Don’t Do Business with Crooks

A couple of months ago, PG had a post titled Don’t Do Business with Jerks, explaining that this was one of the more common non-legal pieces of advice he gives his clients.

Recently, PG was reminded of another common piece of non-legal advice he gives to his clients.

Don’t do business with crooks.

If you do business with a crook, sooner or later you’re almost certainly going to regret it.

Certainly, some crooks appear to be selective with their targets. You might feel that, since you don’t fit the target profile, you’ll be safe.

The problem is that given the choice between a friendship/relationship and getting something he/she wants, ultimately the crook’s gonna crook.

A crook may be honest in a dozen small business matters. That is an admirable series of decisions, but it doesn’t necessarily mean that the crook isn’t a crook any more ever again, that he/she has turned their life around and will never crook again.

It may mean that the crook has decided that whatever non-monetary or monetary value involved in the non-stealing relationship might be present, such potential is speculative when compared to the direct financial benefit of simply stealing something. Or perhaps the crook decides to see if he/she can get more money by not stealing, thinking that stealing is an option if the first path doesn’t pan out.

Yes, crooks can change their ways, turn their lives around and never steal again. Or they can change their ways, turn their lives around, then revert for one reason or another. The reason may be one that makes financial sense or it can simply be that the buzz involved in pulling off a good heist is just too tempting to resist.

While there are many honest publishers, there are also a few dishonest publishers. While there are many honest literary agents, there are also a few dishonest agents. (In the interest of equity, there are many honest attorneys and a some dishonest attorneys.)

The publisher/author relationship is a potential opportunity for thievery because the publisher has control and access to all the information about sales, etc. The author knows only what the publisher discloses.

Yes, most (but not all) publishing agreements include audit clauses, but conducting an audit using a qualified accountant is nothing close to cheap. A forensic audit/auditor is more expensive than a standard audit. (A forensic audit is an examination and evaluation of a firm’s or individual’s financial records to derive evidence that can be used in a court of law or legal proceeding.)

If the publisher is working hard on short-changing an author, the publisher may have taken effective steps to prevent an auditor from discovering the truth.

Perhaps the person/organization has either initiated or been on the receiving end of several lawsuits. Perhaps the person/organization is constantly involved in public disagreements with others over money or other topics. For PG, both of those are large red flags.

One specific type is an individual who has been married and divorced several times with the breakups involving lots of fireworks, nasty accusations, big legal bills, etc. Again, such things happen even if both spouses are perfectly upright and honorable in every way, but long experience indicates that the probability of this being the case is not high.

Without getting into politics, if a client came to PG for advice on entering into a business deal with Donald Trump, given Trump’s history of lawsuits and other public disputes with business partners, PG would likely remind the client about the benefits of a quietly efficient business and personal life.

All of this notwithstanding, people can and do change, turn over a new leaf, repent of past bad behavior, etc.

In such cases, PG suggests that his clients not be the first new business partner of the repentant counterparty. It’s one thing for a person to change their behavior when the sky is blue and birds are singing. However, if a storm appears on the horizon, newly-acquired virtues may take a back seat to unfortunate old habits.

To be clear, PG is not advocating permanent banishment of someone who has made bad decisions or serious mistakes in the past. However, if a client wishes to be a good gal/guy and help someone who is down on their luck, PG suggests that a purely charitable act, one undertaken with no expectation of a return or profit, may be a wiser approach. With no expectations, one may avoid disappointment and estrangement if the repentance is less permanent than anticipated.

You may want to consider writing person with a dodgy past a check instead of giving them one of your books to publish.

PG’s bottom line is still Don’t Do Business with Crooks.