I recently read an article that discussed the most effective use of a lawyer for a business. It covered a number of items, but what resonated for me was that a lawyer is a most effective tool in risk mitigation. Typically, entrepreneurs are risk takers – that’s what makes them so successful in disrupting commerce. Typically, lawyers are risk averse. We see the downside of every choice. Marrying these two universes of risk tolerance and viewpoint can lead to the most successful implementation of a great business idea or approach.
Over the past 25 years, I’ve built my practice with a balanced approach of strategic planning, transactions and litigation. My clients who have been most successful in all of these endeavors have learned that the lawyer’s experience and viewpoint elevate a great idea to a great (and profitable) business practice. Including your lawyer early and often will help weed out lesser ideas that initially seem promising. Furthermore, your lawyer can help you implement business models or ideas in a way that will mitigate some of the inherent risks.
This method may make owners or operators nervous about the costs associated with bringing in lawyers in such decision-making exercises. The truth is (and trust me, I’m a lawyer) that the cost of waiting to bring in a lawyer once the risk has not been avoided is exponentially higher than tapping that valuable resource earlier.
Aside from a lawyer’s inherent value of approaching, preventing or solving problems, having a lawyer fill a meaningful part of your team can help you bring on additional resources to which you may not have direct access. Experienced lawyers will have contacts with lenders (traditional and nontraditional); financial experts (CPAs and business valuators); insurance professionals; real estate professionals; and sales and marketing specialists. As a business owner, you may have the ability to leverage your lawyer’s business network for your benefit.
In the litigation context, business owners or operators are sometimes reluctant to share with their lawyer some of the more challenging or potentially embarrassing aspects of their business. This is one of the biggest mistakes I see. The troublesome or embarrassing facts will come out, regardless. There is nothing worse than learning of trouble from the opposing side’s lawyer. However, if you let your lawyer in on your secrets early, then your lawyer can mitigate the potential damage and maybe even use it to your advantage.
The most effective attorney-client relationship is one based on free and open communication. Trust your lawyer! Your relationship will be enhanced and, more importantly, your business will be better equipped to handle successes and challenges.