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Is speaking directly with opposing counsel during settlement negotiations dangerous despite a strong confidentiality agreement?

Raleigh, NC |

I've found myself in a bit of a mess separating ownership of three LLCs that I operate with two of my best friends, one of whom wishes to move on now and is only speaking through their lawyer. I presume I'm well covered by the following agreement even speaking directly/one-on-one with their lawyer during initial settlement talks. Most importantly, I want to make sure that nothing said during settlement will come back to bite anyone should negotiations break down and we end up in court. Anything I should fix in these terms or watch out for when speaking with their lawyer thereafter?

Note: You can highlight a term and click Insert > Comment to add comments directly to any terms of the proposed agreement:

https://docs.google.com/document/d/1I3cqxEsYLaS8C1WLC0wrJGEHEvASXRMrBRyPdsmhFXE/edit

Attorney Answers 3

Posted

Anyone in "a bit of a mess separating ownership" and in which one of the other parties has already retained counsel shouldl seriously consider retaining their own attorney.

This is already a contested matter in which the parties have different interests. The idea that communications with opposing counsel will not "come back to bite anyone should negotiations break down and we end up in court" is almost certainly unrealistic.

The NC and Raleigh bar associations can assist you with referrals.

The foregoing is for general information purposes and does not establish an attorney-client relationship.

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Asker

Posted

Thank you sir. The point of the agreement shown is to ensure that no settlement communications can be used in court. I am well aware that anything I disclose during those negotiations will become common knowledge to my opponent, even if it is not directly admissible (the same info might otherwise be discoverable, and thus easier to discover). I'm also confident in my position as far as the possibility of a full on legal battle goes. The worst thing that is likely to happen if that battle occurs is that it will sap a great deal of the resources that are being battled for. Which is why people prefer to settle in the first place. So back to the essence of my question: Are there any obvious holes in the agreement? And most importantly, exactly what types of attacks would an experienced lawyer be watching out for that I wouldn't? I am more than happy to be logically persuaded that I really do need a lawyer on hand at this early stage. And although I'm sure you couldn't even come close to naming every likely scenario, a few concrete examples that even a smart layperson probably never would have thought of would be much more persuasive than a simple assertion that a lawyer is needed. I certainly don't fault you for it, seems like a knee-jerk reaction with very good intentions, but I would appreciate a bit more thoughtful response from you or anyone else reading this.

Posted

You need a lawyer. Your question is so shockingly naive and wrongheaded that it is hard to know where to start.

The lawyer for the opposing party is absolutely going to use the things that you say against you both in the negotiation and in court. That is his/her job. Even without revealing anything that should not be revealed, the lawyer is going to use the information that you share to hurt you. You are setting yourself up to get eaten alive.

This is no place for amateurs. Hire a lawyer.

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Asker

Posted

Thank you sir. The point of the agreement shown is to ensure that no settlement communications can be used in court. I am well aware that anything I disclose during those negotiations will become common knowledge to my opponent, even if it is not directly admissible (the same info might otherwise be discoverable, and thus easier to discover). I'm also confident in my position as far as the possibility of a full on legal battle goes. The worst thing that is likely to happen if that battle occurs is that it will sap a great deal of the resources that are being battled for. Which is why people prefer to settle in the first place. So back to the essence of my question: Are there any obvious holes in the agreement? And most importantly, exactly what types of attacks would an experienced lawyer be watching out for that I wouldn't? I am more than happy to be logically persuaded that I really do need a lawyer on hand at this early stage. And although I'm sure you couldn't even come close to naming every likely scenario, a few concrete examples that even a smart layperson probably never would have thought of would be much more persuasive than an attack on a person's assumed naivety or wrongheadedness. That just encourages one to dig in deeper. I certainly don't fault you for it, seems like a knee-jerk reaction with very good intentions, but I would appreciate a bit more thoughtful response from you or anyone else reading this.

Seth A. Blum

Seth A. Blum

Posted

No attorney worth having is going to give you the answers that you seek in this forum. First, you are not supplying the information necessary to answer the question intelligently - and you shouldn't. This is not a privileged communication. Anyone could be reading the discussion and lots of people do. Second, you are asking lawyers to give you for free what we sell. Please note, I am not trying to get your business. I do not practice this area of the law and so have no financial interest in what you do next, but you are going to hurt yourself if you do not have a lawyer helping you with your side of the negotiation. You may be able to convince someone to give you an initial consultation for a small fee or even no fee. Please don't try to do this on your own. You are out of your depth.

Asker

Posted

Thanks again, Seth. I've had an initial consultation with an experienced attorney in this field, in which I provided the basic details of my case and asked question after question for well over an hour. And despite my best efforts, I came out having learned nothing that I didn't already know or suspect. I loved the guy and felt he was easily at least as competent as any other lawyer I could have been referred to in the field (a sincere complement). I'm also more than happy to pay for unbundled services and advice. I'm simply not very interested in retaining an attorney without clear evidence that I actually need one front and center at this time. Thus, it's in the interest of any attorney worth his salt to demonstrate that someone like me does in fact need one for early settlement negotiations, and not simply to assert such. Does that make sense to you?

Posted

The Confidentiality Agreement you seek us to comment about would be giving you free legal advise, and also be the unauthorized practice of law for any attorney not admitted to practice in NC.

As a general principle, it appears to be acceptable, but none of us can comment upon how informattion discussed may be utilized should a settlement not be reached, whether you will disclose information that will lessen your outcome or increase one of your partner's outcomes.

I would hope a court would not allow information revealed during negotiations to be used in court, but it is like telling a jury to disregard a remarked stated by an attorney or witness. One the statement has been made-such as "When did you stop hitting your wife."- the jurors' minds have been poisoned. The opposing counsel now knows something he may not have known before and can secure this information through discovery.

HIRE AN ATTORNEY!! The old addage goes: He who represents himself has a fool for a client.

The foregoing is not intended to be legal advice upon which you may rely as I have not been retained for this purpose.

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