Monday, April 19, 2010

"It's time to use our most powerful weapon - the lawyers."

Devotees will know that I am a lawyer by trade. I practice primarily in the areas of construction and labor/employment law (yes, labor and employment law are different) in Utah. I haven't been practicing long, but I've learned two important rules to help you avoid legal problems in Utah construction.

1. Don't get into a project for more than you're willing to walk away from.

Most of the cases I'm involved in are being prosecuted by contractors who are trying to get paid. Too often, they don't just want the money - they need it. If they don't get paid, their business will go under and they'll be forced to declare bankruptcy. This is an avoidable situation. If you get to the point on a project that you are owed so much money that you need it, you've gone too far. Pull out of the project before then and demand payment. If they can't pay you now, odds are they won't be able to later.

There are two corollaries to this rule: First, understand that to collect money, you must spend money. All major collection requires attorney intervention and we are not cheap. Usually, the attorneys' fees have triple or quadruple the amount owed if the case goes all the way to trial. Second, follow my huggin' advice. If I tell you to file something, do it. If I tell you to stop paying someone, stop. And so forth. You don't pay me for the sound of my voice, you pay me for my powerful brain.

2. Just because you're a good craftsman, doesn't mean you're a good businessman.

Many, many, many contractors suffer from this problem. They seem to think that just because they're good behind a shovel, they also know about accounting, tax laws, labor laws, corporate filings, and so forth. If you are a contractor, you need to learn the difference between good craftsmanship and good business. Despite what our retarded Republican leaders think, the free market does not always allow the cream to rise to the top. Business is cutthroat, difficult and requires a specific skill set for success. Few people have it which is why so few of these businesses succeed.

In Utah, the state legislature has passed laws that make it very easy for people to start new businesses. They think this encourages innovation. I disagree, but whatever. What really happens is that when these businesses fail (as they usually do), they leave behind them an army of unpaid creditors, employees, suppliers, banks, property owners, etc. who have to clean up their mess. It's dumb.

Therefore, if you are good at something construction-related, make sure you find someone who is good at business. Without both parts, all you have is a one-cheek butt - and it's full of crap.

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