Wealthy & Wise: The Trouble With Lawsuits

About the Video

The threat of a lawsuit is real, especially when you’re a business owner. Lawsuits can be costly on your time, money, and the stress they cause for all parties involved. Watch Adam Kintigh, our Executive Corporate Analyst, and, Kurt Harris, from Harris Law Group, as they discuss tools that can protect you and your hard-earned assets.

Prefer to read? A full transcript is provided below.

ADAM:

Welcome to another episode of Wealthy and Wise. I’m your host, Adam Kintigh, executive corporate analyst. And I have with us today an absolute rock star attorney. His name is Kurt Harris. And we’ll be talking in-depth about how to protect your assets and what to expect in the event of a lawsuit. I figure if you know what the attorneys are looking for, it helps you as an investor, business owner, to understand how to protect yourself. So, attorneys are always looking for the low hanging fruit, people that are beautiful, pretty people that they can find and take whatever assets they can. And we’re going to try and make sure that you know how to look really ugly for this episode today. So, Kurt Harris, tell us just a little bit about yourself and your background.

KURT:

Well, thanks a lot, Adam. It’s a pleasure being here. I am an attorney here in Las Vegas, Nevada. I’m also licensed in not only in the state of Nevada, but in Utah. I’ve been practicing in mostly litigation, estate planning and several other areas, family law and a few of those areas, the domestic areas. But I’ve been practicing for over 25 years and I’m sure I have been through quite a bit of the court system, and I understand it to a pretty good degree.

ADAM:

Fantastic. So the first thing I want to talk about is when it comes to filing lawsuits and you as an attorney, when you’re looking to file a lawsuit against someone, what’s kind of the first steps that you do or the first things you look at as to whether or not you would or would not take a case or would or would not advise a client to proceed with a case?

KURT:

Well, thanks. Sometimes I’ll have the client come in and they’ll be talking to me and they’ll have certain criteria they’ll have in their mind. They already want to file that lawsuit. So, I’m going to ask that client quite a few questions. I’m going to get a lot of my information right from my client. And I’m going to ask them about who is the person that they want to sue or the company that they want to sue. And tell me a little bit about it, where they at, where they located, what kind of building are they in? Do you think they own that building? Do they lease that building? Then sometimes we’ll jump on the assessor site for that particular county that we’re in and we’ll do a name search. And we’ll see what we can find out about that company, if they own any real property or see if it’s an individual that owns real property in the county. We can search other counties and see if we can find some information about them there. Sometimes I’ll ask them, do they have an insurance policy? That’s one of the first line of defense. Do they have insurance? How much insurance do you think they have? Are they a business? If they lease, a lot of times we know that they have a million or $2 million policy just by virtue of the leases that they are obligated to sign. And so that gives us some general idea about our ability to maybe initiate a suit against them where we’re going to be making our money or being able to get some recovery for the clients. And a lot of attorneys are very concerned about whether or not they’re going to get paid. And so, after we do that search and after we make some determination about who that potential lawsuit is against, we’ll do some type of an agreement with the client about, well, we’ll take this on a contingency, because obviously it looks like there’s an insurance policy and there’s something there that we can get. Or, you’re going to have to pay an hourly. And that’s generally how that goes.

ADAM:

Got it. And, you know, one of the things I was thinking about is I’ve dealt with so many clients over the years that when they talk about the hourly rates, if it doesn’t get taken on contingency, it gets very expensive. And so, we talk about the fees involved with litigation. First of all, what’s the timeframe if you were to file a lawsuit today? How long would it take for this for this lawsuit to actually get anywhere.

KURT:

Well like a normal civil lawsuit, It would be a miracle if you could get that to trial within two years. And at this particular stage in time, it’s more like three to four years. If there were an available calendar or available date on the court’s calendar, and if you were able to finish up all of your discovery. Discovery is when we have that question-and-answer period and we’re able to go out and try to get that information to substantiate our claims or get the information that enables us to try the case in front of a jury or in front of a judge. But right now, probably two and a half, three to four years is about what it’ll take to get your case to a trial.

ADAM:

Wow. That’s an incredible amount of time. So a lot of thought has to go into, OK, what do they have now and what might they have in three or four years from now? I’m sure it’s in the back of your mind wondering if we do take this case, can we actually collect?

KURT:

Well, and that’s a good thing you bring up because a lot of times, I mean, I’m not suggesting that anybody do anything in particular. I’m just saying that I’ve had particular cases that have gone to trial where there was nothing left by the time we got to trial. And people will say, well, that’s wrong or that’s dishonest. And I unfortunately have to tell them, I understand. Yeah, it is. But they did it. And so sometimes we’ll go after particular cases. We’ll try the matter, but at the end, we’ll end up with the the other adverse party declaring bankruptcy or something worse. Just saying, well, I’m just turning it over to you. I don’t have anything to give you at this point. It’s all gone. And good luck running it down. And then you have to talk about another fee schedule, about trying to get some kind of an asset collection or collection on a judgment, which is a whole other issue. And it’s also very expensive.

ADAM:

So, we’re talking about the cost of litigation in the timeframe in litigation is it’s hefty, is steep. So, we think about all these people looking to file lawsuits. There are those attorneys out there. I look at the fact that I think it shows there was over 1.3 million attorneys in the US today, and there’s just not enough good cases to go around. So maybe those high-end attorneys who might not be willing to take the case. We’ve also got the other guys that are there just trying to make a living. Now they’re stuck taking bad cases with bad facts, trying to put food on the table. So, when we talk about the cost of litigation, normally what you see is, kind of a, over a two to four year period. If it’s a case that you’re actually going to take, approximately what would the cost be for something like that? I know it’s a wide. Range.

