Dealing with your corporate lawyer
As a business, I am sure that you have a corporate lawyer and if you don’t, you should get one. Now. This is not intended to be a solicitation of business by me or my fellow lawyers at Goodfellow & Schuettlaw. I am saying this because the value that a good corporate lawyer can provide you in your business is priceless when looked at in the long run. The proper legal advice can prevent you from having to declare bankruptcy, being sued, and having personal liability for your business dealings. It could also help you maximize tax savings while minimizing liability, amongst many other things.
Corporate lawyers deal with internal governance and matters outside of your corporation. If you are a sole shareholder and director of your business, internal matters are largely academic. But if you have “partners” (term being used loosely) in your business, your corporate lawyer will help craft protection mechanisms should you and your partners find yourselves at odds. It is important to put these matters to bed early in your relationship with your partners so that you can settle eventualities while you are still getting along.
With respect to matters outside of your corporation, your corporate lawyer will review your third-party agreements, be they leases, financings, joint ventures, acquisitions, employment agreements (the list goes on and on) and provide you with legal advice regarding the terms of those agreements. Ultimately, it will be your business decision as to whether you are going to take on a risk—it is your lawyer’s job to advise you on the risk. In terms of analysis, when reviewing third party contracts what I look for outside of the normal terms are two things: the economics of the transaction and how the transaction may fetter my client’s discretion going forward. For example, if I know a client is trying to expand their restaurant business, I will counsel them against entering into a lease where the landlord imposes a prohibition of competition from the leased space in a certain area.
Hopefully, as you can tell from this article, in my opinion, your relationship with your business lawyer is very important to your business success (there is a saying that every business needs to have an accountant, a banker and a lawyer in its back pocket, for a reason). A business making an emergency call to an unknown lawyer is difficult for both sides: you should already have an established relationship before the emergency arises. You should have a lawyer on board that has a bird’s eye view of your business and can dive in to help at the relevant moment.
The fundamentals of your relationship with your lawyer, at the risk of being trite, is trust and communication. I find some clients are afraid to pick up the phone and ask their lawyer a question either because their ego does not allow it or they do not want to be charged for the service being provided. If your business is valued by a law firm, and your relationship is the way it should be, your lawyer should not charge you for picking up the phone for a quick chat and should return calls in a timely manner. A good corporate lawyer appreciates that business people think about their business all of the time, during family time, while on the golf course or socializing with friends, and should not be surprised by the off hours calls or emails, from time to time, allowing his or her client to sleep better that night.
When selecting a corporate lawyer it is important to find someone who you can talk to easily and someone you understand, who values you as a person and not a money cow, who can speak to you in plain English, in your own language, explain the same concept in different words, does not judge you, and who can give a ‘yes’ or ‘no’ opinion to your question and does not make you feel intellectually inferior. You should be comfortable enough with your business lawyer so that you can tell them anything, even if it means showing a bruised ego or an error, drunken or otherwise. Strangely enough, in my experience, I find that lawyer personalities are usually similar to client personalities. People who are prone to intransigence usually find intransigent lawyers—I find that these people tend to get along better with each other than, for example, a mild-mannered lawyer and arrogant client, for example. With a lawyer, as with any relationship, you have to find the right “fit”. How do you find someone to fit that bill? In my opinion, word of mouth through real experience works better than anything. My clients have told me stories about their friends who have found highly rated lawyers on the internet (obviously not practicing in my area), only to be disappointed with them after having spent thousands of dollars.
To be successful in your relationship with your lawyer, you have to communicate, and your communication must be honest. You can read between the lines, but as an experienced lawyer I can say the most difficult clients are those who have selective memories and they end up being charged more as it takes longer for the complete picture to be filled in—as lawyers generally charge by the hour. In my own personal practice, if a client lies to me, I let them go.
Your corporate lawyer has to know everything about your business and to some extent your personal affairs. If you have different law firms performing different services for you such as your real estate lawyer purchasing property, your divorce lawyer settling with the ex, etc. you should still have a general corporate lawyer that knows enough details in order to give proper advice. For example, if you are aware that there may be potential litigation brewing, you should make your corporate lawyer aware of this so that your next real estate purchase is not tainted by the potential claim.
Your corporate lawyer will have an extensive network of other lawyers to whom you may have to be referred, or if your corporate lawyer is lacking a contact in a particular area of law, your corporate lawyer will network with other lawyers to find the proper representation…plastic surgery gone bad, DUI, divorce, insurance claim, parent with dementia, etc. In my own practice, I find that it may take quite a while before I find the right lawyer outside of the firm (if necessary) to deal with a specific issue facing my client, and I do this at no charge because of the relationship I have with my clients.
Your corporate lawyer will also have an extensive network of other professionals you need to help you succeed, such as bankers, cross border specialists, accountants, private equity companies, and politicians.
The last thing I want to mention is that I believe that your corporate lawyer should make you feel like you are their only client—I was taught that early in my career and hope that I have pulled it off. Corporate lawyers do not have to leave the office to go to court, so they have more time to return calls and emails as compared to litigators. I hope that my clients would be surprised to see how much other work is on my desk when I take the time during the day to respond to them—those other files do not distract.
Although businesses do have to watch their bottom lines, being too frugal about hiring proper legal representation is not an option.