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Retaining Good Law Information

Working to level the playing field between shops and insurers, Chicago attorney Patrick McGuire has created a program where he’s at the beck and call of shops in need of law advice. To the many shop owners he’s helped educate, McGuire is collision repair’s answer to Ann Landers.

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For a lot of shop owners in Illinois, attorney Patrick McGuire is their top source in solving the Rubik’s Cube that is the law. Four years ago, McGuire developed a program where, for a monthly fee, shops can put him on retainer. For this fee, shop owners attend a monthly roundtable seminar and can call the attorney whenever they have an urgent law-related question and need McGuire’s advice. He is, to the many he’s helped, the Ann Landers of collision repair.

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But is it possible for an attorney (at least, not one like those you see on prime time television) to be one of the good guys? Judge for yourself.

BSB: When did you become a lawyer?

McGuire: I graduated and was licensed for Illinois in 1995.

BSB: What was your role as an attorney before doing what you do now?

McGuire: I worked for a firm doing insurance coverage work, but from a defense side. They were environmental clean-up cases, and we’d try to figure out whether the insurance company had to pay for the environmental pollution, clean-up or sickness that was caused by it.

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BSB: Was the work like what was done in the movie Erin Brockovich?

McGuire: Yeah. It was a lot like that movie A Civil Action, with John Travolta. The main lawsuit goes on while a separate case or negotiations take place. These involve the insurance company saying, “If we’re found liable in the original proceedings, is there going to be insurance money to pay for that judgment or our defense?” So the two cases usually follow parallel tracks. The work usually involved some site investigation, figuring out what exactly happened and at what site, who knew about it and at what point they knew it.

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BSB: Did you do a lot of field research?

McGuire: Investigators would do that sort of thing and then we’d go through it to try to pinpoint when a company had knowledge of a specific event, or when they should have known that what they were doing was either safe or dangerous.

BSB: How did you go from that to doing what you do now?

McGuire: I was pretty much low man on the totem pole at this other firm, and we had some consumers who contacted us about a fire loss in their car. By then, they’d already been without their car for 10 months. So I started looking into that, and it got me involved in the collision repair industry. When I was doing my claim investigation and my background on that case, I ended up meeting some shop owners and talking with them, trying to figure out what type of issues they were facing on a daily basis.

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BSB: What did you notice about collision repair shops?

McGuire: I noticed that consumers didn’t really know how to approach an insurance claim and know what a policy says and doesn’t say. I also noticed that shops were the ones put in the middle of this lack of understanding between insurers and consumers because they were holding the car and were responsible for doing the repairs. But it’s really the consumer’s insurance claim, but they’re only going to give authority to do work in instances where the insurance company is willing to pay for it. So you have a triangular relationship where the rights and responsibilities of all the three parties — the consumer, insurance company and body shop — are all intertwined. You can’t look at one without considering the effects on the other two.

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BSB: What sort of information can you give shops to make this triangular relationship easier to manage?

McGuire: Well, if they understand what their rights and responsibilities are going into the mix, they’ll be able to act professionally and knowledgeably and hopefully prevent misunderstandings.

BSB: Why wouldn’t consumers and shops have this information if it’s so important?

McGuire: From the consumers’ end, they’re statistically involved in an auto collision every seven or eight years. So why would they spend their time keeping up to date on something that’s only going to affect them periodically, at best? From the shops’ perspective, they can’t really [keep up to date on all the laws that affect them] because it’s not cost-effective. To have an attorney go out and research all the laws that apply to your business would be unbelievably expensive. Secondly, although a bunch of laws exist in books, we know that in practice it can be a whole different story. Here in Illinois we can show specific laws and cases to an insurance company, and they say, “That’s not how we do it, so that’s not how it’s going to be done.” It wouldn’t be cost-effective for one shop to go out and hire an attorney, or have one on staff at all times to answer these sorts of questions as they pop up.

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BSB: What are the services you provide to shops?

McGuire: First is monthly seminars. My clients and I will take a specific topic and talk about it for an evening. For example, shop liability. What are your responsibilities? If you’re told you’re not getting paid for something, how can you put the paperwork in place so that you won’t be held liable for not doing something you weren’t paid for. Liability can change based on the type of claim you’re talking about.

For example, Illinois recognizes a dramatic, fundamental difference between first-party and third-party claims. A shop that’s not aware of that difference could make some pretty egregious errors in judgment. Take, for example, aftermarket parts. Many policies state the limit of liability is the cost to repair or replace like kind and quality parts. What constitutes like kind and quality is something for the courts to decide. But at least, in a first-party situation, it’s something that has to be dealt with.

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Take a third-party claim, where someone is rear-ended by someone else. There’s no reason for that person to be told they can’t have the car repaired with original equipment parts. So, from a shop’s perspective, if you’re looking at a third-party claim and use A/M parts because you think it’s all you’re going to get paid for, and you don’t take steps to make sure the consumer is fully aware, then trouble can start. If a problem develops with that part three or six months down the road, that consumer is going to come back to you at the shop and say, “You didn’t use OEM parts. Why not?”

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In a first-party situation, let’s say you use A/M because the insurance company says, “All we’re going to pay for is non-OEM parts.” Six months later the part is rusting out. The customer can come back and you can contact the insurance company and say, “Hey, you insisted on the non-OEM parts. They’re rusting out.” That insurance company should step up and pay to have it fixed properly. Same thing happens in a third party claim. The insurance company is probably going to say, “We had no right to tell you what type of parts to use in the first place. If you didn’t insist at that time on getting the best parts and repair, then that’s your problem, not ours. You’re on your own.”

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BSB: Are these seminars a lecture format or roundtable discussion?

