How to Manage Your Lawyer
Eventually we all need legal advice in business with key legal areas. When your first form or acquire your business, you should have counsel review all documents to represent your best interests. When key contracts arise with customers, suppliers, employees, investors or new partners, you need legal counsel. Basically, any time a significant agreement becomes necessary to grow or change the way you do business, you should seek counsel to help you stay out of trouble. Have you ever hired a lawyer and felt like the process was getting out of control? For me, there have been times when the bill provides a shocking reminder that I need to manage my lawyer, just like any other service provider. No one is going to tell you that your lawyer is out of control. You are going to have to recognize the signs. Here are some that I’ve learned: Money: You engage with a lawyer, the bill arrives and you find yourself surprised by the size of the invoice. You weren’t keeping track of the time you and your lawyer were talking, but your lawyer sure did. Now it’s time to pay the bill. Time: Sometimes legal matters become extraordinarily time-consuming. Lawyers get paid to manage risks for their clients and keep them out of trouble. Since lawyers get paid for their time, a natural incentive exists to spend as much time as can possibly be necessary on a legal matter. Focus: I find that some lawyers lose sight of the main objective of the legal engagement. Despite good intentions, they start managing minor legal issues rather than the main one. Negotiation representation: This issue continues to challenge me. Lawyers like to argue and negotiate on behalf of their clients. Problems and conflicts can inevitably arise that upset both parties. I’ve had business deals blow up only to find out later that my lawyer was negotiating vigorously on my behalf on unanticipated legal issues. Once you understand what can potentially go wrong with your legal representation, you are in a better position to manage your lawyer. Here are a few tips to help you manage your lawyer during your next legal issue: Set a budget: Ideally, set cap on your legal expenses. It is very reasonable to ask your lawyer for a budget with a fixed dollar amount or to provide a narrow budget range. Some lawyers might argue that they need to do the job right and not worry about a budget. Recognize this potential conflict of interest if it arises. A budget can be your condition of engaging a lawyer in order to control legal costs. Control the time—for both of you: You can set time limits for managing legal issues that will help you manage your budget and your emotions around the legal matter. One of the best pieces of legal advice a lawyer gave me was to set aside a certain number of hours per week to work on a legal matter, and then stop. Be done with it until the next block of budgeted time. Stay focused on the main legal issue: Let’s say you are trying to acquire a piece of property and have engaged a lawyer for an agreement of sale. The legal focus has shifted to an unlikely scenario in which the environment could be contaminated as a result of the prior owner’s business. While this might be important, it is unlikely and therefore a minor issue. You can insist that this be addressed quickly and with standard legal language. Then bring the legal focus back to the agreement of sale, the primary legal matter. Negotiate key terms yourself: Make sure that you have an agreement with the “other party” in writing, with a term sheet, before engaging a lawyer. Unintentionally omitted essential agreement terms might get messy as your lawyer and their lawyer negotiate. Recognize when you need to intervene and speak with the other party directly to agree upon key terms. Managing a lawyer can be difficult. Left unmanaged, lawyers can start behaving like any other employees, subcontractors, or service providers, resulting in a loss of control over your time and your money. A reasonable business lawyer should understand your business’s need for a legal budget. If your business deal starts unraveling, then you might need to provide focus to ensure that you, and not your lawyer, are negotiating the key terms between you and the other party. Sometimes using the right management tools will help you get what you need from a legal transaction without breaking the bank. Give them a try the next time you need a lawyer. Copyright © John McAdam 2015. All Rights Reserved.