Occasionally one of the “old farts” has to remind all of us that in our pursuits of fame and riches we need to be mindful of a “higher calling.” I am reluctantly picking up that mantle, not because I am conceding my advanced stage or suggesting I have achieved some well-earned wisdom, but because I have seen an alarming trend of gamesmanship and wastefulness that I just am having a tough time swallowing—so I am not. Let me start with a couple examples, and then suggest an alternative (or two).

An owner and an architect are negotiating a contract for a large, commercial project, and they understandably are initially deferring to the AIA family of documents to memorialize the deal. Remember, the AIA represents the “industry standard” for these special commercial transactions, and one of the goals of using this form is to reduce haggling over terms and create certainly on interpretation and outcomes.

During the negotiations, a slew of changes to the standard terms and conditions are under scrutiny by the owner’s counsel. One of the terms and conditions relates to the standard of care. The AIA form incorporates the national industry standard of care, the very one we all learned in law school for architects and engineers (i.e., “exercise the degree of care for similarly situated architects in the same or similar locality”). The owner’s attorney demands that the contract require the architect to exercise “the highest standard of care and employ the best products available” or something to this effect.

Now we all can appreciate that an owner may want something more than “reasonable” or “average” for its new commercial building, and there are ways to incorporate this degree of excellence into the design without much fanfare.

The client has every right to require excellent service.

But going down the path of changing the standard of care has commercial implications that simply are daunting to cure. What IS the highest standard? What does that even mean? Is this an objective “reasonable person” standard or a subjective standard?

More importantly, changing the standard of care in the contract basically renders the architect incapable of securing insurance because the architect’s E&O carriers have no way to understand the difference between “reasonable” and “highest” standard of care, because there is virtually no case law that addresses this new negligence standard. How does the carrier adjust for the heightened risk? What happens if the architect proceeds with the owner’s requested revision, there is a loss, and the carrier denies liability because the architect assuming a standard of care higher than that covered in the policy?

The negotiation gets protracted. Carriers are consulted and involved. The resulting negotiation turns into a heated and protracted battle that, in the end, results in an expensive attorney fee for the completed contract, and worse yet, undermines the business relationship at its earliest stages.

The second example relates to a litigated matter. An owner and a general contractor are in a payment dispute over a modest payment request. The contractor files a claim of construction lien to secure payment (and invoke attorney fees).

The owner and its counsel refuse to engage in any expedited resolution process and instead require that the matter proceed with full blown discovery, complete depositions, and two weeks of trial—a process, which if carried out, will ensure that the attorney fees will dwarf the amount in dispute, and turn the matter into a battle over attorney fees. The owner’s counsel concedes that the facts are legitimately disputed on the payment claim, and there is risk to the owner that it will owe the money (and the significant attorney fee) if the owner is not successful in its defense.

The owner thereafter follows through on its assertive defense, and both parties expend more than the amount at issue. The outcome is complicated by an extended attorney fee fight that candidly is challenging for the trial court to comprehend and digest. Admonishments to counsel for their lack of a resolution-oriented approach are shared. The attorney fee award is discounted to such an extent that from a cost-benefit point of view, the prevailing party certainly did not benefit.

Yes, certainly, clients are entitled to a zealous representation. And, on occasion, matters have to be fully and completely litigated and/or negotiated. But these instances are becoming far too common.

Whether it is a lack of will, or a lack of insight, or simply a desire to “please” a client (and secure a fee), taking a client down a path where the only persons to benefit will be the lawyers is short sighted and ultimately damaging to all of us in our industry. And in more and more circumstances, the clients are turning on their lawyers and blaming them for the very circumstance that was forecasted and advised (hopefully in writing). We are losing client trust and confidence, writing off time and working for free, and undermining the integrity of the good work we do.

My proposed answer: Do more than just give the pros and cons, with the proverbial “cover my backside” letter. Take the high road; be courageous, and tell a client you don’t want to be part of a train wreck. They likely will respect you more for your resolve and for your insight, and likely will turn back to you when they need “candid” advice, the very type of engagement we all strive to secure.

And if taking the high road is not possible, for all the reasons we are familiar, don’t be afraid to reach out for help. Call someone you know and trust, and get their perspective. There are very good practitioners and mediators in our industry who are willing to sit down for coffee, even occasionally with the client. Find them, and don’t be afraid to make the call.

You can remind the client that your effectiveness is measured in large part upon your reputation, and securing a reputation as a resourceful, but reasonable and insightful practitioner will not be all that bad in the long run. Be resolution-oriented. A recently retired practitioner in our circles did quite well over his legal career doing just that. We need more like him.

As published OSB Construction Law Section Newsletter, June 2014