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.
“We have obviously incurred some challenges here in Ohio, given our manufacturing base and our economic structure as a whole,” says Anthony J. O’Malley, managing partner of the Cleveland office, Vorys, Sater, Seymour and Pease LLP. “As folks look forward to the next three, four, five quarters, they can take a look at their tax planning, their acquisition or divestiture strategies. There are potential opportunities with some of the new regulatory schemes about which they can consult with their legal advisers.”
There are a lot of opportunities, and you might be in the midst of missing a good one 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.
“I have seen a rise this year, and I anticipate another one next year,” O’Malley says. “It’s hard to say if that’s normal, because if you talked with any law firm, they would say something like, ‘Yeah, of course we’re doing better than last year,’ so I don’t really know. I have a sense that certain firms are doing exceedingly well, regionally and beyond. It’s dependent on a lot of things the footprint in which the firm practices, the industry and the clients the firm serves. There are a lot of variables, and you would really have to go firm by firm.”
The amount of work and communication required of some attorneys will also likely increase through the rest of 2010 and during the early months of 2011.
“I see 2011 being comparable to the last couple of years,” says Carl J. Grassi, president, McDonald Hopkins LLC. “Businesses do continue to face many challenges and, in turn, many opportunities. As a result of that, we continue to see where our clients are coming to us not only for legal advice but valued business advice.
“The heightened regulatory environment today has resulted in greater usage of law firms and some of their services, and that will likely continue.”
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 Cleveland and the rest of Northeast Ohio are expected to be no different M&A activity will likely be prevalent by the time the calendar turns.
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.
“We’ve been actively restructuring fee arrangements with our clients,” O’Malley says. “The traditional norm is the hourly rate, but we’ve been working with our clients to find some alternatives, and in this economic environment, it’s been attractive, and I think it’s been helpful.”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.
“There are two ways to work with your law firm,” Grassi says. “One is to be reactive to a situation, to contact your law firm and ask for assistance to respond to a particular situation. That’s probably the most common usage of law firms when something happens, you react and you need to contact. The other way is to be proactive. ... It’s important that business owners and executives meet with their law firm on a regular basis so they can be more proactive in responding to an issue or an opportunity as opposed to being reactive.”
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 including the fact that they are more reactive than proactive then 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.
You may 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.
“Generally many corporations and businesses are counter year end, so usually it’s in the last quarter of their year end that they’re looking at budgets and planning for the next year,” Grassi says. “That is an excellent time to evaluate your advisers, including your law firm, and decide whether or not that law firm is providing the services that you expect and give consideration to others that may be out there.”
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?
“All the efficiencies in the world won’t do anything if we don’t have very effective communication with our clients,” O’Malley says. “It depends on the nature of the relationship and the seriousness of the matter, but communication will always reign as king of any alternative fee structure. There’s a need for a very collaborative, regular, effective communication.
“That’s a fundamental precept we should be living by anyway.”
Because in a world and an industry filled with so much change during the last couple of years, something needs to stay the same.