THE (IM)BALANCE OF JUSTICE

Neither a Borrower Nor a Borrower’s Lawyer Be

BY THE RODENT

Not all lawyers are alike. In fact, individual lawyers need to act differently; they cannot handle every matter in the same manner. Oftentimes, the approach you take and the way you posture are dictated by whom you represent.

Let me qualify what I’m about to write by saying that I am limiting my comments to transactional lawyering. Based on what I know of litigators, their clients are always absolutely guilty or innocent. (At least that’s what I picked up watching the Michael Jackson coverage.) And the lawsuit they are currently working on is always the most open-and-shut—or the most frivolous—of their careers.

Transactional lawyers need to be a bit more adroit when positioning themselves on behalf of their clients. Perhaps the best example of this is when they are called upon to represent either the borrower or the lender in a loan.

Skillfully moving from one side to another requires a split personality. Almost everything about working on this deal is different, depending on what side of the money you find yourself.

1. Billing. Transactions involving the borrowing of money often call for the borrower to pay all legal expenses, including those incurred by the lender. Lawyers must therefore adjust accordingly. If you are representing the borrower, you will record every move you make in 6-minute increments. Your client will then scrutinize your legal bills—which may be cut back to what the client thinks is appropriate. On the lender’s side of things, it’s time for free-form billing. At the closing, you simply write down an amount of money you feel like having, scribble "for legal services rendered" next to it and send in your bill. It’s that easy. Allow 30 days for delivery of your check.

2. Location. Closings for loan transactions are typically held at the office of lender’s counsel. That means home-court advantage. Visitors will be relegated to begging unsympathetic office staff for access to the fax machine, the Internet and the restroom.

3. Attitude. Lawyers tune up or down their attitude depending on who is behind them. With the bank behind you, you can be as demanding and obnoxious as you like. Who’s going to say anything? But you’ll need to lose the attitude if you are at this transaction with hat in hand. It’s a Jekyll and Hyde existence that often confuses those you work with—or live with.

4. Work. Oh yeah, there’s also the work itself. If there is any grunt work to be done on the transaction, you know who is going to do it. Beggars, and beggars’ counsel, can’t be choosers. Forget Jekyll and Hyde. When it comes to putting in the hours and producing the product, it’s more of a master-servant relationship.

5. Negotiations. Lender versus borrower is a total mismatch when it comes to negotiating. If you’re borrower’s counsel and you spot an issue, you can raise it, but what are you going to do if the lawyer on the other side doesn’t see things your way? You’re going to say, "Thank you, sir, may I have another?" Knowing this, lender’s counsel will throw in bogus, unnecessary or totally ridiculous provisions, just because they can.
It’s the most fun you can ever have with your pinstripes on.

All of this can be quite distressing for lawyers on the less desirable side of the deal. But don’t despair! There is a good chance you’ll be on the top side at the next deal. Even better is when that opposing counsel is there on the opposite side from you.

You can contact the Rodent at TheRodent@aol.com.

©2003 ABA Journal