Make Counsel Your Partner

By: Fitzgerald T. ("Jerry") Bramwell

Good lawyers save you money.

The idea of "legal" as cost savings does not always resonate the first time around, so it bears repeating - good lawyers save you money. And the earlier you engage with counsel, the more likely counsel will be able to add value to spotting potential issues that could affect your rights. The proverb "an ounce of prevention is worth a pound of cure," seems particularly appropriate when discussing the consumption of legal services. When you make your attorney your business partner as oppose to calling him only when the proverbial horse is on its way out of the proverbial barn - it is most likely that counsel will be able to add value. How?

Counsel can help keep otherwise routine business matters from becoming expensive legal headaches. 

Consider the following scenario. Your company has finally developed the better widget. You are extremely excited about this product. All of your pre-market testing has show that it is safer to use than other widgets, and has the potential to offer real cost savings over other widgets in the marketplace. Little do you know that the sales executive in charge of your marketing and sales strategy - the one you've identified as a rising star in the industry - was not completely happy with her share of last year's bonus pool and has decided to test the market. She's actually been talking to your principal competitor and, about a month before you're going to start marketing your new widget, she accepts an offer to run their sales and marketing team.

This defection is not an ordinary defection - in addition to knowing the sales and marketing strategy of your new product, your ex-employee knows much of your pricing architecture for your entire product line, and has strong relationships with several of your important clients. This is not a person you wanted to lose, let alone to your biggest competitor.

So what can you do to keep your star quarterback from joining the other team on the night before the big game? Litigation is always an option, particularly if your employee stole trade secrets or protected confidential information. But, unless your former star left an electronic trail - if, for example, she was dumb enough to download all of your confidential files right before she resigned - it might be difficult to prove that she will compete unfairly. Moreover, litigation is expensive and time consuming - nobody wants to be a plaintiff if its is possible to avoid it.

How could counsel have helped shortstop this defection? Preventative legal maintenance. For starters, counsel might have suggested you consider having your staff enter into non-compete agreements, preventing them from soliciting key customers for a time after they leave your employ. Or counsel might have suggested some deferred compensation arrangements, that would have made defection to a competitor unpalatable.

Preventative legal maintenance can also help a business keep its contracts up-to-date and its human resource strategies closely managed. Preventative legal maintenance can also help a business make sure it is continuing to comply with various statutory and administrative regulations. For example, your business's explosive growth - and attendant hiring - could subject it to one of a number of employment laws that do not apply to smaller businesses. Or, your business's decision to sell products overseas could subject it to new regulations. And if no one is paying attention when the business reaches these milestones, an unintentional compliance failure could prove costly.

What if I am already in litigation?

Litigation is expensive. Good counsel can make it less so by keeping the process focused on resolving the dispute between the parties rather than scorching the earth between them. As a practical matter, this means investing time (and, yes, money) early in the litigation to understand the facts, to review and narrow claims, and most importantly to determine how it might be possible to resolve the matter - be it through dispositive motion, trial, or negotiated settlement - given the business's goals.

The client who has made counsel his partner has a leg up in litigation. For example, counsel who knows the business personnel can more efficiently manage discovery, making it easier (and cheaper) to find the key documents. And counsel who understands a company's culture, business strategy, and goals is in a position to be more creative in negotiating settlement.

After the litigation concludes, it may make sense spend some time figuring out way you ended up in litigation and what might have been done to avoid it. Counsel can certainly provide insight into that process.

So whom do I hire if I decide to hire anyone?

In many ways, hiring counsel to work on your legal matters is like hiring a contractor to do work on your home - you want someone who can do the work quickly, correctly, and with minimum disruption to your life. You do not want to hire more labor than necessary to do the job, and you want a contractor who has some experience in the appropriate area of construction. No one hires a contractor unless they believe that the contractor is going to add value ( for example, by adding an addition onto the property), or preserve value ( such as by repairing damage caused by a fallen tree). Just so in hiring counsel - you want someone that can do the work, quickly, correctly, with minimal disruptions, and who will add value to your business.

Any professional who is not adding value - be they contractor, counsel or administrative support should not be on your payroll. That, however, is another article.

Fitzgerald T. ("Jerry") Bramwell is an attorney with experience representing individuals, and small, medium, and Fortune 500 companies in commercial litigation and regulatory investigations. He is also an unapologetic Yankees fan, an amateur gardener, and a competent home-cook.