What’s one hallmark of every entrepreneur you know? Expertise.
After all, you’d never expect someone to strike out into a new venture without having at least some idea of what they were doing in area of business. While it’s inarguable that expertise is a required component for success as an entrepreneur, this article will examine the difference between two types of expertise, specialized and general, and will show you perhaps a new perspective on which is the most important to have in your corner, especially when it comes to your legal affairs. (Spoiler alert: we might’ve given away the secret in the title of this blog.)
There’s no denying that specialized expertise in a particular field or industry can be an advantage in terms of technical knowledge, credibility, and reputation. And we get it. As a small business owner, there are a lot of different areas of law to account for: contracts, leases or real estate, employment, trademark, mergers and acquisitions, and corporate governance. It would only make sense that each area would require a specialist lawyer, right?
Well, not so fast.
As we’ll now demonstrate, a generalist approach can also provide numerous benefits, including creativity, adaptability, and problem-solving skills that just aren’t available with a specialist approach.
Here’s a more real-world way of thinking about it: a celebrity chef doesn’t become a celebrity chef by only being able to make a single dish. No one is going to tune in to watch Gordon Ramsay make JUST scrambled eggs on every show or appearance. And even if that one dish was amazing, it would only be amazing by bringing in a wide range of culinary influences, fresh cooking techniques, and innovative ingredients. That’s the distinct advantage of a generalist approach. And it’s even more true when it comes to the area of law.
In a previous article, we called out the book “Range: Why Generalists Triumph in a Specialized World” by David Epstein. He argues that in complex and unpredictable fields, generalists are more likely to excel than specialists because they tend to have multiple interests and are more agile and creative than their specialized peers.
“Domain specificity can be disastrous. It’s a view that what you do in one domain is unrelated to what you do in another. The problem is that our lives are not lived in one domain.” – David Epstein
Epstein goes on to suggest that actively cultivating inefficiency, embracing diverse experiences and perspectives, and failing often are the best ways to learn and succeed. This might seem like a controversial stance, but it really boils down to your appetite for risk.
Going blindly to a specialist “not knowing what you don’t know” can be disastrous
Of course, the challenge with business risk is that often, “you don’t know what you don’t know.” Seeking legal counsel is expensive and complicated, and most businesses only turn to lawyers when they believe it’s absolutely necessary. Typically, they seek a specialist in a specific area of law and only have them look at the narrow issue they need help with. However, this approach may not be the best for small businesses without an in-house General Counsel. We’ve found this to be true firsthand.
Recently, a client was seeking to buy out one of their partners. The deal was finalized and the company was determining the best way to finance the buyout. I was asked my perspective on whether the company should use its cash reserves or obtain a bank loan. This wasn’t a legal question – but it was a question for the General Counsel who understood where else the business had risk and commitments and understood the risk tolerance of the company to provide a different perspective than the bank, the owners, and the leadership team.
As that buy-out example makes clear, a generalist lawyer can be a valuable asset for small- or mid-sized businesses in several ways. A generalist lawyer is more likely to identify issues than a specialist because they bring a broader set of experiences to the table. They have a broader viewpoint and can provide counsel that is holistic, taking into account the broad needs of the business. A generalist lawyer can also help entrepreneurs ensure they are making the right legal decisions for their business, mitigating risk, and avoiding costly legal battles down the road.
Five small business advantages of a generalist approach
1 – Problem-Solving Skills: Entrepreneurs with a broad range of life and business experiences are more likely to have encountered a wide range of challenges and obstacles, and therefore, have developed strong problem-solving skills. They may be able to draw on past experiences and knowledge to identify creative solutions to complex problems.
2 – Adaptability: Entrepreneurs who have experienced diverse situations and challenges are more likely to be adaptable and flexible in their approach to problem-solving. They can more easily adjust their strategies as needed to respond to changing market conditions, industry trends, or customer needs.
3 – Leadership Skills: A broad range of life experiences and skills can help entrepreneurs develop strong leadership skills. They can draw from a variety of experiences to motivate and inspire their team to achieve common goals.
4 – Innovation: Generalists are often better at identifying patterns and making connections between seemingly unrelated ideas, leading to innovation and creativity.
5- Cost-Effective: A generalist approach can be more cost-effective for small businesses, as it allows entrepreneurs to wear multiple hats, reducing the need for multiple specialists.
At Equinox, we take a “strategic general counsel” approach to leverage our generalist expertise to help small businesses. We focus on understanding your business, industry, and goals to provide strategic advice that goes beyond a narrow, specialized view. By providing legal services tailored to your unique needs, we save you time and money by avoiding costly mistakes and missed opportunities.
And that’s really the key for entrepreneurial success: finding the balance between general and specialized expertise. While specialized knowledge is important, a generalist approach can provide numerous benefits, including creativity, adaptability, problem-solving skills, strong leadership skills, effective communication, and resilience. When it comes to legal counsel, a generalist lawyer able to support specialist scenarios can be a game-changer for small- or mid-sized businesses.
That’s why our Strategic General Counsel offering can help you navigate every legal landscape, allowing you to focus on what you do best — building your business!