I attended a presentation to a room full of business owners the other day. The presenters were professionals who operate in trusted adviser roles. The topic was improving the value of your business by making yourself less indispensable.
An interesting part of the event was a discussion during the Q&A following the presentation. Someone mentioned the frustration of receiving financial statements from a CPA without commentary. What benefit to the business owner is the information without context, without direction, without advice?
If a business hires a CPA to prepare financial statements, and the CPA delivers financial statements, she’s done her job, right? Maybe. Or maybe not. The consensus in the room was that CPAs who do so aren’t doing their whole job, or at a minimum are letting the opportunity for providing additional value–maybe for additional fees–slip away.
My initial thought was that this illustrates the difference in point of view that often separates professional advisors from our clients. As lawyers, for example, we’re trained to view everything through a prism of risk. If you buy a business without turning over every stone in due diligence, you’re opening yourself up to the risk that your new business will have unanticipated issues. If you take back a promissory note when you sell a business, you might not get paid everything you’re owed.
My natural inclination as a lawyer is to conduct thorough due diligence. And if you’re taking a seller note, you should get a security interest in the business assets, and the stock, and a personal guarantee from the buyer, and his wife, and his neighbor, plus a deed of trust in his home, and his vacation home, and in his investment properties.
Although my clients usually appreciate the risks that I point out to them, what they really want is to get the deal done without worrying that they’re getting screwed. That’s not to say that they don’t want to address the risks prudently, but that they desire a sense of proportionality and they look to me to help them decide what’s important. They don’t want a list of potential issues without analysis. They want to know which ones are a big deal, which ones can be mitigated, and which ones should be deal breakers.
As far as my role goes, I think the consensus in the room was correct: people hire lawyers for advice, not just information. It’s a rare client who wants a purchase agreement drawn up and nothing more. They want analysis, they want judgment, and they want advice. It’s easy to deliver information, and it’s easy to spot issues. It’s much more difficult–and much more valuable–to go beyond the raw information and provide advice.
What do you think? Do people hire lawyers for advice or just information?