Raise Your Right Hand1 Nov, 2001 By: Ronelle Ingram imageSource
Raise Your Right Hand
you stay in business long enough, your company will be sued; it is part of the
American culture. Rather than viewing this as a sad commentary on the state of
American business, think of the probability of being sued as part of your
overall business plan. I have just spent the past year of my life as an expert
witness on a very complicated lawsuit involving an office machine dealer, a
leasing company, and an end-user. I have read over 30,000 pages of depositions,
testimony, and exhibits. I will use no names or specific circumstances to
project both the guilty and the innocent. I would like to share some of the
lessons I have learned from this experience.
business needs a good working relationship with a lawyer they trust. This
attorney needs to be well established in the legal community; you never know
when you will need a referral for a great litigator or criminal attorney. If you
don’t currently have a corporate legal counselor, start looking for someone
you can trust before the need arises. A good source to find a legal counselor is
to ask a friend or business associate for their recommendations.
You Need To Ask Yourself Prior:
Have you checked your business insurance?
Do you have coverage that will help pay for some or all of a lengthy
Does your multimillion-dollar umbrella include the cost of covering a long-term
Have you checked on business interruption coverage as part of insurance policy
Do you have a company policy in place that dictates how to deal with customers
who double pay an invoice?
Do you send periodic account statements to customers that have credit balances?
Is this policy one that you would be proud to share with twelve strangers who
have never run a business?
IRS is not the only agency that may need to look through years of back business
transactions, have you thought about the following:
Do you keep back-up documentation for all business transactions conducted over
the past 5 to 7 years?
Can you easily find a signed lease on a deal that was made sixty months ago?
How could you prove a customer agreed to a fair market buyout with the end-user
being responsible for the cost of the equipment return?
record keeping within your business can help prove your innocence or re-enforce
Good Business Plan
need for appropriate business conduct is necessary in the overall context of a
good business plan; the management of each company must decide what is
appropriate. Would you feel comfortable allowing a private investigator to make
copies of hundreds of your business transactions? Would the honesty and
integrity of your business practices be upheld when viewed by 12 impartial
in a position of authority and knowledge must take responsibility for reviewing
the business transactions your company represents. If the reviewer of sales or
leases receives a direct bonus (monetary gain) from the deal that person may be
viewed as an impartial judge to the correctness of the deal. Don’t make the
fox be responsible for protecting the hen house. No matter who in the company is
the final reviewer, the employer is ultimately responsible for the deals that
are written by an employee. Long after a rogue employee has quit and gone to
work for a competitor, your company will be left with the responsibility of
defending their actions. The company’s owner will be the one holding the
preverbal bag if the situation gets out of hand and winds up in court.
business practice dictates the need to carefully inspect each deal. Make sure
all the terms of a lease have been completed: Length, buyout, monthly charge,
fees, insurance, taxes, penalties, etc. Does each part of the transaction make
sense? Too much profit can be just as suspicious as not having enough money in
the deal. The simplest of office equipment deals can become very involved once
it is scrutinized by the United States legal system. All that fine print on the
back of the lease or sales order has a life of it’s own once a bailiff
announces, “Court is in session.”
will be vitally important if the big deal starts to unravel in the future. The
more information that is clearly enumerated on a sales or lease document, the
easier it is to prove your intentions. Consistent shoddy or incomplete filling
out of sales or lease documents becomes a history of ambiguity by intent. Every
line and box should be completely filled out or appropriately checked. If a
problem appears, the faster you accept responsibility and take action, the
easier and cheaper it will be to rectify the situation. Trying to cover-up or
compound a problem usually makes the matter worse. Lawyers, depositions,
transcripts, expert witnesses, courier services, detectives, aggravation, and
lost of working hours, are far more expensive than righting the errant deal as
soon as you realize the good deal has gone bad. Forgery or accepting signatures
of inappropriate people will usually come back to haunt you. Consistently
dealing with the same person, within the customer’s office, looks better in a
court of law than having a half dozen different people involved in the
decision-making. If a document states, “Must be signed by a corporate
officer” or the leasing company requires a “corporate resolution,” it is
the leasers’ responsibility to follow the written rules. Normally, a lease is
a binding legal document once it is signed. Once the deal is funded, greater
complications come into play. A five-year lease allows sixty opportunities for a
customer to realize something is not right.
at every deal from the standpoint of having to defend your actions in front of
twelve social security recipients. Court is rarely an economical solution to any
problem. Profit can be made in the office machine business without defrauding
your customer. If a deal sounds too good to be true, it probably is. Don’t let
the fox watch the hen house.
an ideal world, we all hope that each business transaction can stand on its own
merits with integrity and fairness to both the buyer and seller. When a company
lowers its standards of business ethics, allowing price gouging, used equipment
being represented as new, improper servicing, double billing, bait and switch
then no one wins.
this past year, I have witnessed three separate teams of lawyers diligently
working for hundreds of hours on a case that ultimately proved that a lot of
people did a lot of things that ultimately cost a great deal of money. The
customer received no long-term value. The dealer lost a former good customer,
forever. The leasing company had to conduct a long term, far away investigation,
and trial. The over crowded judicial system had to squeeze in another case.
Twelve jurors spent two months of their life learning about CPCs, MAs, PMs
buyouts, upgrades, addendums, drums, toner, and developer.
are such things as a lose, lose, lose situation. An ounce of prevention is worth
ten tons of cure when it comes to the legal system. I truly believe there will
be no winners in this case. Dozens of people wasted hundreds of hours, spending
thousands of dollars, to prove everyone shared in the guilt of not taking the
responsibilities necessary to following through on good business practices.
much was wasted, so little achieved. None of this would have happened if
one-tenth of the time and energy spent on proving innocence and guilt had been
used, to follow internally established rules of ethical business practices
within the dealership, leasing company and customer’s business.
over a year, I have tried to objectively view the past actions of others in the
terms of 20/20 hindsight. I am glad I am not a lawyer, judge, court reporter,
bailiff, jury member, court clerk, or parking attendant. I am proud to be an
office equipment service manager.
trial has emphasized my responsibility to always strive to do each part of my
job in the most professionally ethical way possible. The diversity and daily
challenges of running a business center around keeping our customer’s
expectations satisfied while creating a fair and ethical profit for our company.
After one year of my life being involved with this court case, my personal
beliefs of standards of the professional business ethics have been drawn much
sharper. Making the right decision is more than just an ethical judgment. Making
the wrong business decision can have catastrophic repercussions. Make sure you
are not guilty of endangering the reputation of your company or infringing upon
the legal, moral, and ethical rights and expectations of your customers.