Do I Really Need an Attorney?

A common question asked by clients who find themselves in litigation, and rightfully so, is do I really need to hire you or can I just handle this myself?  They say that he who represents himself in court has an idiot for a lawyer and a fool for a client.  I am not sure of that proverb’s origin, but I’d bet it was a lawyer who first coined it. Logically speaking one does not need to represent himself to be a fool and I have heard plenty of lawyers referred to as idiots.  The truth is, like everything else, it depends on the circumstances.  There are circumstances where a business must be represented by a lawyer and there are circumstances where a lawyer is not required.

            First a caveat:  the intent of this article is not to provide legal advice but to educate a business owner facing possible litigation.  The only free legal advice I will provide is always consult with an attorney to evaluate your claims and defenses and check the applicable statutes of limitations anytime you are facing possible litigation.  After the consultation the choice is yours whether you wish to hire the attorney or represent yourself. 

            It is called pro se which is Latin for on one’s own behalf and in the legal system means one who represents oneself in a court proceeding without the assistance of a lawyer.  Please don’t confuse this with pro bono which means to provide legal service without compensation particularly for the public good. 

There are a variety of courts and administrative boards with jurisdiction over a Pennsylvania business, this article will address a few of the more common venues:

1.         Federal District Court.  These courts hear cases involving issues of federal law such as violations of federal environmental laws, trademark infringement, and violations of one’s constitutional rights.  Federal District Courts also hear cases arising out of state law where the parties are citizens of different states and the amount in controversy is $75,000 or more (referred to as diversity jurisdiction).  All you really need to know is that if you find that your business is a party in a Federal District Court proceeding hire an attorney.  Federal laws and procedures are very complicated and only experienced attorneys should be attempting to wade through the legislation and procedural rules.  Also, the amount of money at stake makes hiring an attorney well worth the investment.

2.         Federal Bankruptcy Court.  The most common scenario we hear, especially in today’s economic environment, is “another business owed us a substantial amount of money and we just got this notice that they declared bankruptcy.  Now what?”  Without going through all the nuances of the federal bankruptcy code, I offer the following:  You do not need a lawyer to file a proof of claim, but you should consult with a lawyer to determine if you are entitled to an administrative claim or some type of priority claim, otherwise you could be leaving money on the table. A lawyer can also advise you whether or not you may pursue a claim against the debtor notwithstanding the bankruptcy.  Also, it goes without saying that you would need an attorney if you intend to seek bankruptcy protection for yourself or your business.

3.         Pennsylvania Court of Common Pleas.  These are the county level courts that are the trial courts in Pennsylvania.  Pennsylvania law requires that a corporation may appear in court only through an attorney at law admitted to practice before the court.[1]  Therefore, if your business is a corporation you need to hire a lawyer or face not only losing the case based on this procedural violation, but face a penalty for the unauthorized practice of law.  The same is probably true for a limited liability company because the justification is the same, although no Pennsylvania appellant court has yet addressed the issue.  Nevertheless, it is definitely not worth the risk and you should hire an attorney.  If your business is sole proprietorship or a partnership, you are permitted to represent yourself[2].  This is where you need to weigh the pros and cons, which of course depend on the circumstances.  Here is a short list of considerations:

• What is the amount of money at issue?
• Did the other side hire an attorney?
• What is your knowledge of the law and do you have the time to spend educating yourself on the applicable laws and regulations including case law and procedural rules of court?
• What are the facts of the case?

Even for sole proprietorships and partnerships, for 99.9% of the cases before a Court of Common Pleas a business should hire an attorney to represent it for the following reasons:  At this level, it is important to enter the proper evidence and preserve issues on appeal.  In other words, you really have only one bite at the apple and mistakes can be costly.  Plus there is probably enough money at issue to make the investment worth while.

4.         Magisterial District Court.  These are sometimes referred to as small claims courts because they conduct non-jury trials concerning civil claims where the amount in controversy does not exceed $8,000.  The risk of pro se representation before this court is significantly reduced because a party can appeal a decision de novo to the Court of Common Pleas.  De novo basically means the parties on appeal can present additional evidence to the appellant court.  Therefore, if you failed to have the proper witness testify or if the District Judge would not allow a critical document to be considered based on a rule of evidence, you get a fresh start on appeal and you can even hire a lawyer for representation on appeal.  In Magisterial District Court proceedings corporations and similar entities, along with partnerships and sole proprietorships, are permitted to represent themselves.[3]  Whether the benefits outweigh the risk depends on the circumstances.

5.         PHRC/EEOC.  The Pennsylvania Human Relations Commission (state) and the Equal Employment Opportunity Commission are considered the clearing houses for discrimination claims. Legally, a business can represent itself before these administrative agencies.  Whether that is advisable again depends on the circumstances.

6.         Unemployment Compensation.  When an appeal is taken with respect to unemployment compensation a hearing is held before an unemployment compensation referee.  In 2005, the Pennsylvania Commonwealth Court held that an employer must be represented by an attorney in these proceedings[4].  That same year the General Assembly enacted legislation permitting non attorney representation.[5]  In 2007, the Pennsylvania Supreme Court overturned the Commonwealth Court’s 2005 decision[6].  That decision finally settled the issue and today employers are permitted to represent themselves in unemployment compensation hearings.

In sum, sometimes a business must be represented by an attorney and sometimes the law permits the business to represent itself.  Whether the business should represent itself depends on the circumstances.  That said, I cannot over emphasize the importance of consulting with an attorney before attempting any pro se representation.  Litigation is expensive, but not as expensive as missing a statute of limitations or failing to plead a cause of action.  Also, in a breach of contract case the parties often agreed by of their written contract to mediate and arbitrate any disputes arising out of the contract.  A party who enters a defense would be waiving its right to mediate or arbitrate the case and would thereby be consenting to the jurisdiction of the court. Reager & Adler, PC has attorneys experienced in representing bsuinesses before all of the above mentioned courts and agencies, and would be happy to evaluate your situation and give you options on how to resolve the dispute.