For many business people, the thought of dealing with an attorney, even for day-to-day bread and butter business matters, brings forth feelings of apprehension, anxiety, or worse. But it doesn’t have to – and shouldn’t – be that way. The business person’s transactional lawyer should be their secret weapon of choice for planning, strategy, and growth of their business.
Part of the dread that business people have in dealing with lawyers on a regular basis is generally easy to identify. Cost. Most lawyers cost a lot. They charge an hourly rate, so every time you pick up the phone to ask a question about the legal aspects of your business, the clock is ticking, loudly, through every minute of your mind. Lawyers also tend to be thoughtful, thorough, and gregarious, so though most are mindful of their clients’ time, and therefore, money, they rarely use half-sentences or incomplete thoughts. This is all well and good when providing legal advice, but it does tend to make clients even more conscious of the clock ticking away on a billable hour.
Another reason that business people are generally hesitant to utilize their business lawyer for planning and strategy is that they, and their lawyers, are used to operating on a reactive basis. Many lawyers are called in once a deal has been created in principle by the business person and his or her counterparty, making the lawyer more a drafter of a deal than a crafter of a deal. When a lawyer is brought in after a deal has been struck, the basic parameters are often set and it is difficult if not ethically prohibitive to change them.
A third reason that business people find their relationship to their lawyer less than optimal is that their lawyer may have only a partial understanding of their business. Lawyers often are called in for specific matters and don’t get the “big picture” of how one particular deal may fit in to the strategic plan of the company. Over time the lawyer may glean some idea of what the business goals and objectives are, but that is more by osmosis and experience than a clear understanding of what’s going on in the business person’s head or business plan. This can lead to a sense of isolation regarding each transaction that puts emphasis on points that are not critical and misses opportunities to extract added value on something not seen as a company priority for the long term.
One final reason that business people and their lawyers do not always have optimal relationships is that they lack a common vocabulary and experiential background. Most lawyers go from law school to law firm without stopping in businesses to work along the way, and most business people have never worked at a law firm. The way each field of endeavor operates is subject to the constraints and standard practices of its participants, and law firms and businesses frequently operate within different parameters that would not make sense outside of their field.
These are the most basic contours that I think have contributed to the use of business lawyers in a less strategic, less consultative manner on a daily basis than would be of benefit to most businesses.
That said, none of these reasons is irrevocable or unfixable. It will take some determination, creativity, flexibility, and, if truth be told, vision, on the part of both attorney and business person to create the kind of symbiotic relationship that optimizes the value of having legal counsel for your business in the first place.
Here are some ways of thinking about the above issues that I have used with my own clients to great success, that can be used by others who have the desire to improve the attorney-client value equation and satisfaction level for all involved.
First, so much as possible, take a hard look at pricing other than based on an hourly rate. If you truly want to form a meaningful context-driven relationship together, attorney and client need to be more involved with one another. That takes time. And time doesn’t work to anyone’s advantage when the goal is to use as little of it as possible. There are various other mechanisms for billing, including retainer, project oriented, value based, and more. The type of billing mechanism is less important than the fact that there is a built-in comfort level that the business person will use the attorney as much as he or she really needs to in a way that will get all questions answered before they become of issue and that enables the attorney to glean as much information as possible about the big picture goals and the daily ruminations of the business person. There is the need to think like a team even if people are not sitting in the same office. Communication is the key and good communication takes undivided attention—and time.
Next, business people, especially entrepreneurs and “idea” people, frequently use the “ready-fire-aim” method of business planning. That is, they are off and running long before they know what they’re running with, the implications of what they’re running, and whether there is potentially a better way to run their business. It’s a rush to get out there and go. But there’s a simple methodology that I have used for all of my business career, which includes running several multimillion dollar and multi-location businesses. It’s a three-step method that is simple to state, and almost never used. Think. Plan. Do. In that order. It’s amazing how much traction a business can get just by figuring out what to do and how to do it before it actually does so. It sounds ridiculous. But if you look at the way the vast majority of businesses operate, you’ll see that actually this method is only used some of the time. And, when it comes to young or entrepreneurial ventures, hardly ever. When a business works from this model, there is plenty of opportunity to engage your lawyer in the thinking and planning stages. That helps the lawyer become much more valuable and knowledgeable when it comes time to get things done. Talking to your lawyer or even using your lawyer in the early stages of deal-making yields great advantages. Not the least of which is the perspective that a lawyer can bring before you dive right in to something.
