“Preventive” Legal Planning – New Concept of Periodic Legal Checkups – Quick Facts

By March 21st, 2022

Blog No 144 

March 22, 2022

By Mack W. Borgen
Author, The White Book (2022); The Writings of a Lifetime (2021); Dead Serious and Lighthearted – The Memorable Words of Modern America (Three Volumes) (2018-2019); and The Relevance of Reason – The Hard Facts and Real Data about the State of Current America (2 Volumes) (2013). As Advertised in The New York Review of Books and Recipient of Eight National Book Awards

Quick Facts

 U.S. Household Net Worth Percentiles of Middle, Upper-Middle, and Wealthy Classes

One’s net worth is only measure – and a relatively poor measure – of one’s safety, security, and happiness, but for those who track their net worth, the following is a schedule of the approximate household net worth percentages in the U.SD.

Top 1%           $11,100,000 and above

Top 5%           $  2,585,000 and above

Top 10%         $  1,220,000 and above

Top 15%         $    795,000 and above

Top 25%         $    405,000 and above

 Mean Net Worth of Middle, Upper-Middle, and Wealthy Classes

        Wealth Class Category         Mean Net Worth

      Middle Income                        $104,700

        Upper-Middle                        $201,800

              Wealthy                              $608,900

Source: DQYDJ (Financial and investing websource); Frankenfield, J., Investopedia (10/18/2021).

Back When Zoom Wasn’t a Verb – Alternative Post-Pandemic Work Policies

Many corporations are evaluating their “post-pandemic” policies on remote work. Pre-pandemic, just 4% of employed Americans worked remotely. That percentage increased to nearly 50% by May 2020. To date, the corporate plans appear to be widely divided. Some companies (e.g., Apple, Netflix, Citi, and Goldman Sachs) have established deadlines for full office returns. Some corporations (e.g., Meta, Disney, and Lyft) are “hybrids” and are offering remote flexibility in order to retain talent. Lastly, some corporations (Shopify, Coinbase, and Slack) have deemed themselves remote-first companies. It is this author’s opinion that this sorting will continue for at least a couple of years. However, the likely outcome will be some variants (sorry to use that word) of “hybrid.” While remote work will be far more tolerated – indeed, at times, encouraged, most corporations will demand some in-office returns. A cautionary warning: if at least some regularly scheduled, in-office time becomes required by most corporations, the U.S. may have to endure another round of population and housing relocations.  Source: Robinhood.com. (March 14, 2022)

Humor for the Day

They said, “Do what you love, and the money will follow:”

So, I ate some chocolate cake and drank some tequila.


Source: My thanks to my friend, Marty Kauth.

The Concept of Periodic Legal Checkups and

The Wiser, “Preventive” Use of Counsel

We live in an increasingly complicated, fine-print, documentary, “Click Here” world. Many Americans will never be forced into litigation over any matter, however most Americans at some point in their life struggle with if-and-when issues as to the advisability of retaining counsel.

However, lost in the event-driven use of counsel is the possibly far wiser approach of regularly having one’s business, professional, financial, and familial affairs overview scrutinized – even if briefly for an hour or two, by a general business attorney. As will be explained below, by preventively using attorneys, clients may be able to avoid costs, achieve advantageous protections for themselves and their family and business, and – most importantly — become apprised of second or third options with respect to many matters.

Too often attorneys are retained either too late or not at all. This recommendation is based upon that costly reality.

This imprudent use of attorneys is due to three things: (1) the manner in which many attorneys themselves seem to primarily practice only “responsive” law; (2) the manner in which certain types of transactions are traditionally closed without the use of legal counsel; and (3) very bluntly, the darn cost – or expected cost – of engaging counsel.

But in some instances, this should change. Attorneys should rethink how they present themselves. They should expand the types of services which they offer. Likewise, individuals should consider regularly and routinely engaging counsel for periodic legal checkups; for even the limited services described below.

Allow me, first, to draw some parallels. We Americans do not think twice about having annual medical check-ups. Many aspects of health and well-being are approached from a preventive perspective. When we visit a doctor, sometimes all is good – the “no-news-is-good-news” visit. Maybe, additional bloodwork is ordered. Maybe, additional tests are needed. But still, we understand the necessity of preventive, responsive care. It is just something which prudent patients do. In a similar manner, we have our teeth cleaned every six months. We get our cars tuned up every 5,000 miles. And on and on.

But unwisely, we normally do not use legal counsel to even generally or lightly overlook our personal or familial finances and affairs except in certain limited contexts such as estate planning. Due especially to perceived cost, attorneys are too infrequently used in a preventive-care manner. Instead, counsel retention is event-driven – being sued, a contract dispute, starting of a new business, or the death of or divorce from a loved one.

