United States: Defining The Value Of The Business Lawyer

One might define a principle as a basic truth, a changeless expression of the laws of nature, or even a basic or essential quality or element determining intrinsic nature or characteristic behavior. However defined, motivational author Orison Sweet Marden, at the turn of the twentieth century, identified just such an element or truth or principle for the business world: success always requires the cooperation of others. A century later, Marden’s principle of business remains self-evident.

In fact, every business, knowingly or unknowingly, offers daily, even hourly, homage to Marden’s principle of cooperative relationships by seeking out customers or clients through networking, advertising, or other marketing activities; by contracting with suppliers of product components or services necessary for the business’ own provision of its products or services; or in the ongoing selection, training, and retention of the business’ employees or consultants.

Yet, despite the universal recognition that successful businesses are built upon the principle of cooperative relationships, many business lack such a relationship, and corresponding cooperation, with members of the legal profession. In some instances, this lack of cooperative relationship stems from a misevaluation of costs and rewards. Generally, however, the lack of an ongoing relationship with legal counsel tends to result from a misunderstanding of the business lawyer’s role.

A business lawyer’s role might be characterized as that of a problem-solver. Such a definition should not, however, lead one to believe that consultation with a business lawyer is appropriate only after a problem arises. Rather, the business seeking to succeed through the principle of cooperative relationships will seek out a qualified business lawyer from the very beginning.

For example, such a business should usually retain a business lawyer to render advice on the form of legal entity that the business should take or maintain, such as that of a sole proprietorship, general partnership, limited partnership, limited liability company, or corporation, among others; to render assistance in the formation of employment and other business policies and procedures; and to render guidance on licenses, regulations, or laws (local, state, federal, and international) with which the particular business must comply. Such a business should also seek the advise of a business lawyer in the drafting or negotiation of its contracts, including, among other items, property leases, employment and severance agreements, or business agreements entered into under the applicable commercial code. Moreover, such a business should certainly utilize a business lawyer to remain abreast of the most recent changes in local, state, federal, and international law, such that it may, when appropriate, alter the conduct of its business or revise its polices and procedures.

In addition to limiting liability for itself and its owners; protecting the legal rights of itself and its owners; and perhaps even realizing savings in taxes or penalties for non-compliance with some local, state, federal, or international law, a business should, during these ongoing processes, seek to develop a continuing cooperative relationship with a business lawyer. Such a continuing rapport will allow the business lawyer to become a member of the business team; and should enable that lawyer to react quickly and effectively when problems do arise in a manner that is comfortable to the business and its employees.

Essentially, the creation of a cooperative relationship with a business lawyer enables a business to, quite simply, free itself to concentrate on its market. It allows, in other words, the business to do its business, rather than become bogged down in a maze of legal statutes, contracts, and pitfalls that are best left to a legal professional.

Of course, the negatives of going it alone, without a cooperative relationship with a business lawyer, are equally obvious. Among other things, such a business might fail to realize tax savings otherwise available to it or its owners; might fail to protect its legal rights in trademarks or inventions; or might run afoul of local, state, federal, or international law resulting in severe civil, or even criminal, penalties and expensive litigation. Worse yet, a business that goes it alone runs the risk of having to seek, on extremely short notice, the assistance of an unknown and unfamiliar attorney who happens to have the time to handle a business’ sudden and unexpected legal problems. Such a situation entails substantial costs to the business because that attorney, who might not have been the choice of the business had it ample time to interview and carefully select from a pool of attorneys, must first get up to speed with the business and its interest, and then, and only then, work to solve the legal problem after the fact. Even then, the hastily formed relationship will lack a depth of trust that can only be created over time through an ongoing cooperative relationship.

Recognizing a principle, be it one of business or some other nature, could be characterized as the easy part. The difficulty comes in honoring that principle. In other words, how does a business choose a lawyer, and what might a business look for in a cooperative relationship with a business lawyer?

Despite all of the technology, and all of the advertising, word-of-mouth remains the best way to begin the process of choosing a business lawyer. Word-of-mouth recommendations can come from other attorneys that might be known to those involved in the business, or might come from business colleagues. Who do the business’ suppliers, customers, or even competitors rely upon for their legal needs? Who do other lawyers look to when they have questions related to the legal needs of a business? Who do the business’ accountants, financial advisors, or other supporting consultants recommend? Such a survey will undoubtedly reveal more than one attorney that might be capable of serving a particular business’ needs.

Having established a pool of possibilities, a business should then begin matching the personality of its potential business lawyers to the very specific needs and expectations of the business. Does this lawyer have experience in the representation of business clients? Does this lawyer have experience in representing clients similar to the business, in terms of size and in terms of industry? Does this lawyer have a business background? To analyze such information, a business might look to a law firm’s Internet Website or a listing in one of many legal directories such as Martindale-Hubble or the West Legal Directory; might review papers authored by the lawyer or review published opinions involving the lawyer; or might solicit such information from the lawyer’s current clients or others. Even then, however, the analysis is only half-complete.

To ensure a good fit, and a rewarding cooperative relationship, a business will need to know how its business lawyer, and the firm employing that lawyer, operates. In other words, how does the lawyer communicate with clients? Is the communication constant, correct, and in a manner the business can use and understand? Can the lawyer work effectively with employees and other supporting consultants (i.e., accountants, etc.) of the business? Is the lawyer willing and capable of saying no, if such advice is in the client’s best interest? Will the lawyer go the extra mile, and add value to the business? In other words, will the business become more effective because of the lawyer’s advice and representation? Answers to these questions can become readily apparent in a meeting with the lawyer, or very early in a continuing and cooperative relationship.

Importantly, attempting to establish a cooperative relationship early, before problems do arise, permits both the business and the business lawyer some leeway in moving on should the relationship not be a fit for both parties.

The fact is that all businesses, to be successful, must rely upon cooperative relationships with others. In today’s market, a relationship capable of guiding a business through the complexities of the legal world is of the utmost importance. In fact, formation of longstanding cooperative relationship with a business lawyer is nothing short of sound business, and is undoubtedly one of the many principles that must be followed to ensure business success.