McGuire: It’s more of a focused roundtable. It starts with me giving an overview of the law, but at any time, people can chime in with a situation they experienced, and the shop owners will share information on how they dealt with it in the past and what they see as a problem cropping up in that area.

BSB: Can your client shops call your office for information? Are you at their disposal if they have a question?

McGuire: Yes. That was the thinking behind this program. We get enough shops in a region involved, and they each paid me a [$300] monthly retainer. That way, at the beginning of the month, I know how much time I can devote to their issues. They go to the seminar and learn the overall issues and how to recognize and spot issues. And then if they find themselves in a situation or predicament at some point during the month, they can call me without worrying about how much it’ll cost or whether it’s worth calling an attorney on that particular matter. Because if you got a $50 issue, I don’t want them saying, “It’ll cost me more to call an attorney.” That’s why it’s all up front in retainer.

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BSB: Is it ever an emergency situation, where they say they need an answer today?

McGuire: Oh, all the time. (laughs). One of the best was a guy who painted an airplane. It was for a corporation, and he was owed about $20,000, and they stopped payment on the check. The issue was whether the plane was going to fly away before he got paid. It’s a lot of real “put out the fire” kind of stuff.

BSB: Any plans to increase the scope of the program?

McGuire: Yeah, it’s underway. I’m probably going to start doing some more seminars in Illinois in additional geographic areas to make it available to other shops. Right now — and I guess this is one of the things that reinforces in my mind how valuable it is — I have clients who travel well over 100 miles each way to one of these seminars, and that’s after work. So I know there’s a need and desire for this information. And then with respect to expanding out of state, I’ve had discussions with attorneys and law firms in other states on replicating the program’s model. I can consult with anyone in any state. I just can’t show up in their courts [since I’m licensed to practice law in Illinois]. Since this program is more educational rather than focusing on litigation, there is definitely opportunity for me to do this in other states.

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BSB: What do you think it is about your approach your clients like?

McGuire: I think because it’s based on education. It’s not like we’re trying to create problems. It’s letting people know how to run their business more professionally. I guess it could go both ways. It avoids confrontations with insurers, and sometimes it creates some. But at least if it creates some, it makes shop owners feel they’re capable of handling it. A client once told me, “I feel like I’m in control of my business for the first time ever.” So that’s what it is. I recognized real early on that shops on the whole don’t have a lot of extra money to spend on services. So it has to be cost-effective and give them more bang for their buck. I help them become more profitable when they understand the laws, and it also helps protect them from an expensive lawsuit that arises because they didn’t have, for example, a simple document they should have had signed. Otherwise, they can find themselves spending several thousands of dollars defending themselves on one piddly lawsuit when they could have spent that much retaining me for an entire year and end up making money to boot.

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I think it’s good for a shop to come and get educated and have continuing access to me, because you’re not going to learn everything in a three-hour seminar. Sometimes you don’t realize it until it pops up a few months later. And you think, “Man, what did he say about this?” But I also realize that’s not practical for certain shops that are either way downstate or for whatever reason they don’t want to get involved in an ongoing thing like this program. So I’ve done some one-day seminars [open to all shops] to get them up to speed on things in a short amount of time.

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BSB: How often do you give those one-day seminars?

McGuire: It all depends. In the next few weeks, I’ll be doing a bunch, but then I may not do any more for the rest of the year. It depends on whether a given area has enough shops that are interested.

BSB: How do you know enough shops in an area are interested?

McGuire: We’ll send out fliers and information. Or a shop from a given area will contact me about a problem. Then if I’m able to help them with one thing, I’ll say, “Here’s what I do. If you have other like-minded individuals around you, there may be some opportunity to get this on a long-term basis.”

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BSB: What have you learned about body shops and the industry?

McGuire: I think the stereotype that shops are back-alley types of people sitting around is completely wrong. The professionalism is really there in the shops today. That’s just stuff that’s not always portrayed. There’s a lot of good things about shops. The level of technical expertise is something I think people take for granted until they know exactly what they do and how many different things they have to master to get a car repaired.

BSB: What do you see in your client shops that gives you the greatest feeling of accomplishment?

McGuire: A significantly large number of my clients have expanded their operations either through new buildings or by adding on to their existing buildings over the last couple years. And I think my clients feel they’ve definitely profited and used it to allow them to grow bigger and better.

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BSB: What’s your favorite movie?

McGuire: Let’s see. I’m Irish so I like Braveheart.

BSB: What’s your favorite law-related movie?

McGuire: I think a lot of what I do has some correlation to the Rainmaker, where they discover internal practices of an insurance company.

BSB: So you’re like Matt Damon, right?

McGuire: Well, I wish I could say so. (Laughs) I don’t have half the problems he has.

BSB: How hard is the Bar exam?

McGuire: It’s definitely rigorous. It’s unlike other tests because you never know the exact subject the questions are going to be on. I think it has applicability even in the collision repair industry. Sometimes problems develop that you could have never foreseen in a particular job and you’re being asked to deal with it quickly and effectively or you’re in trouble. But the test is doable, because there’s a lot of attorneys out there.

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BSB: Anything you’d like to add?

McGuire: I think the overall idea, and I give credit to this to my clients, is it makes sense for shops to band together to learn about some of these issues. And again, I have shops that are known as big DRP shops and in the seminars they’re sitting next to someone who is fiercely independent. They’ve realized there’s value in the information that goes above and beyond what their particular market strategy might be. And I think something all shops must endeavor to do is get the industry up to a baseline level of knowledge. It’s an industry where if your competitor doesn’t know what he’s doing, it can and will hurt you. So there’s both reward in getting yourself up to speed, along with your competitors, or you’re all susceptible to being taken advantage of or having your life more difficult than it really needs to be.

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Mike Lawrence is associate editor of BodyShop Business.

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