Do You Hire a Lawyer for Advice or Just Information?

Law Business

advice from lawyersI attended a presentation to a room full of business owners the other day. The presenters were professionals who operate in trusted advisor 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?

Image credit: Shutterstock. Image may not be copied or downloaded.

21 comments

Are Lawyers Like Gardeners Who Mow with Scissors?

Law Business

mowing lawn scissorsLaw firm business models are under a lot of pressure. And this has been true for quite some time. When I was a young lawyer at a regional corporate firm, I would go to the office early in the morning, leave in the evening, and bill almost every minute in between. And clients would pay for all that time. But it’s increasingly difficult to get clients to oblige.

Companies have long complained about the ever-increasing hourly rates charged for legal work. And during the recession in the late 2000’s, they began to push back on rates in a big way. They also started pulling more of their work in-house. Companies were able to do more of their own legal work because there was simply less to do during the recession. Plus their in-house lawyers were willing to work extra hard in light of market turmoil and job insecurity. Then, when business began to pick up and corporate legal departments once again needed help with overflow, they simply hired new lawyers rather than sending the work to their outside firms.

This is on my mind because I had an interesting series of discussions on Twitter over the weekend. It started with this tweet by Jordan Furlong, a Canadian consultant who blogs about the business of law at Law21:

Jordan’s tweet contained a link to a post at The Globe and Mail. The post is about billing disputes between lawyers and their clients, as well as new technology that is being developed to cut down on disputes by helping lawyers share billing information with their clients in real time. The post also discusses the billable hour business model, which is ubiquitous among law firms, and how it hinders law firm innovation. This is a topic that I’ve written about in the past in a post called The Billable Hour Is Bad for Your Soul.

I sent out a quick tweet of the money quote, and some interesting discussion with @DiligenceEngine, @MEKowalski, and @Matt_Phipps followed. Here’s my tweet (click on the time stamp in the tweet to see the discussion):

The key question is why don’t law firms innovate more, and why are lawyers willing to lose market share to our own clients rather than aggressively adopt technology to provide faster, better services at more attractive rates?

I’ve written some of my thoughts on the topic before, but what do you think?

6 comments

Save Yourself From Yourself With a Simple Email Checklist

Miscellany

The end-of-year deal-closing season has just come to a close. So I’ve been sending a lot of emails that I don’t want to screw up.

We’ve all felt it, that feeling of dread deep in your gut just after you hit “send.” Did I send that sensitive document to the wrong party? Did I attach the right document? Did I delete stuff from the bottom of the email chain that shouldn’t be forwarded? Fearing the worst, you click on the email in your “sent” folder to see whether life will go on as normal. Or whether you’ll need to polish up your resume.

Routine is a quality killer

Sending an email is so easy. It’s so routine. So why do we mess it up so often when there’s so much at stake?

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4 comments

Blog Hop — Why I Write

Miscellany

blog hopOne of my favorite things about blogging is sharing things I find interesting with others. That’s also why I like Twitter so much. So when my friend and fellow blogger Bill Ellis asked me to participate in a blog hop, I jumped at the chance.

Bill’s a branding expert and he writes a blog about what he calls fearless brands, such as Tiffany’s, the Naked Cowboy, the Beatles, and the St. Louis Cardinals. After a successful marketing career at a certain brewery that’s long been known in St. Louis at “the Brewery,” Bill put out his own shingle to help young businesses discover and articulate who they are as well as their key value to the market. Bill’s the first person I called when I decided to launch what has become Blue Maven Law. Here’s a link to Bill’s blog hop post. At the end of this post, I’ll introduce you to some bloggers I admire and whose blogs I read regularly.

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2 comments

Making Friends Through Blogging

Miscellany

Later this week I’ll be serving on a panel hosted by The Net Impact, the web development company that built my Blue Maven Law website. I’ll be the only civilian (i.e., amateur) on the panel, and my role will be to discuss the good and bad of blogging as a professional services provider. (Here’s a link to info about the event.)

The highlight of the program will be Q&A, but my prepared remarks will focus on two points: (1) blogging (and social media) is a great way to get to know interesting people, and (2) posting substantive articles that answer questions that are on people’s mind is an effective way to generate traffic on your website.

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2 comments

What’s the Role of a Commercial Attorney?

