Commerce has undergone massive changes in the last quarter century, and the legal industry has also been shaken up by developments such as Legal Zoom. Yet law has not kept pace. While businesses starve for an affordable, proactive way to get legal help, most lawyers still adhere to reactive approach. They are stuck in their old role of hero, rushing in to save the client only after the client has a problem that urgently needs to be fixed.
Unfortunately, this outdated method does nothing to help businesses grow. And of the many business leaders today, very few speak from the standpoint of how the relationship between business and law can — and should — be re-forged. But there is a better way for businesses to benefit from law. This revolutionary approach requires organization and management by the lawyer, as well as following these seven rules:
- Don’t Dole Out the Same Old Services. Law firms still tend to provide the same old services in the same old and tired ways. That’s because tradition, aversion to change and predictably profitable business models provide little impetus for the growth of ideas. This status quo also persists because small business leaders do not realize there is a way for their lawyer to become an integral and affordable part of their business. Lawyers need to focus on actively changing the relationship between legal advice and business strategy.
- Create a Best Practices List. Business deals with law mainly in terms of two provinces: transactions and claims. Transactions include contracts, business formation, or an administrative issue that deals with the government. Claims can be against, or on behalf of the company. In either case, law’s role currently tends to be reactive rather than proactive. Certainly there are exceptions, but very few lawyers have an ongoing best practices list for their business clients to follow that will adequately protect and improve their company.
- Don’t Play the Hero. The reason lawyers still think in this antiquated way is that they are trained to do so — and they get a massive emotional payoff from playing the hero. This is particularly true when claims are involved. The typical attorney client relationship adheres to Stephen Karpman’s Drama Triangle — of the Victim, Persecutor, and Rescuer. The client plays the persecuted victim. The lawyer’s role is to rush in and rescue the client for enormous emotional and, of course, monetary gain. The television crime drama Better Call Saul encapsulates this psychology perfectly.
- Become the wingman, not the tow truck. To be fair to lawyers, fixing problems can be very complicated, time consuming and, thus, expensive. This is how the law/business relationship has always worked in the past. But what if the lawyer’s role changed into that of the client’s wingman — and the lawyer was involved in anticipating and preventing problems instead of merely being a tow truck in wingtips, attempting to fix them after the fact? Think of Ecclesiastes: “There is nothing new under the sun.” it’s the same for business. It’s time to root out those old mistakes plaguing business for centuries, and shift the approach we take to business law.
- Create a robust system. It takes a robust system to comprehensively and proactively prevent or prepare for inevitable problems. American statistician, management consultant and engineer W. Edwards Deming said, “A bad system will beat a good person every time.” Plug this thinking into law and the problem suddenly seems manageable. Couple it with a system designed to help businesses achieve their goals with a managerial eye from a seasoned lawyer, and the apparatus becomes an asset that adds continuous value to the business.
- Master the core competencies. To help ambitious business owners become rock star entrepreneurs, lawyers should make it a point of practicing proactive and preventative law that fosters growth as well as mitigates risk. To best help the client, that also means making sure to master all of the core competencies a general counsel may handle for a company. The list of eight core competencies includes: corporate governance and administration, claims, contracts, human resources, insurance, policies and procedures, property, and regulatory compliance. Whether or not a lawyer plays a more traditional role helping the business react, or takes a growth-oriented approach involving strategy, a problem or opportunity could arise in any one of these.
- Let go of all traditions but one. Even as a business lawyer is bucking the traditional law practice model, there is one tradition every lawyer should continue to hew to. That’s a grounded and foundational respect for the law itself. Law is not something companies can do themselves — and a lawyer’s role is as critical as ever. A small or medium business or a startup may not always know why having a lawyer on board is so important. But a lawyer’s role is also to put the position in the larger context — there is a craft and a skill to practicing law, and it may be up to the lawyer to convey to the company just what can and cannot be done in any particular situation.
Typically, change does not come easily. In business, change can seem too much like an unwanted disruption. But when the costs of not changing are too high, change becomes inevitable. Most ambitious small business owners do realize that they need great legal advice to grow their companies successfully. When it becomes clear to them how they can get this help without having to succumb to “blank check syndrome,” and when they understand how a legal firm can integrate into their business and help it navigate towards a stronger future, they come on board. **
Matthew Neill Davis is an author, speaker, attorney, and owner at Davis Law, a Law Firm 500 company. A specialist in preventative measures, he helps business owners proactively solve business and legal problems, and also heads custom legal departments at corporations, small businesses, and nonprofits. His new book is The Art of Preventing Stupid: How to Build a Stronger Business Strategy Through Better Risk Management (An Inc. Original, April 2, 2019). Visit