It is here recommended that some individuals regularly having their “legal life” regularly and periodically reviewed from a legal affairs perspective. This would be particularly true in at least four instances: (1) mid-career individuals over the age of 45; (2) those with any level of substantial wealth; (3) those who own (or are considering purchasing) a business or equity position in a business as a shareholder, partner, or LLC member; and (4) those who own or have an interest in (or are considering purchasing) any real property other than maybe their personal residence. Also note that this is already done by many corporations and businesses. General Counsels sit in on many meetings, and nearly everything involves the “run-it-by-legal” step.

Admittedly, seeing the “right type” of attorney is important. Many law practices, just like medical practices, are highly specialized – antitrust, tax and estate planning, family or elder law, litigation, personal injury, and so forth. Thus, just as one normally sees a medical internist annually, one would normally want to see a general business attorney for this type of general liability and family documentation legal checkup review.

This recommendation is not made to seek additional work. Instead, it is because attorneys are too often brought in too late – after the lease is signed, after the property is sold, after the deal is done, after words are exchanged, after emails are sent, after the loan is made, after the employee is hired, after the event – whatever it is – has either happened or started to accelerate.

In the context of a periodic legal check-up of one’s affairs, an attorney will rarely be able to give specific advice without investigating the matter or reviewing any underlying documents. But that does not mean that useful advice cannot be rendered or that prudent cautions and considerations cannot be identified.

Such time-constrained, limited scope check-up counseling ideally would require only an abbreviated retention agreement, and the parties would have to make some special termination agreement in the event of a discovered conflict of interest.

Nevertheless, a brief, regular, once-every-year-or-two legal checkup can be invaluable. After even a cursory review of one’s assets, business, family structure, age and so forth, an attorney oftentimes can provide invaluable advice about things the client should consider. Even more important, the attorney sometimes can expand the horizon of options and alternative approaches to any matter a client wishes to address. Lastly, in even a two-three-hour overview, an attorney may identify risks that the client had not previously considered. The meeting could wander from the advisability of various types of life, long-term care, and general liability insurance to the preventive measures one might want to consider with respect to various business matters; and from the possible need for some tax, estate, or gift planning to cautions with respect to the leasing or sale of property.

Some firms will not want to offer this type of service. That is unfortunate, but it is probably true. In addition, any prudent attorney will only be able to render generalized advice based upon a client’s presentation of any given situation or matter. But after even an hour- or two-hour discussion, the client can sometimes quickly sense whether it may be advisable to engage the attorney further. Lest it not be obvious, all preventive actions and many prudent steps can only be taken early on – but not later or after the fact.

For many years, my practice focused in part upon real estate transactions. Thus, allow me to use the above “preventive” retention advice in the context of even a routine residential purchase or sale. Traditionally, such matters have been handled by real estate brokers and mortgage lenders. Possibly, it should be left that way. However, this author believes things have changed; risks have grown.

Today’s residential purchases are oftentimes $1.0MM or $2.0MM or more. These are substantial investments. And they have become more complicated. Especially with the passage of endless state laws, more issues can rise in many contexts.

Continuing with this example, this author recognizes that one is “just” buying a home. However, in today’s market, the amount of money involved is roughly equal to that necessary to launch a small business. The cost of buying a $1.0MM family home is now roughly equivalent to buying about 1,603 roundtrip tickets from Los Angeles to Paris (Single roundtrip ticket = $624). Color me crazy, but if a client were entering into a transaction to buy 1,603 tickets to Paris, it would seem that – even with the presence of an experienced real estate broker – counsel review may be advisable.

In even a limited two- or three-hour generalized legal review of the residential home purchase, what might be learned in this context? The list such things is lengthy – contingency dates; inspection reviews; strict, tax-driven personal usage limitations if it is a second home; leaseback liabilities and complications (especially with the covid lease termination protections available to tenants in some states); ADU impacts; renter’s insurance in the event of a leaseback; time-stamped video recording of house condition; costly propane and freon fill-ups; payment for re-keying; and on and on.

Again, this article is NOT offered as an empty encouragement for the use of attorneys. Instead, it is written because knowing when to retain and how to use attorneys can be a complicated, costly, and frustrating matter. Thus, this article is offered merely as an encouragement for the better, preventive use of attorneys. Anticipation of an issue is immensely easier and more cost-efficient than reaction to an issue. If we readily and almost without thinking, see our doctors once a year for medical checkups (whether we think we need to or not), it is recommended that we view our relationship with our family or business counsel in a similar manner — although I think that once every two years may, in many cases, be adequate. Also, a great amount of time, money, and anguish can be saved by developing a lasting and trusting relationship with an attorney or firm through the use of such periodic legal checkups.

The truth is:

I do not know which is more important – Saving money or having peace of mind –

Both are good.

And best of all,

Both are achievable.

And periodic legal “checkups” every couple of years may help.

A lot.

TO READ MORE OF MY, NOW 144 BLOGS, YOU ARE INVITED TO GO TO www.mackwborgen.com and just Click “Blogs.”

All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical without the prior written permission of the author.


This entry was posted on Monday, March 21st, 2022 at 10:32 am and is filed under Latest News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.