LAWBUILD Letter No. 14

Thursday, 24th August 2006

Lawbuild provides construction law expertise to save clients time and money. A personal message from Lawbuild's Principal David Lewis

Please use this link to read our notice on publication of correspondence, legal disclaimers and intellectual property

An Ode to Joy

Welcome to The Lawbuild Letter No. 14, and what a joy is in store for you.  For starters there is practically no law to wade through, although you can learn a little about quantum meruit in our regular glossary feature.

Fancy your hand as a legal draftsman?  No reason why you shouldn’t, even if you’re no lawyer.  Our competition will test your brainpower, and your command of English, better than any crossword or Scrabble game.

Maintaining our reputation for cutting-edge controversy, we explain why solicitors charging hourly rates are – no doubt unwittingly – operating a Marxist-Leninist economic policy.  This may come as a surprise to them, as it did to me when I first realised it.  See if you agree – or send me a splenetic email if you don’t.

But despite my well documented preference for fixed fees over hourly rates, quoting a fixed fee can occasionally alienate one’s clients.  For example, the other day one of my clients phoned me and asked, "How much would you charge for just answering three simple questions?"  I replied, "A thousand pounds."  "A thousand pounds!" my client exclaimed. "That's very expensive, isn't it?"

"It certainly is," I said. "Now, what's your third question?"

With kind regards.

Principal of Lawbuild, solicitors
Editor of the Lawbuild Letter

Solicitors: the last Marxists?

Following my rant against solicitors’ hourly rates in The Lawbuild Letter No. 13, I am indebted to Frank Johnson in the Spectator (24th June) for a point I had overlooked.

Johnson refers to Marx’s theory of surplus value, which he simplifies thus: “a good’s value derives from the amount of work which went into making it.”

As I think we all now know, Marx was dead wrong and a good’s value is the amount of money which people are willing to pay for it.  (It still amazes me, by the way, that free-market economists like Milton Friedman, and politicians like Margaret Thatcher and Sir Keith Joseph, actually had to persuade people of this basic and obvious fact during the 1970s and 1980s, but those were the times we lived in.)

Clearly the hourly rate for professional services – especially when it’s the same for any kind of work, regardless of its value or importance to the client – produces a total fee which derives from the amount of work done by the professional.

Of course, the market prevails in the end.  Solicitors who quote hourly rates are obliged to give estimates, are frequently stuck with the estimates they’ve given, and (I strongly suspect) sometimes “forget” to record some of their time in order to convince themselves or their superiors that they aren’t “making a loss” on the job.

Ultimately, if clients aren’t willing to pay fees which cover the cost of the fee-earners’ time then hourly rates won’t work.  In those circumstances, even where hourly rates are used they are likely to be something of a fiction.

I don’t say it’s easy to find alternatives to the hourly rate.  I haven’t found it too difficult for “project” work, where you more or less know beforehand what it will entail.  But I’m still working on the much harder problem of finding the best way to quote fixed fees for general retainer work.

Meanwhile I think I’ll leave the Marxist theory of surplus value to those few people who still believe in it: chiefly the governments of North Korea and Cuba, and (though they may not realise it) the English legal profession.

Competition: can you lawbuild?

lawbuild • v.i. & t (past and past part. lawbuilt) simplify, clarify and abridge
-DERIVATIVES lawbuilding n lawbuilder n
-ORIGIN C21: named after the British construction solicitors Lawbuild.

It seems the English language is lacking a word which adequately describes the drafting and amending techniques used by Lawbuild, and that a new coinage may be needed.  Perhaps the Thirteenth Edition of the Concise Oxford Dictionary will include our suggested definition of the verb “to lawbuild”.

Acting for a developer on one of his projects, I recently came across a lengthy and obscure clause in an appointment drafted by his architects (or, more likely, their solicitors).  I would describe it as a “bespoke” draft, because it didn’t come from any standard precedent that I’m aware of.  As my eyes glazed over, I read:

It is not intended that the Architect should in any way be responsible to check or verify anything which it is not within the normal competence of a prudent experienced Architect to check or verify nor is it intended that the Architect should be obliged to employ other appropriately qualified professional consultants to give such advice; provided that if the Architect after consultation with the Employer’s other consultants is of the opinion that any matter arising relating to the Development is such that neither the Architect nor the other consultants can properly advise the Employer in respect of that matter then the Architect shall notify the Employer of that opinion and advise the Employer of occasions when it considers that the Employer should seek the opinion of others with suitable qualifications to consider the matter

135 words, but who’s counting?  I had to read it a couple of times to understand it, but I didn’t make any changes to it.  The principle seemed reasonable, at least for the particular project, and it’s not my job to improve other people’s drafting where it makes sense.