Third, don’t be afraid to use your lawyer as a counselor. Many attorneys use the title “Attorney and Counselor at Law.” They are only as good as the information they get—and what they can pull out of you. So, make sure that you don’t keep your attorney in the dark about your plans, needs, deals in the works. Tell them the hopes and dreams you have for your business. They often share those hopes and dreams with you. Think about it pragmatically. A happy, healthy business is the best thing for a bread and butter transaction attorney. The more good things going on in the business, the better. The more pieces of the puzzle you display for the lawyer, the better he or she will be at providing insights about how best to fit it together. Just as you would expect your accountant to find ways to save you money on taxes and plan for future events, you could expect your lawyer to help you limit liability and plan for future legal obligations. There needs to be a proactive approach to a successful relationship between business person and business lawyer, and that proactivity needs to go both ways. It includes, again, clear and continual communication. If the lawyer knows what you want to achieve, then he or she can help find the best mechanisms and approaches available from the legal world to get you there.
Finally, you have your choice of lawyer, just as you have your choice of accountant or receptionist or television channel. Choose one you like and that suits your needs and interests. If you want to have a lawyer that can understand your perspective, your decisions, your dilemmas, choose one that has been in your shoes, running a business. There are a few of us out there with as much experience on your side of the desk as on ours. Or, choose one who has a deep understanding of your particular industry. Or your geographic location. Or your customers. Or your personal quirks and preferences. While it’s sometimes difficult to tell when you and your attorney are going to make it for the long haul, it’s much like dating. You know when you’re getting what you want out of the relationship—and when you’re not. Ask for references and call them. Find out what it’s like to be working with the lawyer over a long time. Find out how many clients the attorney has and how long he or she has worked with each one. Does the attorney provide in-depth, personalized services? Is the lawyer a creative problem solver? Has the lawyer been involved with various stages of the company’s growth and development? Through good times and bad? In sickness and in health? You get the idea. A lawyer who has a solid list of satisfied clients that have been with him or her for a significant period of time is a better bet.
This article just points out a few of the most basic elements in getting the most out of a business legal relationship. Every individual business person and every lawyer has his or her own special set of circumstances, peculiar likes and dislikes and operating styles. My goal was simply to indicate that there are ways to make the lawyer-businessperson relationship as valuable, rewarding, lifesaving and meaningful as any other consultative, strategic relationship in your business. When thinking about a business you spend a good part of your life in, it seems worthwhile to make sure that those you choose to help you make it successful are able to do just that. Searching for a legal match made in heaven doesn’t have to be hell. But it does require effort, and, like all good relationships, the more shared understanding and clear communication you have, the better it will be.
Part of the dread that business people have in dealing with lawyers on a regular basis is generally easy to identify. Cost. Most lawyers cost a lot. They charge an hourly rate, so every time you pick up the phone to ask a question about the legal aspects of your business, the clock is ticking, loudly, through every minute of your mind. Lawyers also tend to be thoughtful, thorough, and gregarious, so though most are mindful of their clients’ time, and therefore, money, they rarely use half-sentences or incomplete thoughts. This is all well and good when providing legal advice, but it does tend to make clients even more conscious of the clock ticking away on a billable hour.
Another reason that business people are generally hesitant to utilize their business lawyer for planning and strategy is that they, and their lawyers, are used to operating on a reactive basis. Many lawyers are called in once a deal has been created in principle by the business person and his or her counterparty, making the lawyer more a drafter of a deal than a crafter of a deal. When a lawyer is brought in after a deal has been struck, the basic parameters are often set and it is difficult if not ethically prohibitive to change them.
A third reason that business people find their relationship to their lawyer less than optimal is that their lawyer may have only a partial understanding of their business. Lawyers often are called in for specific matters and don’t get the “big picture” of how one particular deal may fit in to the strategic plan of the company. Over time the lawyer may glean some idea of what the business goals and objectives are, but that is more by osmosis and experience than a clear understanding of what’s going on in the business person’s head or business plan. This can lead to a sense of isolation regarding each transaction that puts emphasis on points that are not critical and misses opportunities to extract added value on something not seen as a company priority for the long term.
One final reason that business people and their lawyers do not always have optimal relationships is that they lack a common vocabulary and experiential background. Most lawyers go from law school to law firm without stopping in businesses to work along the way, and most business people have never worked at a law firm. The way each field of endeavor operates is subject to the constraints and standard practices of its participants, and law firms and businesses frequently operate within different parameters that would not make sense outside of their field.
These are the most basic contours that I think have contributed to the use of business lawyers in a less strategic, less consultative manner on a daily basis than would be of benefit to most businesses.
That said, none of these reasons is irrevocable or unfixable. It will take some determination, creativity, flexibility, and, if truth be told, vision, on the part of both attorney and business person to create the kind of symbiotic relationship that optimizes the value of having legal counsel for your business in the first place.
