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.
“Legal advice can help you both where you are already doing things and where you’re not,” says Laura E. Ellsworth, partner-in-charge, Pittsburgh office, Jones Day. “If you’re entering into some kind of legal relationship with someone, talking to a lawyer in advance can help with terms and conditions.”
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.
“In any situation the lawyer is going to want to have the facts,” says Daniel I. Booker, partner, Reed Smith LLP. “Who is involved? Who did what to whom? What are the key documents?”
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.
“You want to bring in your lawyer when the two of you can decide where you want to drive this train,” Ellsworth says. “If you bring in your lawyer when you’re putting the train on the tracks, you figure how to position it and where the switches are. That’s a lot better than calling your lawyers after it has run off the tracks and you’re trying to force this multi-ton thing back on the tracks.”
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.
“Come into the meeting with clear business objectives and be prepared to explain them to the lawyers,” Ellsworth 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.
“Most lawyers will, in order to get a client to come to know them, agree to a flat fee,” Booker says.
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.
“There are situations where no one, in advance, can predict how much time and effort is going to be required,” Ellsworth says. “You don’t want to work yourself into a billable corner, when a law firm is going to have a problem throwing the very best people at your matter to give you the best service.”
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.
“Part of the chemistry with the lawyer has got to be that the business leader and the lawyer are both willing to be upfront and open to talk about fees,” Booker 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.
“The most important thing a company can do to managing its legal risk is for the business leader to find a legal adviser who he trusts, who he can bounce things off of, and won’t get charged an arm and a leg,” Booker 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.
“You need to think about what is the best outcome for your company, and then devise the relationship with that lawyer that is going to achieve that objective,” Ellsworth 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.
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.
“Find an existing client of that lawyer or firm who either has your issues or works for a company like yours,” Ellsworth says. “Then pick up the phone and ask them what they think. That kind of conversation is worth a thousand words of law firm brochures.”
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.
“The way a lawyer really wins points with a client is just to tell a client one time that we’re not the best people in this matter,” Booker says. “If you find a lawyer willing to tell you that, you should develop that relationship. Go back to him the next time you need general advice.”