Scott Wolfe Jr. – October 23, 2012
The question of whether to hire an attorney or a service like Zlien to manage your mechanics lien compliance or file a mechanics lien is a controversial and complicated one. As the CEO of Zlien, a non-law firm, legal document preparation company, and a licensed construction attorney with an active law firm practicing construction law (Wolfe Law Group), I think I fit into a small group of people who can see the issue fairly from both sides. Here is my take.
Part I: Preliminary Notice and Lien Management (Winner: Lien Service)
A few months ago I published an article on this blog asking attorneys “How Can Clients Handle Preliminary Notice Compliance?” The question was simple, highlighting a legal compliance challenge confronted by building suppliers and subcontractors across the United States. I went out and solicited comments from attorneys practicing construction law and specifically asked them to address the mentioned challenge. Every attorney answer side-stepped the issue.
They can’t hire an attorney in every state to track and send notices. They can’t do it in-house because the compliance framework is a mess. What do they do?
What is this challenge? It’s that many subcontractors and suppliers cross state lines, have a high volume of projects and work on varying types of projects within varying tiers. The mechanics lien and preliminary notice laws are different on every project for these contractors and suppliers. Take a huge Fortune 500 electrical supply company, for example, and you’re talking about 2000 – 10,000 projects per month. How does this company handle this challenge?
They can’t hire an attorney in every state to track and send notices. They can’t do it in-house because the compliance framework is a mess. What do they do?
In this instance we have a clear winner. Using a preliminary notice and mechanics lien compliance management service like Zlien solves this issue, and it’s the only type of offering out there that can help. Attorneys do not offer the service, and doing it in-house is a non-starter (even with software). So, here we go with the Pros and Cons:
| Attorney Pros | Attorney Cons |
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| Lien Service Pros | Lien Service Cons |
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Part II: Uncomplicated Mechanic Liens (Winner: Lien Service)
Having an attorney send preliminary notices for you is actually a non-starter. I believe, it’s an absolute non-starter. If you called my law office – which specializes in construction law – and asked us to send a preliminary notice, we would tell you to go find someone else. It’s not worth the time or trouble, and there isn’t any way to quote a reasonable price to do this service.
Mechanic lien claims, on the other hand, are do-able for law firms, and lawyers frequently file these claims. In a survey of mechanics lien data we conducted across the United States based on mechanic liens filed between 2004 and 2009, we found that approximately 25% of mechanic liens are filed by attorneys. Unlike a preliminary notice request, if you call Wolfe Law Group and ask for a mechanics lien claim filing, that is something it could do.
The question here, though, is should you get an attorney to file your mechanics lien claim?
Filing a mechanics lien claim can be complex and technical. As evidence of this just scan through this blog. It contains over 300,000 words about mechanics lien claims and the issues you must consider when preparing your filing. For all the complexities, however, a very large majority of mechanic lien claims are run-of-the-mill easy filings.
As evidence of this, consider the mechanics lien survey we completed earlier this year, which found that most mechanics lien claims (a high percentage) were paid within 3 months without any further legal action. We file thousands of lien documents at Zlien and we very rarely encounter a mechanics lien challenge to the document itself, if ever. Bottom line: When you file a mechanics lien with a lien service like Zlien, the document is almost always going to be correct. The issue is what data you put into the document.
Right off the bat, 38% of the attorneys we contacted didn’t return our call. Of those we finally spoke to, 55% of those attorneys had a pretty unreasonable or unworkable response.
When you use a lien service you are representing yourself and making legal decisions on your own. So, when it comes time to set out the amount of your lien claim, for example, you’ll be required to self-determine whether or not to include lien costs, interests and other expenses in your claim. If you make the wrong decision it could affect your claim depending on how the state construes lien claims.
Help on these questions, however, is readily available. They just take time to go through.
Getting an attorney to help you with a mechanics lien, however, is not an easy alternative. We actually conducted a survey of construction lawyers and construction law firms to see just how easy or hard it is to get a mechanics lien filed with them.
Right off the bat, 38% of the attorneys we contacted didn’t return our call. Of those we finally spoke to, 29% wouldn’t disclose a fee for a mechanics lien without scheduling an initial consultation (sometimes, a week or two away). 11% didn’t offer the service of filing a mechanics lien. 15% wouldn’t give a flat fee and would only offer to do the service at an hourly rate that was more than $200/hr. All in all, of the 62% that would speak to us, 55% of those attorneys had a pretty unreasonable or unworkable response.
Not a single attorney or law firm would do the lien for a price close to Zlien’s $295 rate, nor did they have an efficient way to collect your mechanics lien information like Zlien’s online order form. In fact, there are so many pros to filing a mechanics lien with a company like Zlien, many of our clients are frequently attorneys filing for their clients!
This brings us to the Pros and Cons:
| Attorney Pros | Attorney Cons |
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| Lien Service Pros | Lien Service Cons |
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Part III: Complicated Mechanic Liens (Winner: Construction Lawyer)
Not every mechanics lien claim is simple, and this is where the construction attorney shines.
Not every mechanics lien claim is simple, and this is where the construction attorney shines.
Attorneys are great at helping companies deal with complicated legal situations. If you’re owed a lot of money on a complicated project, with complicated disputes at play, it’s probably best to go consult with a construction attorney to wade through your issues and make sure you are proceeding with the correct remedy at the correct time.
When all the parties to a project have lawyered-up and there are tons of disputes, the last thing you want to do is make a misstep within your mechanics lien and have the opposing attorneys pounce on your mistake. Getting a construction attorney to review your situation is key.
A word of caution, however: You want to hire a construction attorney, and not just any attorney. Attorneys are a dime a dozen, but many know absolutely nothing about mechanic lien claims and construction disputes. You’ll need an attorney well versed in construction dispute issues and mechanics lien filings to help you out.
The Pros and Cons:
| Attorney Pros | Attorney Cons |
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| Lien Service Pros | Lien Service Cons |
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