MONEY 120 - LAWYERS

THIS IS MY 120^TH BLOG ON UNDERSTANDING MONEY TOOLS

August 12, 2017

This blog will be slightly different.  I normally would not criticize an American profession so thoroughly, however in light of my work through the years I have seen such negative evolvements that it justifies such. I will call it “denigration” with justification.  The definition to denigrate something is to unfairly belittle, criticize or attack, but when I sight examples you might agree with me.

What is the profession?  It is the legal profession….lawyers, attorneys, attorneys at law, etc. no matter the terminology.  I entered the true business world in 1970, this not including my giggle businesses growing up with newspaper and magazine routes, mowing lawns, etc.  In this blog I will track some of what I see or have experienced with the legal profession.

Why jump on this profession now?  I am taking necessary education courses to keep my real estate licensing current in Arizona.  The toughest licensing and education requirements are in the most active states like California, Florida, Texas and Arizona so legally we cover things pretty well.  Class after class, mainly regarding codes, regulations  and state laws; the changes are drummed into us.

In 1970 when I entered the field of real estate in Colorado things were so different.  We rarely needed a lawyer for representation of transactions.  A real estate agent or broker brought buyer and seller together and acted as a minor intermediary in the transaction.  Many times a title company was not necessary and lawyer’s opinion on deed and issues sufficed.  Contracts consisted of one page, many deals made temporarily on handshakes of good faith.  Individuals took responsibility for their own actions and honesty meant something.  Today’s world is so different. I sit in class, an instructor asks how many active licenses with attendees, and it is shocking that most older, honest realtors are getting out of the business because of what has transpired in the industry.  For young real estate agents and brokers this is the new baseline as they aren’t familiar with the “good old days”.

According to internet information as of 2011 there were over 1.2 million lawyers and attorneys in the USA, and schools graduating about 45,000 more per year.  Crazy!  Other countries like Germany, France, Japan do not have near that ratio to their total populations, nor do lawyers make nearly the same amount of money.  According to Google the entire country of Japan has about 23,000 lawyers with a population of about 126 million.

Here is where my subjectivity comes in.  I could take lawyers chasing every industry and making a ton of money, but I will stick with real estate.  Lawyers want in on the deals, if there aren’t enough deals let’s create some problems.  Foremost is they have educated the public that people do not need to take responsibility in life or for themselves.  If things don’t go as planned, let’s sue and make some money, or a lot of money for you.  Today, in Arizona 1 in 8 real estate transactions end up in arbitration or lawsuit, again crazy!  In the late 1970’s I was on the Denver Board of Realtor’s Ethics and Arbitration Committee.  I was bored as we had so few issues, not now.

Our simple real estate contracts of one page are now14 pages of legalize and going to get longer.  Lawyers have forced states to not permit agents to practice law in any aspect.  Real estate contracts/agreements need to be in writing, and the agent cannot write any language other than state approved.  When purchasing a property a person really should get a home inspector who is licensed, more fees and costs.  The inspector should be licensed locally, as each city has its own building codes.  Home pricing?  Give range not specific price (California does this and Arizona is heading in that direction).  Being asked to recommend a plumber, electrician, handyman, don’t do it, you could be sued if something goes wrong.  In Arizona a handyman can only do jobs up to $1,000.  Over that limit people need to hire licensed contractors that will cost more money.  Lawyers saw to that law.  If anything goes wrong along the way throughout the transaction a lawyer will jump on it, and “class action” lawsuits result naming buyer/seller, depending on plaintiff or defense, agent, broker, title company, contractors if involved, inspectors, etc……everyone.

Hot topics?  In the late 1970’s the hot issue was asbestos and lawyers jumped on that.  Cost a fortune to remediate although contained asbestos was not dangerous.  Jump to other hot issues with building, mold, radon gases, and more.  There are about 125 molds, although only a couple are dangerous to one’s health.  Growing up in the Midwest just about every  basement in older homes had mold.  Radon gases?  Yes, number 86 on the atomic chart and in soils.  Today in parts of the Midwest where radon gases may be higher you can’t sell a home to someone buying who needs a mortgage without a radon test.  If above 5 particles per billion, remediation needs to be completed before you can get a loan from a bank.

With real estate development, which I have been heavily involved in, a company needs several types of lawyers to accomplish anything; it is unfortunately expected and necessary.  The best planning lawyers in Phoenix right now run $1,000/hour, smaller cities like Milwaukee where I have a development run $500/hour. In the West we need water rights lawyers involved in outlying community development.  Big firms have specialists in various fields all costing a fortune.

I will end this stating that I am sure you get the point.  I think America is fed up with the legal system and the racket.  Every night there is an ad on the television from prescription drugs to motorcycles followed by a law firm stating they can sue for the negative affects from these drugs, or injuries resulting from motorcycle or car accidents.  Wonder why our insurance rates are so sky-high?  We have created a monster profession.  Judges were once lawyers, many Senators and Congressmen are lawyers, the Supreme Court Judges were lawyers……we will never get back to some sort of normalcy!

How does this relate to my blog of Understanding Money Tools?  Plan ahead for the unexpected, many issues involving the legal profession!