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.
“We can, as the company’s trusted adviser, help the leaders think about what their growth will look like, how they should be thinking about their future legal needs and help them avoid costly litigation later,” says Gary Singer, co-chairman, transactions department, O’Melveny & Myers 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.
“Businesses should talk to their lawyer about business issues as soon as they possibly can when the issues are conceived and when an idea is in the thought process,” says Scott Alderton, founder and partner, Stubbs Alderton & Markiles LLP.
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.
“It’s very important they get early legal advice, well before documentation or even negotiation of the transaction, so you can think through how the legal issue will affect the transaction and be proactive,” Alderton says.
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.
“Probably the most important is for them, before contacting legal counsel, to really think about the questions that they have for counsel and to discuss the questions and issues among executives or businesspeople at the company and make sure everyone agrees that these are the right legal questions for the law firm,” Singer 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.
“We are open to alternative fee arrangements that, in effect, reward our efficiency and, as importantly, make the legal spending more predictable for clients,” Singer says. “The goal is to make sure our clients’ interests and those of our firm are aligned.”
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.
“We think in this area it’s important for companies and their counsel to look beyond just a straight discount, off-the-rack rate,” Singer says. “They should be looking for where they can gain value and where there are the incentives for the law firm [to be] properly aligned to do the important and complicated work in a first-class way, and that there are no incentives to cut corners.”
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.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.
“Our ability to get in early and understand the business’s product and operations can ultimately help on the preventive side, especially for newer businesses,” Singer 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. Many lawyers are involved in a number of community service projects and you can gather additional information about the attorney’s personality by considering how they conduct themselves in those situations.
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.
“Chemistry and personality are a big fit,” Alderton says. “Any lawyer who is not willing to spend a significant amount of time upfront to make sure it’s a good fit, to explain their practice and explain their background, is somebody you shouldn’t hire.”