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 seen a lot of companies that have tried to not use their lawyers as much because they don’t want to incur the fee,” says Susan Zaunbrecher, partner, chair of the corporate department and chair of the financial institutions practice group, Dinsmore & Shohl LLP. “Now, for some businesses, that will be an issue, because at some point, it builds up. At some point, it would have been less of a problem than it is now.”
You might be in the midst of one of those swelling problems at the moment. 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.
“Our relationships have been more related to general corporate counseling, specific to litigation needs, and in the areas of general business and litigation, it has probably experienced a bit of an uptick just because there have been things that needed to be addressed,” says Austin L. Hirsch, partner, Reed Smith. “We are viewed a business adviser, as opposed to someone who is providing a task, and these are the times when that really counts, these are the times when it really shows whether you have a relationship.”
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,” Zaunbrecher says. “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 though Detroit and much of Michigan are expected to lag some behind much of the rest of the country M&A activity will likely be prevalent by the time the calendar turns.
“In the last couple of years, there has been less merger and acquisition activity on both sides, for buyers and sellers, particularly in the upper middle market,” Hirsch says. “But certainly, if the economy does pull itself out and we’re starting to see some of our more successful clients step out because they’ve been more profitable during this time more businesses will start to think strategically about opportunities in the marketplace.
“If that trend continues, there will be more M&A activity in the course of the next year.”
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 are specific advantages we can discuss in terms of alternatives if the business is sputtering,” Hirsch says. “We can try to give advice to the client about certain renegotiations or techniques they should consider. We can certainly tailor those discussions, depending on the client’s need. It might help them get through whatever challenges are out there.”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.
“I like to use the term ‘staying sticky’ with your clients,” Hirsch says. “I think it is something in which you try to continue to meet with the clients regularly to go over strategy. Now, you have to tailor your relationship. It’s hard to say that every client relationship is the same, but clearly, there are benefits that we can provide by going out to lunch, by going out to a client’s place of business, by sending articles of interest that will stir and stimulate thinking about different tactics or approaches for their business or their customers.”
And if you are not pleased with the quality or the nature of the relationship you have with your attorney, for any 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.
“There are a lot of lawyers who don’t have as much work as they did two or three years ago,” says Alan S. Brown, member, Frost Brown Todd LLC. “That means it’s a buyer’s market out there.”
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.
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 would urge people to emerge from this in good shape and with all of their institutional practices and contracts in order,” Brown says. “Make sure all risk management pieces are covered, because those things tend to fall by the wayside when commerce picks up, because you do get too consumed by sales and growth and revenue.
“This is the right time to be thinking about those issues and to get your house in order.”
Because in a world and an industry filled with so much change during the last couple of years, something needs to stay the same.