make a

list relating to these three categories: what

activities do you or your spouse participate in;

your minor children; or items relating to your

property.

Examples include being a human helper to

others: all kinds of risk exposure for you here.

This is not just as a doctor or lawyer, but as a

business advisor, coach, teacher, town board

member, volunteer driver, and various other

related activities. Think hard and make an

exhaustive list of all such activities in which

you participate. Do it. It is important.

Property issues relate to hazards, attractive

nuisances, animals, trees, and any other risks

to others, including, believe it or not, a slip and

fall accident to a door to door salesperson).

Be sure to set up the basic protections such as

a will, real estate trust (s) for your property

(ies), business agreements, and other agree-

ments related to your situation (e.g., health

care stipulations). Be sure to get the home

safe and umbrella liability policy referred to in

the Background section.

Insurance

The best rule for insurance is to insure for

what you cannot afford to lose. Pay directly

yourself what you can afford to lose—it is

much cheaper in the long run. So, with car

insurance, you are better off with a high colli-

sion deductible but spending the savings on

Legal Survival Kit

Three Steps To TakeTo protect yourself

Audio Thirteen: Review YourExposure

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27

getting large umbrella liability policies to cover

extraordinary damages. In homeowners insur-

ance, the same rules apply. In business and

your personal life, be cautious about all of your

business activities but be sure to have a large

product or service and employee liability poli-

cy or policies.

Get A Legal Check Up

Get a legal check up with a good lawyer. Give

them a list of the areas of exposure you worked

on earlier. Figure out which areas are most

liable to be attacked. Perhaps you should

reconsider serving on town boards, being a

coach, taking your children’s friends on trips,

and so forth. At a minimum, you should review

your activities, and those of your family, to

determine which ones, if any, should be modi-

fied or eliminated.

Be sure to memorialize your outstanding “oral”

agreements that could use certification. You

may not be able to get the other party to sign

up. This is a warning sign itself. Think of

yourself as the proverbial librarian calling in all

of your overdue books. The first round of

effort will produce most of the results. After

that you will have to work harder to bring the

remainder in. But, at least you know what you

have to work at, and that is usually half the

battle.

Make a date with yourself to do this once a

year. Choose an anniversary date such as New

Year’s, your birthday, or some other such day.

Put the date on your calendar and stick to it. If

you do this now, in a year or so you will have

eliminated, or at least limited, most of your lia-

bility.

Legal Survival Kit

You Don’t Say

The defendant wants tohide the truth because he

is generally guilty.”

Alan Dershowitz, Trial Lawyer, 1982

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28

One reason many people become more suc-

cessful in business as they get older is they

learn to give up, walk away, retreat, and not

fight on most issues. If it is too hard to bust

through the wall, they learn to walk around or

away from it. If people are too difficult, they

don’t work with them. What they do emotion-

ally is distance themselves from trouble and

troublesome situations. I have found this hap-

pening to me, as I get older. It is one of the

enormous advantages of age.

A question: If Stalin, Lenin, Hitler, Saddam,

and various terrorists had been in their 70’s, do

you think they would have done it to start

with? Chinese leaders have been older. So far

they haven’t attacked anyone except for Tibet

in their own borders. Castro became pretty

tame once he reached 65. Now that he is 75

he is a pussycat.

Think older. It is OK to give up. A few exam-

ples that have worked for me:

You are a volunteer coach on a team; you have

two or three children with difficult, interfer-

ing, and critical parents. You can give up and

say, “Look, you have your points; I am no pro at

this. Good luck.” If you select this option, be

sure to do it when provoked, in front of wit-

nesses, and give them the “ball.” Don’t back

down once you start. Don’t be talked back or

they may wait their turn to whack you for it

harder the next time.

Result: You have one less problem in your life.

They may just think twice before doing it

again, especially if you do this in your home

community.

You are a boss and have a troublesome employ-

ee reporting to you. You can suggest giving up

and say to your boss, “Look I can’t manage

them; I don’t want to make it worse. Why

don’t we move Sally-Billy before we have a real

problem.” In business, bosses are terrified of

being sued by employees. So, your humility

should impress your boss and include him or

her in the decision to take conservative action.

Now, to whack the nail a little harder, you can

say, “Look boss, let’s be smart. None of us is

perfect. What if we really do blow it some day.

