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.
“The Ohio economy has been adversely affected, perhaps more than other states,” says Russell M. Gertmenian, managing partner, Vorys, Sater, Seymour and Pease LLP. “But the thing I think we can best do is help clients in terms of making sure all their T’s are crossed and there I’s are dotted for corporate structure, their strategies, their tax plans, and the regulatory requirements that are coming out of Washington and Columbus in response to the downturn in terms of helping them get ready to take advantage of the uptick when it comes.
“And at that point, the focus will be on doing new business, as opposed to figuring out how the new regulatory schemes affect you and what you need to do to comply with them.”
You might be in the midst of that 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 don’t know that our clients used us less overall, but they used us differently,” says Steven J. Ellcessor, member, Frost Brown Todd LLC. “Instead of working more with the transactional lawyers who helped them do deals or with securities lawyers who helped raise financing, all of a sudden, we were doing more litigation and bankruptcy. It’s starting to switch back, but it’s not there yet.”
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.
“We’re certainly hoping 2011 will provide an uptick in business and legal spend,” Gertmenian says. “Our legal spend is dependent upon the amount of legal activity our clients are engaged in. I think we’re cautiously optimistic that we’ll see our clients engage in more activities, and legal spend will be the byproduct.”
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 Columbus and the rest of Ohio aren’t expected to be all that different M&A activity will likely be prevalent by the time the calendar turns.
“Clients are starting to think again about those transactions and opportunities, particularly in mainstream manufacturing and particularly if there are players in their industry who are coming out of the recession in a weakened state,” Ellcessor says. “There may be some acquisition opportunities, but I don’t think people are ready to jump yet, because they’re just not confident enough yet that the economy is really stabilized and going to continue to grow.”
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.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,” says Susan Zaunbrecher, partner, chair of the corporate department and chair of the financial institutions practice group, Dinsmore & Shohl LLP. “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 you don’t trust that your attorney is with you and working with you for the future, then you should absolutely be looking for new counsel,” Zaunbrecher says.
You might want to consider a change if you have just outgrown your firm and need a firm with a larger regional, national or international footprint.
“This is an opportune time for business people to really be thinking about their strategy and looking at the economic landscape because it’s going to be different a year and two years from now,” Ellcessor says. “There are going to be opportunities, even in industries that are slow growth. Looking at the landscape and what’s going on, this is a good time to do that.”
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?
“I think this new environment is going to create some permanency in terms of how clients view their relationships with professionals and the kind of flexibility and partnering that they want,” Gertmenian says. “That’s probably here to stay and that will present opportunities for law firms that are able to listen to and understand what clients are saying and adapt the way they do business to be consistent with that.
“We are learning how to best be responsive to clients in this new environment, and I think they can be very successful in the new environment if they’re listening to their clients, even if the legal spend doesn’t explode, because I think we’re going to have opportunities to increase market share and learn how to do work profitably without consistently raising hourly rates.”
Because in a world and an industry filled with so much change during the last couple of years, something needs to stay the same.