Please note that I am licensed only in Texas.
A lawyer in these circumstances can serve two distinct functions on your behalf.
The first function is as your counselor. He can review the facts with you and give you better advice on what kinds of legal claims you may have and how strong they seem to be, i.e., how likely you would be to win on those claims in court. (Your claims may not be limited to defamation, libel, or slander, but may also include false imprisonment, for example.) He can also help you evaluate your potential damages. When someone has a physical injury, usually that person's medical bills are themselves an objective part of their damages, but they also can suggest an appropriate range even for the subjective elements of damages like pain and suffering. Here, though, unless you can show lost wages, pretty much ALL of your damages are subjective. That doesn't mean that they're trivial or that they're not just as real as damages that can be easily measured in dollars and sense, just that they're more a matter of opinion. A good lawyer who has a sense of your community and the way past juries may have responded to similar cases will simply have a much better informed opinion than you might have as a layman (or than I would have as an out-of-state lawyer).
The second function is as your advocate. It's encouraging that the regional vice president "wants to know how he can fix this," and you may be correct in interpreting this as an invitation on his part for a settlement demand from you. His interests and your may run parallel to some extent, because he no doubt wants to avoid the expense of litigation, bad publicity, and the like. But in other respects, his interests are exactly the opposite of yours -- he presumably would like to settle a dispute for the lowest possible sum, if he's actually willing to offer up anything. Because of that, you can't count on him to be your advocate. You may try to be your own advocate, and you may be successful to some extent at that. But as a general rule, people who negotiate claims for a living do a better job of it than people who don't.
Hiring a lawyer may also improve your credibility in the store's eyes, especially if the lawyer is reputable and experienced.
The overall question then becomes: Would the benefits to you from having a lawyer to be your counselor and advocate and to add credibility to your claim justify what it would cost to pay the lawyer? You could, of course, hire someone by the hour to consult with you and help you evaluate and present your claim, and to file suit if necessary to pursue it in court. That quickly becomes pretty expensive, however. Most folks in your position would instead tend to try to hire a lawyer on a contingent-fee basis, in which he's paid a percentage of your recovery and only gets paid if there IS a recovery.
If you think this really is a big deal -- if there really were several people who saw you in these humiliating circumstances, for example, and you believe it's permanently affected their opinions of yours -- then you ought to at least look for a lawyer to consult with you in more detail about your case. Many lawyers offer free initial consultations for a case like yours. Perhaps after speaking with one or more -- and I encourage people to not necessarily hire the first lawyer they speak to, but to shop around and consider negotiating even on such things as the contingent fee percentage -- you'll conclude that giving up, say, one-third of your potential recovery is too high a price to pay for the benefits a lawyer would bring. But in most serious cases, the value a lawyer brings -- as counselor and credible advocate -- increases the recovery far beyond the amount of the lawyer's percentage fee. (If you could settle for $1000 yourself, for example, and the lawyer instead gets you $3000 of which he takes only $1000, then you're twice as well off for having hired him.)
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