Legal Survival Kit

You Can Walk AwayYour Inalienable Right To Retreat

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29

Do we want them around to crow about it or

worse yet rat us out?”

Result: You are on record about the problem.

If anything comes up later, you put everyone

on notice. You have taken the heat off your-

self no matter what the outcome.

Interesting Point: None of these actions

resolves the problem. That is a much more

challenging enterprise and not the subject of

this CD. Our Conflict Resolution and NegotiationsHandbook discs address that process. In this

case, you have merely mitigated the damages.

As you get older, most people learn it is far

more productive to mitigate damages than try

to eliminate them. As Mark Twain said, “You

can’t throw a bad habit out the window. You

must coax it down the stairs.”

You have a contract with a difficult person-

company-type. “I am sorry X, we just aren’t up

to your standards. We need to move on.”

Customers for Life by Carl Sewell describes “fir-

ing customers.” Organizations cannot with-

stand harsh treatment by the outside world.

You must first protect people within the com-

pany or organization if you want them to treat

outsiders well. If people make your company’s

environment miserable, you have to get them

out or the whole place can become surly.

Again, you are not resolving the issue; you are

mitigating the damages.

As Herb Kelleher of Southwest Airlines says,

“Employees first; customers second,” in order

to keep the employees morale up to deal with

the customers. To underscore this, Southwest

permits its employees to fire customers by

telling them, “We don’t do what you want; x

airlines does; please use them and not us next

time so you won’t be disappointed.” This is a

perfect “give up” strategy without offending

the other party but getting yourself and/or your

organization off the hook.

All of this is easier said than done. However, it

is good, solid business advice as to how to

reduce future problems that could well turn

into litigation. Remember: you have the

inalienable right to retreat honorably and with

all due haste.

We strongly recommend you incorporate uni-

lateral “give up” or exit clauses in all of your

contracts, with or without cause. Consider

putting in clauses, which we do, to give you

the right to “quit” or “stop” without giving

reasons. In retail they have a marvelous phrase

for it, “Your first loss is your best loss.”

In summary, when a situation is not working

out well, one of your best options is an orderly

retreat so you can focus your energies on a pro-

ductive situation. It is all too easy to get

caught up in the emotion of conflict. Better to

move on to opportunity—unless, of course,

you are a lawyer and then you get rewarded by

more billable hours. However, you, as a civilian

and nonlawyer, don’t want to be caught footing

the bill for those billable hours.

Legal Survival Kit

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30

Lawyers may have started the trend to

increased litigation. We as a society are per-

petuating it. As we gradually take less person-

al responsibility for our actions, and discipline

being admired less and feared more, more and

more people are seeking to blame others for

their problems—and seeking monetary com-

pensation for them through the legal system.

The courts have always been an accurate

reflection of our country’s beliefs. They are no

exception in this instance.

Individually we must learn to deal with the

consequences of society’s trying to “right all

wrongs” and get “compensation” broadly.

Some of the results are positive; many are not.

Keep in mind that it is very expensive in time,

money, and emotional resources “to prove”

anything through the court system. The best

way to turn away a lawsuit is to try to settle it

out promptly, recognizing the increasing ten-

dency for people and organizations to sue each

other. If you cannot settle an actual or poten-

tial lawsuit, be alert to your options to improve

your position through “good faith dealings,”

being vigilant about identifying their weak-

nesses, and get good legal help early. As the

old saying goes, “An ounce of prevention is

worth a pound of cure.” That is exactly why

we wrote this CD-ROM and we hope you have

benefited from it.

Legal Survival Kit

SummaryDon’t Just Blame The Lawyers!

Audio Fourteen: Don’t JustBlame theLawyers

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31

Legal Survival Kit

Audio One: Introduction

Audio Two: The Purpose of Written Agreement

Audio Three: What You Owe Them

Audio Four: Common Approaches That Can Help

Audio Five: So You Got A Legal Letter

Audio Six: PMI Thinking

Audio Seven: The Court’s Approach and Interpretation

Audio Eight: Agreements Between Friends

Audio Nine: Business Agreements

Audio Ten: Personal Litigation

Audio Eleven: Wills

Audio Twelve: Divorce

Audio Thirteen: Review Your Exposure

Audio Fourteen: Don’t Just Blame The Lawyers

Appendix IClickable List of Audio Clips