However, as an intellectual exercise – and at no expense to my client, of course - I decided to spend a few minutes redrafting the clause to make it shorter and more readable; in other words, to “lawbuild” it.  Here’s the result:

The Architect need not check anything outside a prudent and experienced architect’s normal competence but shall instead, after consulting the other professionals, advise the Employer to seek the opinion of suitably qualified persons.

As you can see, I reduced it to 33 words: a saving of 102 words, or 75%.  I believe I also made it somewhat more readable.  How exactly did I do all that?

The exercise is reminiscent of “précis”, where schoolchildren in the 1950s had to compress a lengthy prose passage while retaining its essential meaning, but the techniques are different.  Précis is a strategic and literary exercise; “lawbuilding” is a tactical and legal assignment.

If you re-read the original clause critically, you can’t help noticing masses of excessive verbiage, all of which can easily be translated into plain English.

To “lawbuild” the clause I replaced the wording in the first column with the text in the second column, added a little light punctuation, fairly ruthlessly deleted anything repetitious or non-essential, and then put it together so that it made sense.

Is this something you think you could do?  If so, why not have a go at reducing an even longer clause (169 words) to a manageable size while improving its readability?  This one’s from a draft building contract: a “bespoke” draft, like the architect’s appointment from which the first clause came.  (When you come across a “bespoke” building contract, by the way, you will often find it’s been prepared by a property lawyer using conveyancing precedents rather than by a construction lawyer using industry standard forms.)

Expressions with initial capitals (like “Extension Period”) are defined elsewhere in the document, but you don’t need to see the definitions; this is a drafting exercise, not a legal examination.  Here’s the clause you’ll be working on:

The Employer and the Contractor shall together seek to agree a fair and reasonable period for each Extension Period and when each such Extension Period has been agreed or (in the event of dispute) determined by an Independent Person acting as an expert in accordance with clause 13 each such Extension Period shall be granted to the Contractor and all the dates and periods in this Agreement which are expressed to be extendable by reason of such delay shall be treated as deferred (or further deferred if prior Extension Periods have already been granted) by such agreed or determined Extension Period and so that if the Contractor fails to comply with its obligations to achieve the matters the subject of this Agreement by the date specified in this Agreement referable to such matters but would have so complied but for the Extension Events giving rise to the relevant Extension Period then for the purposes of this Agreement the Contractor shall be treated as having so complied with such obligation

Your aim is to reduce it in size and make it clearer to read.  Incidentally, you will almost certainly need to retain the defined expressions.

When negotiating this clause in real life I actually managed to increase the number of words from 169 to 207; however, my mandate, once again, was not to improve the drafting for the sake of it but to include provisions I considered legally useful: for instance, I wanted the clause to say when the parties should seek to agree the period, and I wanted to adopt a more construction-friendly procedure in case they failed to reach agreement.

I’m not asking you to do any of that, because it’s lawyer’s work; but you don’t need a legal qualification to convert verbiage into plain English and “précis” it.

One final piece of advice: be ruthless, and don’t confine yourself to a “legal” style.  Even if you omit words which are theoretically essential, so long as the clause’s meaning is clear it will probably work legally; that is to say, a court or arbitrator won’t necessarily construe it literally but will try to give it the commercial effect which the parties apparently intended.

I will judge your contributions and name the winner in the next issue of The Lawbuild Letter, which will also contain my own modest effort.  And I will comment with my usual frankness on the texts published, so if you’d rather remain anonymous please say so!  No prize, but isn’t a special mention in The Lawbuild Letter worth any material reward?

(It has crossed my mind, by the way, that nobody may have read this far, but you never know.)

