There are so many stereotypes about attorneys. Some of them are true, of course, but most of them are not.
Some attorneys are, for instance, sharp dressers, every bit the models for the top designers that you might expect, with perfect hair and a packed brain to match, but not all attorneys look like they belong on the cast of some courtroom drama that moves through its story arc each week in 44 minutes flat.
Some attorneys are fast and slick and out to make a quick dollar or a quick couple of thousand dollars but not many.
And, yes, some attorneys are blindingly intelligent and able to rattle off laws, statutes, regulations and court cases long since decided as if it was their job because, well, it is.
Your attorney is not a heart surgeon, a rocket scientist or a neurophysicist. They might as well be, though, to handle the level of work and degree of difficulty required during the last couple of years. After all, you have probably rarely called your attorney for something casual during these strapped economic times. Calls always seem to be reserved for something expensive and stressful that has to be handled correctly.
“Over the past 10 years, a lot of clients looked more to their firms as scriveners,” says Neil Ganulin, member, Frost Brown Todd LLC. “They would go out and cut a deal, then call their lawyer, tell them what they had done and ask for a contract to be written. At that point, it can be a little late in the process for a lawyer to be able to point out other things.
“I think it was a missed opportunity for clients.”
You might be in the midst of another missed opportunity right now. A majority of attorneys say this is an opportune time to think, then think again, about your business strategy and to examine the economic landscape, because there are opportunities available right now, even in slower industries, that will not be available for long. If you can afford to, this is the time to move. And if you have a good attorney on your team of advisers no stereotypes here you already have about as good an ally as possible to help steer you forward.Remember the past
The last couple of years have provided you with a new set of challenges. Perhaps you needed to lay off a percentage of your employees, close a branch of your business or just do more every day with an already overworked, if not smaller, staff. Odds are your attorney was with you during many of those moments because even if you didn’t work more with your attorney in order to save legal fees, you probably called and talked more often.
That is, at least, what many attorneys are saying.
“The recession has caused some companies to completely change the way they do business,” says Nathaniel Lampley Jr., managing partner of the Cincinnati office, Vorys, Sater, Seymour and Pease LLP. “Often, that means they have a heavy reliance on a law firm. The workout lawyers, the bankruptcy lawyers, the reorganization lawyers have been very busy, because some companies are trying to find the correct organic structure because of the pressures that have been laid upon them because of the recession.
“At the same time, there are other companies that have kept the work in-house.”
The amount of work and communication required of some attorneys will also likely increase through 2010 and during the early months of 2011.
“I do think we’re going to see more use of lawyers in some industries, especially the regulated industries financial institutions, health care, insurance companies,” says Susan Zaunbrecher, partner, chair of the corporate department and chair of the financial institutions practice group, Dinsmore & Shohl LLP. “They are so heavily regulated and the government is regulating them even more stringently today, that I think you’ll definitely see those industries using their lawyers more because they have to.
“As we start to pull out of this recession, you’ll also see some other industries starting to go back to their lawyers and relying on them more for the assistance they used to get.”
Until then, the existing bump in bankruptcy, commercial litigation and corporate reorganization sure signs of an economy that has seen better days, months and years will likely continue.
And valuations are still historically low though not as far in the cellar as they were during much of 2009 which means now is still a good time to examine and consider estate and succession planning. What will your business do after you’re out of the top spot? Who will own the business? Who will be in charge? And were you able to take advantage of a down market to pass it along at a better rate?
There are plenty of other things you should consider with your attorney before the economy starts to bump up a little more.Look ahead and plan
Did you manage to obtain any sort of credit during the last two years? If so, congratulations. That is quite an accomplishment. If not, no worries, because not many other companies did either. That said, some good news for the coming year is that credit is expected to be more available in 2011 than it has been in several years.
More credit is just one of the major points of interest for attorneys during the next six to 12 months. Because of those increased lines of credit, much of the next year will likely include a focus on mergers and acquisitions. Some attorneys say that M&A activity increased during the first half of 2010 before slowing some during the last four months, but no matter your city or region and Cincinnati and Southwest Ohio are expected to be no different M&A activity will likely be prevalent by the time the calendar turns.
“There has been an increase in distressed asset transactions in the real estate market and an increase in workouts,” Ganulin says. “So for those clients who are financially sound and have a pretty good cash base or have access to other forms of capital, there have been opportunities for them to acquire some pretty good properties and businesses at a price that wouldn’t have been available four years ago.”
Alternative fee structures and arrangements or at least discussions about them are also expected to increase in 2011. Some firms have provided them for years as an option, others have added them only during the last couple of years as clients asked for them, but there does seem to be a split between clients who are more open to alternative fee structures and those who hold tight to the hourly rate.
Even if you have no interest in alternative fee structures and will renew your proverbial subscription to the hourly rate, at least starting a conversation with your attorney or legal team about some other option might not be a bad idea, especially with the economy and cash flow still in flux.
“There is a command for us to be more efficient, there is a request that we attempt to be more flexible in our fee schedules, and there is a request for us to be more accessible,” Lampley says. “Clients really want us to add value, and that means doing the same job in a more efficient way.”Ensure your value
How can you be certain that you will receive as much value as possible from your partnership with your attorney? Communication, of course the seemingly simple center of every conversation and great relationship remains the top priority. If you do not talk regularly with your attorney or if you rarely, if ever, ask questions or send recent documents and forms, you need to communicate more.
Most attorneys say they like to talk with clients at least once per month, just a casual meeting for breakfast, lunch or coffee to sit down and talk about you and your company, especially if they work with you more as an adviser than as an auditor though every relationship is different.
“It depends on the relationship and the comfort that a business owner, executive and boards of directors have with their legal counsel,” Zaunbrecher says. “I have numerous clients where I talk with the CEO and board of directors regularly. I have others that I hear from maybe once a year, just to check whether there are things we should be doing and things we should know.”
And if you are not pleased with the quality or the nature of the relationship you have with your attorney, for any of a number of reasons, the time to consider a move might be now. Rates are historically low, and this is perhaps the best buyer’s market of any of our lifetimes.
“If your firm doesn’t know you well, if they’re not responding to your needs, if they’re not able to provide you with sound advice and counsel that adds value to your organization of course, now is the time to make a change,” Lampley says.
You might also want to consider a change if you have just outgrown your firm and need a firm with a larger regional, national or international footprint.
“But if a company has been with a law firm that knows them, knows their business, has been providing services, and is flexible and accessible, I’m not sure that now would be the time to make that change,” Lampley says.
You might also consider asking your attorney about any changes in rules and regulations for 2011 and beyond. Asking whether the firm offers any corporate education that you and your employees might be able to put to use would also be a good idea. And asking for a review of your corporate structure, especially for possible inefficiencies, would not be a bad use of time or money. What are your employees earning? What are your executives earning? What else are you paying for? And is it really worth the cost?
“We have to understand your business, and we can only do that by getting to know you,” Lampley says. “Hopefully, we can establish or continue a relationship that allows us to do that. After we get to know the business, we can tailor our specific skills and services around what’s important to you.”
Because in a world and an industry filled with so much change during the last couple of years, something needs to stay the same.