Law Business

contract time bombsAs a private attorney who’s responsible for bringing in new business, I often think about why businesses need to hire an attorney to help with their contracts. Here are some thoughts about how I view my role in business transactions.

Not all law practices are alike, but I usually operate in one of two contexts: either I’m dealing with a senior business executive (usually the CEO or the owner) of a company that doesn’t have in-house counsel, or I’m basically doing overflow work from the general counsel’s office of a largish corporation. In those cases, I’m usually dealing with someone in the sales division of the company on each contract, although I’m hired by the general counsel or another senior attorney.

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3 comments

If You Could Have Only Two Clauses in Your Contract, Which Would You Choose?

Contract Drafting

contract survival itemsI admit it; I love survival reality shows. It started with “Survivorman,” then “Naked Castaway,” and “Dude, You’re Screwed.” Whether it’s a man alone in the wild with only a few survival items or a commando-type guy kidnapped by his commando-type friends and dropped off someplace remote, if someone’s trying to survive in the wild, I’m going to be interested.

In one survival show, two strangers are dropped off in an inhospitable locale to survive for 21 days. They have nothing on them (not even clothes), but they’re each allowed to bring one survival item. Popular items are a firestarting tool, a knife, and a bowl. With these three tools, you can cover the basics: build a shelter, build a fire for warmth and to cook food and boil water, and hold the water while it boils. Take one of these items away, and you’re missing one of the necessities of food, water, and shelter. Each couple has to make a choice of which necessity to leave to chance.

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Nozbe Privacy Policy

E-Contracting

I signed up for Nozbe today to help me get stuff done — and to keep things from falling through the cracks. I liked their privacy policy, so I thought I would share it with you. (If you notice a surge in my blogging frequency, you’ll know Nozbe works.)

Privacy Policy

Your privacy is of most importance to us.

When you sign up for Nozbe, your data is being stored in our database and you are automatically subscribed to a Nozbe Users’ Newsletter.

Your data won’t be shared or sold to anyone, for any reason. You have the right to remove your account and delete your data if you wish. It’s all up to you.

You can un-subscribe from the Newsletter at any time by clicking on the link at the bottom of every Email message you would receive.

When processing payments we don’t store your credit card details on our servers. We only send them to our bank for validation.

We are dedicated to your data security

Read more on our secure server infrastructure and triple-backups.

Image credit: iphotobank via Shutterstock. Image may not be copied or downloaded.

2 comments

Dear Dropbox, I’ll Take the Arbitration

Miscellany

Dropbox revised its terms of service recently and sent an email to its users notifying them of the changes. I haven’t read through the entire ToS yet. But Bill Carleton’s post on his Counselor @ Law blog yesterday prompted me to take a look at the arbitration clause. I’m sharing my comment to his post here because I’d like to hear some contrary views. Let me know what you think in the comments or shoot me an email.

Here’s my comment:

Bill: When I read the bit about arbitration in Dropbox’s email alerting me to changes in the ToS, I assumed Dropbox was inserting a class action waiver in response to recent favorable court cases. Many companies have used such provisions to effectively insulate themselves completely from customer complaints. I view this as deeply troublesome, and I’m leaning toward hoping that Congress will overturn recent precedent by legislating consumer protections. (This is in contrast to my initial reaction to the cases, as reflected in my post AT&T Mobility v. Concepcion: Is Class Arbitration Dead?. My views have changed as the subsequent Supreme Court decisions have taken a different tack than I expected and companies have taken advantage of the decisions to the detriment of their customers.)

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Angel Investing Basics

Miscellany

Are you thinking about investing in a startup company for the first time? If so, such topics as preferred stock, convertible notes, and dilution might sound like startup hocus pocus, but you’ll want to know what they’re all about.

In this post, I provide an introduction to several concepts that you should understand before entrusting your hard-earned cash to the founders of what might — or might not — be the next great thing. This post is a basic introduction to angel investing, which covers concepts common to most angel investments.

Startup investments are speculative and illiquid

True to my lawyerly training, I’ll start with the warnings: The first thing to know about investments in startup companies is that they are speculative. Many startup companies fail. This is true of those that gain early traction and successfully raise money from angel investors and venture capital firms, as well as those that don’t. When such enterprises fail, people who’ve invested in them can expect to lose much or all of their investments. So you probably don’t want to invest the kids’ college fund in startups.

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