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.
“I think businesses have used law firms less, and that is partly because of a desire on the part of the clients to conserve money and resources,” says David DeNinno, partner, Reed Smith. “But I think the business usage or client usage of law firms is on the increase as the economy improves, which is a bit of a natural cycle. It’s not because clients are more appreciative or the value that lawyers can add; it’s just that there’s more of a need.”
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. The type of work might change, too, returning more to what was more prevalent three or four years ago than what has seeped in the last couple of years.
“We’re very much a business law firm, but the big growth areas for us have been family law primarily custody and divorce criminal law and corporate bankruptcy,” says Eric Davis, managing partner, Elliott & Davis PC. “All of those are products of a down economy. More people get in trouble, because financial difficulty causes family stress and divorce. We’ve had to be adaptive for our clients.”
But until outliers like that start to fade away, 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.
“I think the best thing lawyers can do now for clients is help them assess the current risks facing the business and any potential liability issues and cash needs of the business,” DeNinno says. “That includes opportunities to improve the efficiency of their operations, either through better legal management or risk assessment.”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 Pittsburgh and Western Pennsylvania are expected to be no different M&A activity will likely be prevalent by the time the calendar turns.
“We look at it like we’re in this awesome market of Pittsburgh, where I still see this economic renaissance going on, and I still see dramatic growth in 2011,” Davis says. Granted, after the dearth of mergers and acquisitions during the last couple of years, it might not be all that difficult to mark an improvement, but an improvement is still a step in the right direction.”
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.
“Business clients should look for a one-stop shop if they can get it,” Davis says. “We actually want our clients to call us, and we want our clients to e-mail us with questions. If it can be answered it 15 minutes or less, we’ll answer it for free, because we want them to look at us as their strategic partner.”
If you don’t have a relationship like that, though, or if you’re just 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.
“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.
Rates are historically low, and this is perhaps the best buyer’s market of any of our lifetimes.
“There would be a whole litany of reasons a business might want to change its attorney now, and the first might be because of performance they’re not quick enough to get with you and they’re notoriously old-school with billable hours and so on,” Davis says. “Clients can be sensitive about things like that. In a simple sense, it might be a good time to re-evaluate whether their attorney is someone who is suited to the company’s capabilities and needs and is someone who can deliver results.”
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?
“Recessions create opportunities in many ways, particularly in the knowledge-based model that we have,” Davis says. “Many business models are only secure if they’re intellectual property, and so this is sort of also the time you don’t want to stop making those investments and protecting your ideas and brands with trademarks.
“When things are a little slower from a business perspective, it’s a good time to look back and re-evaluate. It takes a little bit of effort to get all that secure.”
But it’s almost always worth it, because in a world and an industry filled with so much change during the last couple of years, something needs to hold steady.