One key to success for business lawyers is to remember its a service industry and be adaptive to the needs of clients, Stephen Hardesty says.
Its very important to keep in mind that, ultimately, were just a means to an end, to help clients work through legal problems and avoid future problems, says Hardesty, adding that the companys money and the lives of its workers are more important than the legal structure.
Hardesty, a partner at Perkins Coie who specializes in mergers, acquisitions and finance, is one of three Boise lawyers who recently put together a continuing legal education course for the Idaho Law Foundation dubbed What We Wish Our Business Clients Knew About the Law. The other two are John R. Sims Jr., former executive vice president and general counsel for Albertsons Inc., and Karen E. Gowland, longtime Boise Inc. counsel and now adviser to the general counsel for the companys new owner, Packaging Corp. of America.
The three have made similar presentations to MBA candidates at Boise State University for the past four years. Their lawyer-focused version debuted as a teleconference Nov. 18. Here are some of their key points:
1. BE CAREFUL WITH CASUAL COMMENTS
One of the most important things for businesspeople to know, Sims says, is that not watching your words in an informal setting can derail a deal or a lawsuit.
Ive had people say things in front of me in elevators that could have been very dangerous if a competitor or opposing lawyer was there, Sims says. And people write things in an email or a text that they would never put in a letter.
Casually passing on a rumor can be especially damaging, he says, and it could add slander to a lawsuits list of alleged wrongdoing.
Gowland says careless conversations with competitors at trade association meetings or in other social settings can ensnare businesses in antitrust laws intended to keep competing businesses from agreeing to restrain trade.
In such situations, she says, an attorneys advice to a corporate client might echo a parents counsel for a prom-bound teen:
Æ Know the host and who will attend.
Æ Make sure you have a chaperone (a lawyer with antitrust knowledge).
Æ Stay out of the bushes (stick to your agenda).
Æ Stay sober, and leave if things get out of hand.
2. KNOW WHEN TO FOLD EM
Lawsuits tend to start the competitive juices flowing for businesses and their lawyers, Sims says, particularly if the allegations seem false or offensive. However, he says, lawyers and their business clients should avoid losing track of practical issues such as cost.
He recalls one company that spent nearly $100,000 to fight a lawsuit when it could have settled for $6,000.
Litigation should be treated like every other business expense, he says. If settling wouldnt endanger the companys reputation or cause other significant damage, investigate settlement options.
When a business is sued, Sims says its wise and very effective for the leaders and their lawyers to meet with plaintiffs and their lawyers shortly after the legal action begins before the two sides become entrenched. At that meeting, he says, both sides must agree that nothing the other says will be used against them.
Thats resulted in quite a few cases being settled very early on, and sometimes the suit just goes away, he says.
Also, he says, Dont start without knowing what you want. Whats a good deal? Whats your worst case settlement amount?
After that, he says, its just math.
3. THINK AHEAD
Pre-thinking is also essential in forging a business deal, Gowland says.
Think about how to get out of a business deal as much as how to get into one, she says. Consider what happens if the deal goes sour or a product launch goes bad, and get that into the agreement up front, she says. Its sort of like a prenuptial.
And if a company has inadvertently run afoul of government regulation, such as exceeding a permit amount, its leaders should inform the regulatory agency, she says.
Its always better to try to stop and deal with a legal problem in advance rather than wait and see if you get caught, Gowland says. You wont avoid penalties, but it will make them less, probably.
4. KNOW YOUR CLIENTS
In building relationships with clients, Hardesty says its useful for attorneys to look at the personality and business style of their clients and adjust their legal style accordingly.
I really try to be very astute at the beginning of the relationship as to what the expectations are ... project by project, he says. Does the client want an update every step of the way or only on the bigger points? Does he or she prefer communication by memo, email or a phone call?
Letting business people know they can call to ask a question without incurring a fractional hourly charge can improve communication and ward off more time-consuming work, Hardesty says.
Keeping communication flowing also can prevent misunderstandings over billing, he says, noting that transactions often take more or less time than predicted at the outset.
This year, one cost more than three times what I told the client at the onset, but I kept in constant contact and at the end they were fine with it, Hardesty says. They knew what went into it and why their bill grew so much.
Some clients request flat fees or fee caps, he says, mentioning one good longtime client that asks for a fee cap with every transaction. In one, we ran $13,000 over and we didnt charge that, he says. Its important to meet the market standards and be flexible.
Perkins Coie has a full-time administrator who focuses on alternative fee arrangements, he says. Its a tool that clients are asking for all the time. Were very open to it, and a lot of firms are.
5. BE FAIR
Hardesty stressed that agreements between businesses are social contracts as well as legal ones, and lawyers shouldnt let the allure of victory make them lose sight of fairness, which has practical value.
Even though were hired to try to achieve a certain result, its important to keep in mind the element of fairness and point it out to clients if necessary, he says.
It really doesnt win anything in the end to try to get an unfair advantage, Hardesty says. If you start out with an unfair contract youll get a bad result and youll never be able to work with that contractor again. [It becomes] a lose-lose instead of win-win.
Last but not least, I tell my clients, If it doesnt feel right, dont do it.
Kristin Rodine: 377-6447
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