Learn To Love Your Lawyer

Should you go with a big firm or a small one? Obviously there's no right answer. The largest firms tend to handle the most intricate deals and the most hair-raising lawsuits, but there are any number of sophisticated smaller firms -- often spun off from the big firms -- that do work of the same quality. Sure, they might lack an army of attorneys to throw at a project, but it's unlikely that you'll ever need that. (And pray that you don't.) If you do select a big, name-brand firm, make sure that the lawyer you choose is accustomed to dealing with small companies -- and that he's not juggling your work with, say, a big project for ExxonMobil. If he is, guess whose emergency will get first priority? And remember: There is often a cultural disconnect when big law firms meet small businesses. "Some of the larger firms have a difficult time being entrepreneurial," says Timothy Hodge, chief in-house lawyer at 180s, a Baltimore manufacturer of ear warmers and sunglasses. At many big firms, the first impulse is to throw a team of lawyers at a new project. "They're treating you like they're treating IBM," Hodge says. Not good -- unless, of course, you have as much cash in the bank as Big Blue.

While brand-name firms carry some cachet, it's seldom worth the added cost. Seth Seidell, chief operating officer of Human Capital, a human resources outsourcing agency in Southfield, Mich., has two favorite outside firms -- one with 25 lawyers and the other a sole proprietorship. Sure, he'll go to a large firm if it has a partner with exactly what he needs. But Seidell's seen the regard for large firms taken to absurd extremes. Occasionally, a client will show up for routine contract negotiations with big-firm lawyers at the ready -- and then run up fees that exceed the value of the contract itself. "That," Seidell observes, "is just stupid." Indeed it is. Not all legal matters require the best and the brightest. You don't need a jigsaw to cut a sheet of paper.

Don't Forget Who's in Charge

Letting your lawyer set the terms unilaterally is almost certain to end with hard feelings.

Let's say you've found an experienced lawyer with loads of small-client sensitivity. Now it's time to lay down the rules. It's not as simple as it sounds. Most attorneys will simply hand you a boilerplate retention agreement to sign. Don't. Letting your lawyer set the terms of the relationship unilaterally is almost certain to end badly, with hard feelings and lots of zeroes on the check you write at the end of the case.

Once again, you have to ask questions. First, attack all ambiguity about costs. Remove the legalese, and here's what the typical boilerplate lawyer-retention agreement says: "We, the law firm, will assign whichever attorneys are needed; we will do the work that's required (whatever that turns out to be); our rates range from $200 to $500 per hour; we can't predict the ultimate cost, but we'll consult with you along the way (whatever that means); and we'll charge you for our out-of-pocket costs at our firm's standard rates." It's standard legal fare, agreed to by clients every day of the week. But in fact, each one of these provisions is a ticking bomb. Even if your lawyer isn't out to scam you -- and, to be fair, most aren't -- such vague, one-sided provisions can only work against you.

Instead, take control of your retention agreement. (See "Think Your Lawyer Is Ripping You Off?" page 96.) Establishing control over the lawyers you hire means encountering fewer nasty surprises and resolving common problems before they start.

Maintaining such control is especially difficult -- and nasty surprises are most likely to occur -- when you're in litigation. If you're the one being sued, you're not in control of the situation to begin with. Your opponent is. The standard lawyer response, when asked what the ultimate downside might be, is to shrug and claim that there's no way to know. Your reply: Let's try anyway. "It's all about money," says William Flannery, an Austin-based consultant who helps lawyers land clients and manage customer service issues. Demand a budget, Flannery advises, with probabilities attached to each step of each scenario. How many briefs and motions will the case demand, and how long will it take to prepare and argue each one? How many witness depositions will be needed? What are the odds and costs of winning or losing or settling at each potential mile marker? Tally up those guesses (and yes, they are only guesses -- but they should be educated ones) and you'll at least have a sense of what you're facing financially.

Yet business lawyers seldom encounter such a calm and competent client. Michael Boone, co-founder of Haynes and Boone, a large full-service firm in Dallas, says too many of the would-be clients he encounters are much more likely to lose their cool. Unaccustomed to dealing with lawyers and caught up in the throes of litigation, often for the first time, all they can think of is crushing the opponent. "They get caught up in emotion," he says. "They don't know what things cost." Boone makes sure they learn fast, by asking for a retainer of as much as $100,000 and promising monthly bills of some $15,000. "Sometimes you need to shock them," he says. After all, if the costs are too much to bear, better to learn that before someone gets hurt. It's a bitter pill to swallow. But it's better to have a candid lawyer like Boone than a passive-aggressive one who will, without warning, drop a 10-ton weight on your bottom line.

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