The Deepwater Horizon oil rig explosion on April 20^th and the uncontrolled fouling of the Gulf of Mexico are creating legal liabilities and an environmental clean-up of unprecedented proportions.

While oil industry executives are receiving a tongue lashing in Washington, D.C. and evidence of incompetence (spill plans for the Gulf talking about walruses and contact info for a deceased marine scientist) are fodder for late-night comics, there is nothing funny about the damage being done to the ecosystem and those whose livelihoods of those who depend on it.

BP says it will pay to fix the problem; but, the true proportions of the problem are unknown because until the well is capped tight the problem continues to grow and spread with the currents and the tides. 

How much will it cost to clean up?  How much will it cost to pay for lost wages and business?  Will BP have the resources available to pay it all?  Will it file for bankruptcy protection?

A number of good articles have recently been written about the topic.  I recommend Roger Parloff’s interview with attorney Christopher B. Kende.  It is a legal primer that lays bare what statutes apply to this situation and whether liability caps will be triggered.

Another good read on the subject of what options are available to BP to limit its legal liability is The Deal Professor’s piece in The New York Times.  It reminds us that while we may want to think of BP as a single monolithic,  hulk with deep pockets, it is really more of a patchwork quilt consisting of subsidiaries with much shallower pockets.

While some boast that BP has the financial strength to raise capital and weather the current unpleasantness; I know from my own experience in working with environmental engineers that clean-ups always cost much more than you expect.  One engineer confided to me that you should take your “best” estimate, multiply it by three and then add 10% to start getting into the ballpark of actual costs.

Putting aside for a minute the $20 billion escrow idea that is currently being floated, the good news for BP is that it will take years to sort out all of the liabilities and the out-of-pocket liability payments that go with it.  With proper cash flow management those payments can be spaced out over years, if not decades.  It gives BP an opportunity to generate the income necessary to pay for it all.  That of course assumes it will be able to salvage enough of its brand to make customers want to open their wallets.  That, of course, is another unanswered question.

Regardless of the actual amount of legal liability, there is one cost that you CAN take to the bank.  It’s the cost of the army of lawyers BP will employ to fight all of the lawsuits that have been and will continue to be filed, to lobby against legislative changes in the existing laws, to prepare executives for Congressional hearings, to process claims, etc.  Those outside legal costs will be HUGE.  They will not be deferred and they will be continuous.

Maybe they’d like to plug THAT hole with some solid project management techniques like the kind that Rob Thomas and I will be talking about tonight at 8pm Eastern, 5 pm Pacific, on Ask the No Nonsense Lawyer where our topic is: How to Control Outside Legal Spending.

You don’t have to be BP to join us.  The program is complimentary.  You’ve got nothing to lose except the cost of a phone call and some legal costs.  Click here for more information.

When business legal spending starts spiraling out of control it’s hard to know what to do next. Learn how your business can bring its legal spending in line with its budget and its business goals. 

Register today for the complimentary teleseminar How to Control Outside Legal Spending, on June 16, 2010 at 8 pm Eastern, 5 pm Pacific when The No Nonsense Lawyer™ , Hanna Hasl-Kelchner interviews expert Rob Thomas, Vice President, Strategic Development for Serengeti Law. 

Who should attend:

•           Entrepreneurs and business owners with up to 80 employees

•           CFOs and other finance professionals interested in containing legal costs

•           Attorneys responsible for outside counsel spending.   

Lawsuits can take on a life of their own and devour precious time and resources.  It can leave you feeling frustrated, helpless and financially drained.  That’s why you’ll want to learn:

• How to align budgets with project management;
• How to find law firms that offer big city quality at down home prices;
• How defining the rules of engagement leads to better results, and
• The most common mistakes clients make in dealing with outside lawyers that can drive up costs, plus much more. 

Register by visiting askthenononsenselawyer.com and submit your single most important question about how to control outside legal spending to Hanna for her to ask Rob Thomas during their live teleseminar on June 16^th.

Rob Thomas knows legal project management inside and out.  He is the architect of Serengeti’s online matter management/e-billing system, a system that has become the most widely used and highest rated legal platform in the world.  It is currently being used by more than 100,000 legal professionals in 180 countries to efficiently track legal spending, documents, budgets, progress, and results.

More than a technology expert, Rob is also a lawyer who before joining Serengeti had more than twenty years of diverse experiences as a practicing attorney.  He worked on complex litigation and corporate finance transactions for the largest commercial law firm in Seattle.  He served as managing partner of the firm, and coordinated national projects involving teams of both in-house and outside counsel. 

Rob is also the author of Serengeti’s Outside Counsel Survey – a project that is done in conjunction with the Association of Corporate Counsel and provides an inside look at the latest trends in-house professionals use for managing work with their outside counsel.

What this means for business owners and entrepreneurs is that you’ll get a rare peek under the hood of how lawyers manage their own and you’ll develop more confidence about what you too can ask for when negotiating with firms to keep your legal costs under control too.

Register today at askthenononsenselawyer.com.

Fraud represents a very serious breach of trust and poor judgment in the exercise of legal literacy.  Because it occurs at the intersection of law and finance, fraud can be very costly to your business.

Being able to spot warning signs and stop fraud in its tracks can therefore be a useful and life-saving business skill.  That’s why I wanted to share with you this link from the Journal of Accountancy.  It’s a quiz designed to test your Fraud IQ.  Take it and see what warning signs you may have been missing and then take steps fill in the gaps.

A Sonic Drive-In in Grapevine, Texas pays $31,000 to settle a recent sexual harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).  Professional Building Systems of North Carolina pays $118,000 to settle a racial harassment case filed and Celestica Inc., an electronics manufacturer, pays $112,000 to settle a disability discrimination case.  These laws have been on the books for decades; yet, they’re routinely violated.

Failed business policies can subject your company to thousands of dollars in legal liabilities.  Learn how to make your business policies more memorable and more effective.

Register today for the complimentary teleseminar How to Successfully Market Business Codes of Conduct, on April 21, 2010 at 8 pm Eastern, 5 pm Pacific when The No Nonsense Lawyer™, Hanna Hasl-Kelchner, interviews business policy expert Carole Basri.

 Who should attend:

• Entrepreneurs and business owners with up to 80 employees
• Human resource professionals
• Ethics and compliance professionals

What you will learn:

• How to write policies that grab your employees attention,
• Why non-lawyers are the key success to effective compliance,
• Tips to make your business code training more palatable, and
• The most common mistakes employers make and how you can avoid them.

Ms Basri helps businesses create and improve their internal compliance and ethics programs in her role as president of the Corporate Lawyering Group and Corporate Lawyering Association.  She has worked with major such as Dun & Bradstreet, Cendent, and Dannon, among others improve their compliance programs.  She is also an adjunct professor of Corporate Law at the University of Pennsylvania, School of Law. Let her share her years of experience and insights with you. 

Click here to register for How to Successfully Market Business Codes of Conduct.  Submit a question you would like to hear answered during the interview and receive the call-in information free.