If I Had a Hammer

by Apr 22, 2019Conscious Capitalism0 comments

If I Had a Hammer

If you look at the websites for a handful of law firms in your area, chances are that you won’t get very far before you find a firm touting the abilities of its lawyers to solve problems for their clients. I’m happy that problem-solving is such a focus for law firms. Law firms, like any business, need to create value for their customers and solving problems is a great way to create value. There is, however, a problem with how many lawyers approach solving problems. Abraham Maslow’s “law of the instrument” encapsulates that problem nicely. As Maslow wrote, I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.

When it comes to resolving conflicts, lawyers have a single tool. That tool is adversarial struggle, dominated by formal litigation. Sure, we have other processes that we bring into the picture from time to time, but the very name we use for those processes, “alternative dispute resolution”, demonstrates that lawyers look at these processes as red-headed stepchildren in the legal world. And after decades of guiding people through conflict resolution in the legal system, I can tell you that the dominant thinking even in these alternative approaches is adversarial. Lawyers solve conflict by swinging their hammers.

So how good is the hammer of litigation at actually solving problems? Well, it turns out, it’s not very effective at generating solutions and it has some pretty ugly side effects. I’ve seen that through a lot of the cases I’ve worked on over the years, but the case that probably paints the picture the best is one involving four businessmen. I’ll call them John, Paul, George, and Ringo.

John and Paul were friends and started a business together. Eventually, they invited two more friends, George and Ringo, to join the business. Unfortunately for our Fab Four, this business was trying to grow in the midst of the aftermath of the US financial crash that sparked the Great Recession. They faced a lot of struggles from outside pressures. The biggest source of pressure was a bank loan that was secured by all the assets of the business and personally guaranteed by each of the Fab Four. Not surprisingly, disagreements started to pop up about how the business was being handled. Eventually, the group fractured with John and Paul on one side, and George and Ringo on the other. Each pair hired lawyers, and things started down the path of litigation.

In understanding the limitations of litigation as a problem-solving tool, you have to first understand what litigation is designed to do. By and large, litigation looks back in time, determines fault, and decides what consequences that party or parties at fault should suffer to compensate for the harm they’ve caused. The winner in a lawsuit is the side that does the best job of claiming the role of victim. When people are in conflict, even conflict that is “just business” they tend to be hurt and angry and for people who are hurt and angry the idea that a court will see how they have been victimized and compensate them for harm can be very attractive.

The idea was certainly attractive for the Fab Four. They engaged in a multi-year struggle that cost the four of them hundreds of thousands of dollars collectively. All of those resources were devoted to the idea that they would be rewarded at the end. John and Paul claimed that everything was George and Ringo’s fault, while George and Ringo claimed the opposite. Each pair asked the court to make large awards against the other. As I said above, it drug on for years and it cost a ton of money. The case went all the way to trial, and eventually, the court ruled right down the middle. The court found that the problems that faced this business were just business problems, in the court’s eyes these problems weren’t specifically caused by anyone. The court ended up denying everyone’s claims, the judge simply couldn’t call one side the victim.

Since the Fab Four put all their resources into fighting each other, there was no focus on the outside challenges they needed to face. Most specifically, the bank loan went into default and each of the Fab Four got sued on their guarantees. Eventually, they each reached their own settlement with the bank, which cost everyone more money. Not surprisingly, the relationship between John and Paul on one hand and George and Ringo on the other was irretrievably broken by the litigation. I even heard afterward that John and Paul stopped talking to each other and that George and Ringo also went their separate ways. All those relationships joined what had the potential to be a successful business as casualties of this dispute. It sure didn’t feel like problems had gotten solved. The lesson that was available for everyone coming out of the case – fighting over who caused a problem, doesn’t solve the problem.

A few years after the case was over, I was trained in a truly different tool for legal dispute resolution, Collaborative Law. Collaborative Law is a different approach because it explicitly puts all sides to the dispute and their lawyers on the same team to work together to solve their problem. Instead of John and Paul versus George and Ringo, the case would have been all the Fab Four together versus their shared problem. To show they had skin in the collaborative process, their lawyers would be required to pledge that if the collaborative process failed, those lawyers would be disqualified from handling the case further. In other words, the lawyers had no financial incentive to encourage their clients to participate in a long drawn out struggle. Obviously, there is no way to know for sure, but I think the collaborative process could have made a difference for the Fab Four. If nothing else, they would have been working in a system that was specifically designed to solve problems, not one to find fault.

So the next time you’re talking to a lawyer and they talk about themselves as a problem solver, ask them to tell you about what tools they have and how those tools are specifically designed to solve your problem. If all they have is their hammer, then ask yourself “will this tool really be a meaningful help in solving my problem?”

Disclaimer:

Mr. Meier is a shareholder with the Las Vegas Law firm of Holley, Driggs, Walch, Fine, Puzey, & Thompson. All engagements for services discussed on this site are contracted through the Holley Driggs firm.

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The Conscious Business Lawyer

Glenn Meier, Esq.

Conscious Business Lawyer

"I'm at my best," Glenn notes, "when I’m helping my clients make their business relationships work better. Sometimes that means helping them build the relationship from scratch and sometimes it means helping them restore a damaged relationship. Regardless of the entry point, I work with people to strengthen those relationships and design legal agreements that support them."

Mr. Meier is a shareholder with the Las Vegas Law firm of Holley, Driggs, Walch Fine, Puzey, & Thompson. All engagements for services discussed on this site are contracted through the Holley Driggs firm.

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