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.
“Seeking legal advice can prevent small legal issues from becoming big, expensive legal problems,” says Byron Myers, chief managing partner, Ice Miller 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 good for a company to form a relationship with legal counsel, much like they do with other professionals,” Myers says. “Most firms are very willing to invest time with a client in getting to know their business, what the goals are and what the business challenges are. Then they will be in a position to give them better counsel and advice.”
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.
“If you wait until there is a problem and then start looking for a lawyer or start engaging your counsel, you’re already behind,” says James A. Reed, partner, Bingham McHale LLP. “Lawyers are at our best as counselors.”
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.
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.
“Where you can end up spending a lot of billable time unnecessarily is when you, as a client, are not really clear about what you need to accomplish,” Reed says.
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.
“Lawyers are very aware that it’s expensive dealing with a lawyer,” Reed says. “We want to be as efficient as possible and as economical as possible.”
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.
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.
“The key is to have a mutual understanding of what the scope of the work is and what will be required,” Myers says.
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.
“I think a lot of firms are willing to invest time on their own to do things with their clients to put (the firm) in better position to serve the client,” Myers says.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.
“There is a necessity for people to understand each other and for businesses to understand what the lawyers do,” Reed says.
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.
“It takes time to form that kind of relationship,” Myers says. “If I was a company looking for someone, I’d talk to business colleagues and see who they developed faith and confidence in.”
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.
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.
“Look at a lawyer as your partner in your business and that will help you make that decision about when you need to involve legal counsel,” Reed says.