Everybody’s heard the phrase, “Men are from Mars and women are from Venus”. Back when I was a student I discovered that there was a similar distinction between business people and lawyers. As a member of a joint JD/MBA class, I could tell, without any prior knowledge, which students were from the business school and who were from the law school based only on their questions and comments they made during the lectures. It seems that business people always focus on the most direct route to achieving their goals. More than anything, you business want to know what’s the bottom line. Lawyers, on the other hand, are concerned about the implications of achieving any such goals and the ways in which we can minimize any foreseeable risks that may undermine them. If you want to visualize this relationship, just think of football: business people are on the field playing, while the lawyers are on the sidelines throwing flags. No one really pays attention to us when the game is going on (except to blame us if things go wrong) but we are needed to ensure that everything is done right.
My way of thinking about business people and lawyers was once again validated by Adriana Gardella’s piece about how the owners from the She Owns It business group view the role of attorneys in negotiating with larger companies. While one business owner (Ms. Lord) said she “prefers to use her lawyer as little as possible on deals”, another (Ms. Blumin) noted that she could not take this approach because the larger companies she works with always have attorneys who step in and change the terms of the already agreed upon term sheet.
1) Your Attorney Will Protect You From Foreseeable Risk
Though Ms. Lord believes “[t]here’s no reason to make changes to accepted terms…” I beg to disagree. Remember, as business people your eyes are focused on getting your deal done ASAP so you can move on to your next big thing. You rarely think about or look for potential risks. Doing this, however, is a lawyer’s raison d’etre. So, if you have competent counsel, they are going to pinpoint and highlight these risks; and if that means changing already agreed upon terms to minimize any potential fallout, then so be it! By filling in your blind spot, the lawyer is actually helping you to protect your business.
2) Your Attorney Will Protect You From Changes In The Law
A third owner (Ms. Brearwood) noted that “Once you get familiar with contracts, you don’t need a lawyer. ” She reasons that over time you will become so knowledgeable about the contracts terms, you will come to know which “terms are standard and which aren’t…” I have to agree that Ms. Bearwood is right on this point. However, from my experience, business people tend to mainly focus on the provisions in contracts that reflect the information in the the term sheet. Most of the time you guys totally ignore the boilerplate language. But guess what? Laws and regulations change and when they do, the boilerplate must change to reflect this. Only a lawyer would be aware of this. Actually, despite her earlier statement, Ms. Bearwoods admits that she occasionally has her husband, a lawyer, review her contracts.
3) Use Your Legal Knowledge To Stay On Top Of Your Lawyer
Finally, one of the members of the She Owns It group advises business owners to “understand the laws that affect their businesses” so that you can micromanage your lawyer. She doesn't believe it makes good business sense to simply leave everything into the hands of an attorney who may not be as familiar with the types of contracts your business uses. Now this a point that I can agree with 100%! Actually it’s the reason why I work so hard to keep you up-to-date on the small business legal news.
