The Real Value of Your Business Law Attorney

by | August 22, 2017

Your business is doing well – it’s moving along, growing, expanding to serve new clients and markets. You have a professional services team – a business law attorney, CPA, insurance broker, and banker – and contact them when you feel you need their help with something. Sometimes your instinct tells you that you probably should reach out for help, but you know it’s going to take time to explain what’s going on and cost money to get their input — and really, your instinct and experience has generally served you well, so you hold back and don’t get the advice that you know you probably should have obtained. Sound familiar?

Don’t worry. This scenario is the norm of how businesses engage with their attorneys; yet as a business grows, it becomes more complex and the owners encounter more situations that are new to them – more employees equals more structure for compliance with regulations, new markets require an understanding of local laws and a revamping of standard contracts. As the company grows, there’s a lot more that the owners don’t know. Their instinct and experience cease to be a good alternative to good counsel. But at this point, they’re moving at warp speed and don’t really know how to work with a lawyer; so instinct governs and eventually something gets missed.

The dynamic between the company and lawyer must change in order for the business to leverage the REAL value the business law attorney can bring to the table. Both the business and the lawyer must be willing to invest in a relationship where the lawyer knows the business and how the owners think and works for their best interests, in line with their needs; and the owners trust and rely on the counsel, knowing that the lawyer’s approach is aligned with what the business needs. The REAL value comes from thinking of them as your General Counsel.

What is General Counsel? The General Counsel provides both legal knowledge and business knowledge to bear on a business’ decisions. The legal knowledge ensures compliance with laws and sets forth the legal implications of taking or refraining from certain actions. These compliance matters are common situations where businesses contact lawyers for assistance. For instance, a business may wish to terminate a contract early. The lawyer helps the business to evaluate the consequences of doing so. Similarly, if a business plans to sign a new lease, the lawyer can help interpret the terms and highlight any risks. An expansion to a new state or country involves significant corporate compliance questions that the lawyer can assist the business in navigating. Again, these are issues where lawyers are commonly engaged by businesses.

But the General Counsel does more – he or she pairs the legal experience with deeper business experience – often due to years of experience in serving businesses but sometimes through his or her prior roles in working in business. The business acumen is a key differentiator of those who can adequately serve in this role and those who cannot. The General Counsel must not just be able to pick out the risks or interpret the contract terms generically, he or she must be able to apply those risks to the business and counsel the business owner on the options that make sense for that business. To do so, the General Counsel must understand the business and its risk profile. He or she must ask the questions of the right people to understand the implications to the business of the action or inaction contemplated. A General Counsel helps you to evaluate decisions in light of that risk. His or her knowledge of your business enables them to take away the obvious no-go options to make the real choices clear based on what makes sense for the business.

As a business owner, you probably don’t think of risk in everyday decision making; but virtually every business decision – both operational and strategic – contains some element of risk. Most of the time, we aren’t dealing with things that are “legal” or “illegal”, we are dealing with risk tolerance in taking or refraining from action. And this is where your attorney can really add value. However, most businesses will not think to call their lawyer for these types of decisions; in part due to the perceived complexity and cost associated with engaging the lawyer; but also because we have been trained to think of the business law attorney as a transactional partner – someone who writes up that contract or negotiates with the vendor or helps us sort out a dispute.

But the lawyer’s best work is the “thinking” part — thinking through the pros and cons of taking certain action. And to do so effectively he or she must have an understanding of the business operations and risk profile is essential to providing this advice. Yet, clients usually don’t involve lawyers often or deeply enough to really know the business.

If you don’t have this kind of relationship with your business law attorney, you should develop one. Here are some tips on how to overcome the obstacles most businesses have in building a General Counsel relationship with their law firm:

Trust. Because the engagement between lawyer and business is sporadic, the level of the business’ trust of the attorney is low. Regular engagement builds trust. This could be through regular lunches, regular executive meetings, or ongoing projects; but the frequency of engagement should be high.

Knowledge. The business must believe that the lawyer’s insights are valuable to the business’ development. The lawyer’s experience working in the legal and business fields demonstrates some aspect of knowledge; but again, regular engagement and discussions about the business’ goals and strategies will really show how the lawyer thinks about business and how he or she can provide insight to your decision making and ability to decrease your risk exposure. If your discussions with the lawyer don’t provide you with clear, valuable, actionable counsel (or worse, actually make you feel dumb or more confused), then you may not have the right person on your team.

Transparency. Transparency links back to trust and expectation setting. Both the business and the lawyer must set clear expectations of what they seek from the bigger relationship as well as any given project. This includes topics such as the knowledge and experience of the lawyer in certain areas, the response times, and the fee structure. These are the most common complaints clients have about their lawyers – they make things take too long, make them more complicated, and cost way too much – and they must be addressed so the relationship and trust can improve.

You need this person, or more importantly, this relationship as a part of your team. You need that go-to person that you can engage quickly to get a pragmatic perspective on how to handle a question or issue that has come up within your business. But you must have a legal partner that can work with you to overcome the obstacles in engaging the lawyer to truly leverage the value an attorney brings to your business. By eliminating many of the obstacles that inhibit the attorney-client relationship from developing, you can build a deeper business relationship that provides you the practical, relevant advice to help you make fully informed decisions for your business.