General Counsel Wars: A New Dope

Let’s say you are professional athlete, and you blow out the ACL in your knee. Do you go to your primary care physician? Nope. Do you go see a nephrologist? Of course not. Do you find an orthopedic surgeon? Maybe. But in this day and age, you will find an orthopedic surgeon who specializes in knee injuries, and in fact, you are going to search for the best ACL repair specialist you can find.

So, it befuddles me when a burgeoning business owner relies on their General Counsel for every single legal need. Now, don’t get me wrong, this judgmental, gross generalization doesn’t apply to every General Counsel. Many do their job properly, protecting the clients for which they represent, and acquiring the knowledge they need, when there is a legal issue or risk outside of their expertise. They also ensure that specialized tasks outside of their knowledge are subcontracted to attorneys whose practice is focused in the specific area.

But not so for one particular General Counsel, whom I will call, Luke Skywalker, who worked in-house as General Counsel for the Rebel Company. Rebel Company provides construction services to consumers in several different states, but predominantly here in Gotham.  Luke had been in-house for them for decades.

After years of struggling, I met Rebel Company’s Chief Operating Officer, Rey, who told me that Luke was the Rebel Company’s prized counsel. But Luke was getting older, and did not want to proceed with collections. So, she found my firm, and wanted to hire us. I asked if Luke sued customers, and she told me that he only sent collections letters, never filed suit.

So, Rey sent me some files to commence lawsuits. When I reviewed the underlying contracts (which were typed in Courier font), I saw several disturbing things.

The customers were sometimes individuals without full names, just a “Mr.” or “Mrs.”  In one case, the entirety of the customer was “Mr. and Mrs.” Yep, that’s all! There was certainly no Social Security Number nor Date of Birth.  In addition, there were a handful of commercial business customers, none of which were identified by any proper corporate entity, just generic trade names like “Maz’s Cantina”, which of course, was no longer in business, destroyed by the Empire.

The contract also called for a compounding of interest, daily, at 2% per day, from the date of delivery of goods. Which, in case you didn’t know, is totally usurious in New York.

There was no real default clause for attorneys fees, just some vague assertions that the contract would be construed under “English Rules” as opposed to “American Rules”, whereby I understand English common law to put the burden of paying the opposition’s attorneys fees on the losing party.

Then, there was the exclusive jurisdiction clause. I have many feelings on clauses that fix jurisdiction, but this one fixed jurisdiction in the County of Bergen, Gotham. For the uninitiated, there is no such County. There is one in New Jersey.

Suffice to say, I gently explained to Rey, the clear deficiencies in the contracts, and she instructed me to speak to Luke. So, I did. And in the conversation, Luke proceeded to tell me that he had socks older than me. And then instructed Rey not to retain my firm after all.

Timothy Wan is the Senior Partner of the firm Smith Carroad Levy Wan & Parikh, in Commack, New York, and can be reached at twan@smithcarroad.com. Tim knows full well that he mixed pop culture metaphors with Star Wars and Batman, and even worse, cross-branded. Tim sincerely apologizes.

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