A glossary of construction law expressions: Q is for …

Quantity surveyor

A consultant, and either the author of the bills of quantities (in traditional contracting) or the compiler of the Employer's Requirements (in design and build).

Quantum meruit

Literally, “how much it’s worth”.  This way of calculating price arises under “quasi-contract”, where one person lets another person do work for him where there is no actual contract.

Letters

Fixed fee no more than guesswork

You suggest  that  we should be working with fixed fees rather than hourly rates.  This is fine as long as one can predict the scale of work.  As an architect involved with planning matters I know that projects can greatly change due to circumstances outside of our or the client’s control.  The initial estimate of time for a job can change by factors of two, three or even more.  Under these circumstances to give a fixed fee is nothing more  than guessing.  We do not live in a quantifiable world and there has to be some means of recouping additional expended time.  To a lesser extent builders are often faced with these issues especially when they undertake work not fully specified in scale or detail.

Architect, Hampshire

Of great interest in parts

Many thanks for The Lawbuild Letter, which is always of great interest in parts.
 
I am the Training Consultant for a firm of surveyors and responsible for getting their graduates through the RICS APC (Assessment of Professional Competence).   One of the things for this is the Assessment Interview where candidates have to answer all sorts of questions.

I have been taking the definitions from The Lawbuild Letter Nos. 9 to 12 to ask them in practice.  I would really appreciate it if you could organise to let me have the definitions given earlier.  I have put all those I have in a Word document which I give to the chaps to help with their revision before the Interview - after they have been asked the questions in a Mock interview.
 
Edward Prentice FRICS, Commercial and Industrial Property Consultant, Tonbridge

(Note.  All issues of The Lawbuild Letter, including the definitions or glossaries mentioned by Mr Prentice, are published on our website.)

Read and enjoy

I always read and enjoy your newsletters.

Sandy Mifsud, Design Management

Stephen Rudoff

On Saturday morning, 10th July, Stephen Rudoff, a media lawyer, died after being hit by a bus on Waterloo Bridge.  He was 49, the father of two girls, and also, with his wife Lizzie, a dear friend to my wife and myself.

Stephen was legal director at Spun Gold TV, and formerly controller of legal affairs at Carlton Television.  Directors of both companies issued a joint tribute: “As a compliance lawyer, he was thoughtful, careful and clever.  But most of all, the thing we will never forget is how often and how loudly he laughed – and swore.  He was a larger-than-life character who was great fun.”

Death notices by family and friends in the Jewish Chronicle referred to Stephen’s charisma, warmth and love of life, his kindness and sensitivity.

All these statements describe Stephen exactly – he was evidently much the same in almost any company – and they reminded me of some hilarious evenings we spent with him and Lizzie, especially when other lawyers were present.

But perhaps the most representative reaction came from a man who hardly knew Stephen, and who told Lizzie at the funeral, “I only met him for three hours, but I will never forget him.”

Business Network International^®

Lawbuild and David Lewis are a member of the Victoria (London) Chapter of Business Network International (BNI).

BNI is a business and professional networking organisation whose purpose is to generate quality referred business for its members.

To learn more, visit BNI Europe and BNI Victoria.

Newsletter

Want to unsubscribe?

To add your name to our mailing list, email Subscribe.

To remove your name from the mailing list for this newsletter, please email Unsubscribe (or request removal in a reply to the covering email).

Missed Lawbuild Letters Nos. 1 to 13?

Visit our articles webpage.  All past issues are there.

Pass it on

Please forward this newsletter to anyone you think might like to receive it. And we shall be glad to add that person to our mailing list for future newsletters if they will send us their email address.

Tell us

All feedback is very welcome. We would like to hear from you if you have any comments, queries, corrections or suggestions, but first read Publication of correspondence etc.

About Lawbuild

Lawbuild is a specialist construction law practice offering expert advice and services to anyone carrying out or lending money for construction, and to any buyer, seller, landlord or tenant of recently built or refurbished property.

We also enable commercial property solicitors to provide a construction service to their clients, and quantity surveyors to provide a legal service to theirs.

We do development work, not disputes or litigation.

Lawbuild’s principal, David Lewis, has been a solicitor since 1969 and has more than 30 years’ experience in contracts and construction law.

Contact information

Here's how to get in touch with us: