How to Choose Your Attorney
LOOK FOR EXPERIENCE
A good Chapter 11 attorney will identify problems before you file, help you address and correct these problems where possible, and make sure you understand your successful exit strategy before setting you on course to reorganize your business and your debts. You should only trust your situation with an attorney who is highly experienced specifically in Chapter 11 and one that will answer your questions clearly. Remember that most Chapter 11 cases fail. Your goal is to be one of the 33% or so that succeed.
ASK THE RIGHT QUESTIONS
Obviously, there are many, many attorneys who will file Chapter 11 cases and that can “talk a good game.” So be prepared to ask some tough questions of any attorney that you are considering for your reorganization case. Here are some suggestions–
- Ask the attorney how many Chapter 11 cases he/she has filed and over what period of years.
- Ask how many of those Chapter 11 cases ended in plan confirmations or some similar successful result.
- Ask how experienced the attorney’s support staff is in handling Chapter 11 cases and ask to meet them! A well-trained support staff is crucial in dealing with the Chapter 11 reporting requirements, deadlines, and typical problems that arise. Remember, experience in filing Chapter 7 and Chapter 13 cases, or representing creditors in bankruptcy is not the same thing as experience in representing debtors in Chapter 11 reorganization cases.
- Ask for references from former (or existing) clients who will speak with you about the attorney and the attorney’s staff. How many Chapter 11 cases is the attorney currently handling? Five to ten Chapter 11 cases is a full time load for an attorney and that number assumes the attorney’s support staff is experienced. If an attorney has more cases than that, your case will not get proper attention.
- Expect to spend an hour with the attorney. Experienced Chapter 11 counsel charge for their time and for these consultations. Remember you are paying for the attorney’s time and knowledge. Here are some things you should cover in that first meeting: Ask the attorney how the business can successfully emerge from Chapter 11. Identify crucial creditors whose support you may need in order to get the plan confirmed. Discuss the voting requirements for the Chapter 11 plan and also the steps creditors may take to counter your plan.
MAKE SURE THE RELATIONSHIP MAKES SENSE
When you’ve chosen the right attorney, expect to pay a significant retainer fee. The retainer amount should take the attorney through the first 3 to 6 months of the case (depending on how active the case may be) and these fees will be reviewed by a judge. If the retainer fee you are quoted is too low, it is not a good sign. The attorney may not be experienced or may simply want to “get” your case in the door in order to meet his or her office payroll. When the retainer runs out, the attorney who has taken too small a retainer needs to bring in more and more cases in order to make ends meet, and that attorney will not pay sufficient attention to your case. That is a recipe for a failed Chapter 11 case. You should want success and your attorney should expect to be successful.
It is very easy to get into Chapter 11. The Debtor pays a filing fee and the case begins. The hard part is the exit strategy. And choosing the right lawyer is crucial to developing and executing that strategy. Make sure that the attorney you choose has the specific experience to get your Chapter 11 reorganization plan confirmed!
If you are ready to sit down and plan your successful Chapter 11 reorganization case, contact us and Mr. Fox will discuss the process and your situation with you in detail.