Here are some ways of thinking about the above issues that I have used with my own clients to great success, that can be used by others who have the desire to improve the attorney-client value equation and satisfaction level for all involved.
First, so much as possible, take a hard look at pricing other than based on an hourly rate. If you truly want to form a meaningful context-driven relationship together, attorney and client need to be more involved with one another. That takes time. And time doesn’t work to anyone’s advantage when the goal is to use as little of it as possible. There are various other mechanisms for billing, including retainer, project oriented, value based, and more. The type of billing mechanism is less important than the fact that there is a built-in comfort level that the business person will use the attorney as much as he or she really needs to in a way that will get all questions answered before they become of issue and that enables the attorney to glean as much information as possible about the big picture goals and the daily ruminations of the business person. There is the need to think like a team even if people are not sitting in the same office. Communication is the key and good communication takes undivided attention—and time.
Next, business people, especially entrepreneurs and “idea” people, frequently use the “ready-fire-aim” method of business planning. That is, they are off and running long before they know what they’re running with, the implications of what they’re running, and whether there is potentially a better way to run their business. It’s a rush to get out there and go. But there’s a simple methodology that I have used for all of my business career, which includes running several multimillion dollar and multi-location businesses. It’s a three-step method that is simple to state, and almost never used. Think. Plan. Do. In that order. It’s amazing how much traction a business can get just by figuring out what to do and how to do it before it actually does so. It sounds ridiculous. But if you look at the way the vast majority of businesses operate, you’ll see that actually this method is only used some of the time. And, when it comes to young or entrepreneurial ventures, hardly ever. When a business works from this model, there is plenty of opportunity to engage your lawyer in the thinking and planning stages. That helps the lawyer become much more valuable and knowledgeable when it comes time to get things done. Talking to your lawyer or even using your lawyer in the early stages of deal-making yields great advantages. Not the least of which is the perspective that a lawyer can bring before you dive right in to something.
Third, don’t be afraid to use your lawyer as a counselor. Many attorneys use the title “Attorney and Counselor at Law.” They are only as good as the information they get—and what they can pull out of you. So, make sure that you don’t keep your attorney in the dark about your plans, needs, deals in the works. Tell them the hopes and dreams you have for your business. They often share those hopes and dreams with you. Think about it pragmatically. A happy, healthy business is the best thing for a bread and butter transaction attorney. The more good things going on in the business, the better. The more pieces of the puzzle you display for the lawyer, the better he or she will be at providing insights about how best to fit it together. Just as you would expect your accountant to find ways to save you money on taxes and plan for future events, you could expect your lawyer to help you limit liability and plan for future legal obligations. There needs to be a proactive approach to a successful relationship between business person and business lawyer, and that proactivity needs to go both ways. It includes, again, clear and continual communication. If the lawyer knows what you want to achieve, then he or she can help find the best mechanisms and approaches available from the legal world to get you there.
Finally, you have your choice of lawyer, just as you have your choice of accountant or receptionist or television channel. Choose one you like and that suits your needs and interests. If you want to have a lawyer that can understand your perspective, your decisions, your dilemmas, choose one that has been in your shoes, running a business. There are a few of us out there with as much experience on your side of the desk as on ours. Or, choose one who has a deep understanding of your particular industry. Or your geographic location. Or your customers. Or your personal quirks and preferences. While it’s sometimes difficult to tell when you and your attorney are going to make it for the long haul, it’s much like dating. You know when you’re getting what you want out of the relationship—and when you’re not. Ask for references and call them. Find out what it’s like to be working with the lawyer over a long time. Find out how many clients the attorney has and how long he or she has worked with each one. Does the attorney provide in-depth, personalized services? Is the lawyer a creative problem solver? Has the lawyer been involved with various stages of the company’s growth and development? Through good times and bad? In sickness and in health? You get the idea. A lawyer who has a solid list of satisfied clients that have been with him or her for a significant period of time is a better bet.
This article just points out a few of the most basic elements in getting the most out of a business legal relationship. Every individual business person and every lawyer has his or her own special set of circumstances, peculiar likes and dislikes and operating styles. My goal was simply to indicate that there are ways to make the lawyer-businessperson relationship as valuable, rewarding, lifesaving and meaningful as any other consultative, strategic relationship in your business. When thinking about a business you spend a good part of your life in, it seems worthwhile to make sure that those you choose to help you make it successful are able to do just that. Searching for a legal match made in heaven doesn’t have to be hell. But it does require effort, and, like all good relationships, the more shared understanding and clear communication you have, the better it will be.
