Demand Loyalty
The challenge is to align your attorney's interests with your own, making sure he understands exactly what you expect.
You need to know that your lawyer is on your side and will fight hard for your interests. A no-brainer, right? Not quite. The lawyer-client relationship is complex -- made all the more tricky by the often competing economic interests of the parties. Old-fashioned loyalty is often a rather quaint notion. (See "Which Side Is Your Lawyer On?" page 93.)
Essentially, there are two kinds of lawyers -- the guard dog and the fixer. A guard dog will protect you from potential risks and treat the other side in a dispute or negotiation with an arm's length skepticism bordering on hostility. A fixer, on the other hand, turns dreams into reality, knocking down barriers to get you to your goal. Too much of either trait is a problem. An out-of-control fixer is a yes man, unable to stop you from making mistakes. But an excess of guard-dog genes means your lawyer will nitpick deals to death and treat theoretical risks like insurmountable barriers.
Terry Collins, CEO of Argon ST, a defense contractor in Fairfax, Va., has seen too much guard dog in some of his attorneys. "I don't think you succeed in business without having trust in other people," Collins says. The guard dog, however, is not a particularly trusting breed. Collins has been sitting around a conference table, inches away from inking a deal with a potential partner, only to see his lawyers behave, he says, as though "the other guy must be a criminal." Whose side are these guys on, wonders Collins, who then must spend his own time smoothing over ruffled feathers so that the deal can get done.
One reason for the disconnect: Many lawyers simply don't think like businesspeople. When confronted with a risk, an entrepreneur weighs the costs and benefits, decides which route makes sense, and takes action. "It's risk management," says Susan Hackett, of the Association of Corporate Counsel. "It's what companies do all day long." Law firms, on the other hand, "are in the 'elimination-of-risk' business," she says. Hence their knack for transforming speculative outcomes into deal-killing barriers.
The challenge is to align your attorney's interests with your own -- to make sure your lawyer understands your priorities and what, exactly, you expect. But be warned: Economics is working against you here. The image of the noble warrior-lawyer, loyal to the death, is an anachronism in an era of shopaholic clients, pressing for the best fee deal by constantly moving their business from firm to firm. Lawyers, of course, are no better, hopping from one firm to the next in search of an ever-bigger payday. What's more, the compensation schemes in place at many law firms encourage lawyers to hoard clients rather than match the client with the most appropriate partner. In such a world, there is little room for trust, says Michael Shakman, a Chicago attorney who represents law firms accused of malpractice.
It's tough to change the laws of economics and human nature. But you can keep your lawyers on your side by making yourself indispensable. By concentrating all of your legal work in one firm rather than spreading the different types of work you generate among several firms, you might go from a blip on those several firms' financials to a sizable client at one. And it's not just about financial clout. If your company is prominent in a certain industry or a leader on a particular issue, it might be attractive to the right law firm. If you're in the business of helping companies outsource computing services, for example, then find a law firm that's trying to make its name in outsourcing contracts. Become that firm's marquee client. The bragging rights for that firm should at least be enough to make sure your calls get returned.
Forge a True Partnership
"If I have a short conversation with clients, I'm not going to bill them. Not every lawyer can do that."
Jack Danahy loves his lawyer. As with most romances, Danahy owes some of his good fortune to a happenstance meeting. But his experience is instructive for the cues it offers business owners who want to recognize a lawyer worth keeping when they see one.
Danahy, founder of Ounce Labs, a software security firm in Waltham, Mass., met his lawyer last year, when he was negotiating a financing deal with the venture capital firm Greylock Partners. Greylock planned to be represented in the deal by Hale and Dorr, a major Boston-based law firm. But Danahy knew the firm's reputation, and wanted Hale and Dorr for himself. Fortunately, Greylock agreed to hire a different firm for itself in the deal.
Danahy had reason to want the best. At his previous start-up, Qiave Technologies, he had learned that cheaping out on legal help when money is tight can cost dearly later on. While negotiating Qiave's sale in 2000, Danahy discovered that his rather ordinary lawyers had made a rather extraordinary mess of his company's corporate documentation -- a mess that needed to be cleaned up before the deal could proceed. "It is enormously important to get it right the first time," Danahy says. "It really makes growing a heck of a lot easier."