KURT:

Right.

ADAM:

Minimum or maximum?

KURT:

If it’s a civil matter with a jury trial, costs will go somewhere around $200,000. 200. And through the discovery portion, and that is probably over, probably close to $100,000 to $120,000, depending upon the size of the case, how many defendants are involved or what the case amounts to. At this point I don’t think it would be uncommon at all for a jury trial to go for $100,000, easy. But I wouldn’t even flinch at telling somebody, hey, this could cost you up to $200,000 if you’re going to see this all the way through. And then there is that potential that they’re going to appeal it or, or it’s not going to come out the way you want it to. And then we’re talking about an appeal. And so it’s incredibly expensive to litigate that whole area is very, very expensive.

ADAM:

So. Well, thanks for sharing that. With us. So I, I was talking with one of my clients years ago and she was a trial attorney and she said, she worked for an insurance company, I said, Shay, in all the years she said, 25 years as a trial attorney, how many cases have you actually taken to trial? She said, I count on one hand, I think, the number of times we’ve actually gone to trial. Why is that? Why is it so much that people want to settle and avoid trial all the time?

KURT:

Well, it is incredibly expensive. We’ve talked about, to go to trial, and then there’s just this whole uncertainty about what’s going to happen. If I have a jury, I really have no idea what that jury is going to do. I have a general idea. I think I think I know. But really when the jury goes into the jury room and they make a determination, sometimes they base their decisions on some of the craziest things that you never saw coming or you never expected or anticipated. And you also have rulings that are these pretrial rulings that are leading up to trial, where you’ve got a judge making the rulings on those that can make a big determination on it, what the outcome is or what the jury gets to hear or not hear at the trial proceedings. And so, all those things and there’s all these variables and all these uncontrolled factors that you have no idea what’s going to happen. When you put people up on the stand, you have a pretty good idea what they’re going to say because you may have deposed them already, but when they get up there, they can change their story. The version to be a little bit different. Everything could come out wholly different than what you expect and really as a seasoned litigator or a trial attorney, in order to manage the risk, a lot of times you’re talking to your client and you’re talking about settlement right away from the get-go. About, you know, settling it, managing your risk and controlling your destiny, as opposed to putting it in the hands of other individuals who really don’t know you. And you’re not going to live with them for the rest of your life either.

ADAM:

True, that’s awesome. So, we talked about in the beginning that you as an attorney, the steps that you’re taking when you’re looking at evaluating a case, what are the factors we looked at? Do they own the building? You look at the county assessor website, and I know it used to be that to do an asset search, it took a lot of time and a lot of money.

KURT:

It’s expensive.

ADAM:

But with our technology today, a few things are, we can quickly see maybe the home, whose name is on the building and some other things that are very quick, quick and easy to see. So, when it comes to that, the asset search and we just think about, well, if I don’t care about protecting my assets, I don’t care about my business and my family and my homes or my rental properties, what would I do? I’d want my name on everything. I would post on Facebook, social media, everywhere, all the assets I have. So what would be your advice for people that want to protect their assets and not have to go through $200,000, three to four year litigation fees? Would be your advice for those folks to start taking steps to protect their assets?

KURT:

Well, I mean, you hit on social media already, which is become this very cheap way for me to look at people and see what they’re doing in their lives and see maybe what kind of assets they have, what kind of car they drive all kinds of things. You know, if you don’t see it on social media, it didn’t really happen is what they say. You know, it’s kind of funny, but people will put their whole lives out on Facebook or other social media platforms, that enable us to do what used to be an incredibly expensive asset search, pretty cheaply now. We can get a pretty good look at people and see what they’re doing just based on what they put there. Obviously, you shouldn’t do that. Obviously, you don’t need to do that. And it can encourage an attorney or encourage somebody maybe who’s struggling a little bit who’s willing to take a case on a contingency, because things are a little bit slow, when they see that kind of thing. So obviously, I’m a big advocate of privacy. Obviously, we don’t believe that you should ever put your name on anything if you can avoid it. Obviously, we think that if you, the use of land trusts, not in your own name, your revocable living trust that you do that everyone should have, don’t put that in your own personal name. Put that in some other name that doesn’t lead an attorney directly to you. If you have an LLC, a limited liability company, we recommend that you put yourself down as the manager. Don’t put yourself down as a member, because if I see that you’re a member on the Secretary of State website, I know you’re an owner of that company. I know you have a piece of that company, whatever that happens to be. I don’t know how small it is. But those are the kind of things that encourage we attorneys to move forward because we know if you have something to lose, then we have the ability to essentially put you in a worse spot with a lawsuit, if you’re worried about losing something. If you’re not worried about it, put your name out there. Who cares? But if you have concerns about your assets, you probably shouldn’t be broadcasting it to the world.

ADAM:

All right, good. Well, Kurt, I so appreciate you taking time out of your day, being here with us. And I want to thank you all for joining us Wealthy and Wise. It has been a great topic here with litigation. As Kurt said, your best defense is privacy. Keep your name off public record as much as possible. Thanks again for tuning in and we’ll see you next episode. Thank you.

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DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.