Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.
During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.
“When a business owner sees a potential legal problem, reaching out sooner rather than later is much more cost effective for the business owner,” says Stephen W. Riddell, managing partner of Atlanta office, Troutman Sanders LLP.
Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner and his or her fee as an investment in your company you can capitalize on your lawyer’s legal training and experience.Develop an effective relationship
By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.
“It’s more preventative medicine; the lawyers can help you with the day-to-day policies and products in play to help you avoid stupid litigation,” says George C. Gaskin, partner, Business Transactions, Corporate & Taxation Department, Taylor English Duma LLP.
While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.
“Many times, problems that fester and bounce along without a lawyer taking a look get a lot more complicated and a lot more difficult to solve or resolve because a lawyer hasn’t been brought in,” Riddell says.
The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.
“A lot of companies are involved with layoffs right now,” Gaskin says. “They would want to consult their lawyer to make sure they’re doing it properly and following the procedures … and making sure it’s done in a way that they are not going to face a lawsuit.”
If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him or her come prepared to address the issue. Ensuring that the appropriate people are in the meeting or available on-call can avoid a costly follow-up.
Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.
If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss fee structures.
“We can help and price it on a flat-fee basis,” Riddell says. “It saves them time and money and gives them what they need.”
The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.
“The most efficient lawyer in a big expensive firm is a senior associate/junior partner,” Gaskin says. “Their rate is not quite out of control yet, and they are the most efficient people you’ll get for the money.”
No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.
When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.
“In today’s legal and economic times, we need to help companies solve problems at a very reasonable rate,” Gaskin says. “Companies don’t have money to throw around and they don’t like throwing money at legal problems.”Find the right fit
Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.
“If you’ve got a lawyer that’s fairly aggressive meeting with a client that’s very conservative, that’s not going to be a good fit,” Riddell says. “A fit where you’ve got someone that you’re comfortable with personally and professionally can enhance the relationship.”
Finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful. Also consider the lawyer’s role in the area.
Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.
“The key is trying to find someone who practices in their industry,” Riddell says. “That industry expertise can be very, very valuable. If they have a lawyer that understands their industry, that can be helpful to the company.”
Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.
“If you get some legal advice and good policies and procedures in place, that can save you money,” Riddell says.