Cheap is OUT; Value is IN: Communication and Trust Make it Happen

I have learned that trying to guess what the boss or the client wants is the most debilitating of all influences in the creation of good advertising.

Leo Burnett

I took a bit of liberty in using Mr. Burnett’s quote, applied to the advertising industry.  But the concept, if a word or two is changed out, applies just as well to the attorney/client relationship.  I have learned that trying to guess what the boss or the client wants can be a most debilitating influence in the creation of a healthy attorney/client relationship.

So what does the in-house lawyer client want from her outside counsel? In-house lawyers want VALUE for their money, not cheap fees.  But what does it take to deliver value to an in-house team of lawyers, especially a small law department with little in the way of benchmarking tools and fancy matter management systems?

Upon arrival at a new company, a good in-house lawyer takes some time to learn the business.  The newly retained outside lawyer should follow the in-house lawyer’s lead and do the same. The general counsel should expect the outside lawyer to research the company as much as possible using public sources, then spend some time with the general counsel to learn how she does business; gauge her interests, plans and strategic goals for the department; learn where she (and her department) fit into the business; learn how outside counsel has been used in the past; and find out where she sees the future of the inside/outside “partnership.”

Then it is time to learn how the actual business operates - what does it do, how does it do it?  What are the business weaknesses and where does potential legal exposure lurk? The general counsel should introduce the outside lawyers to the key players in the organization. By this I do not necessarily mean the C-Level folks or even vice presidents. Rather, the general counsel should introduce outside lawyers to the people with whom the outside lawyers will regularly work on matters. The small department lawyer must leverage the business resources to provide the needed information to the outside people so that her day is spent performing legal work, not gathering documents and performing administrative tasks to keep the outside lawyer busy. 

Integral to creating a relationship based on value is developing a protocol for communication between the outside and inside legal teams, one that may include the business people. Word of caution: do not open the floodgate by inviting the business client to call the outside lawyer “any time they have a question.” Your outside legal team will be on the phone constantly with your business people and they WILL bill this time.  So, the inside team should always serve as the conduit for contact with the external legal resources. Open communication will serve the general counsel well in several ways:  She will be personally (or through her team) aware of potential legal issues developing; she will have an opportunity to put an internal resource on the problem right away to try and resolve it before it requires expertise or time commitment beyond that available to her via in-house sources; she will be aware of the matters that her team is addressing; and, billings will be monitored, controlled and minimized. 

A very important element for a value based inside/outside relationship is the development of trust.  Trust is gained on both sides through positive day to day, or issue to issue, experiences. Each side of the relationship must be wholly open and communicative about their thoughts, concerns and expectations. There is a social element to building trust as well. There is nothing wrong with spending down time with your outside firms. However, it would be terribly foolish to compromise your decision making on behalf of your client due to the social interaction you have with your outside firms. Lawyers, though, are particularly adept at keeping business and pleasure separate to ensure such compromises do not take place.

  

As a legal matter develops, it can change, the expectations, goals and expected outcomes and means to the end may need to be adjusted as a result. Neither side should bury their respective heads in the sand and avoid uncomfortable conversations. For a healthy, long-term relationship, expectations and deliverables must regularly be updated to reflect changing circumstances.

 

In closing, let me reiterate the most important points mentioned above – communication with and education about the client, about how the client operates, about expectations and about changing game plans.  Following these elementary rules will go a long way in developing and nurturing a valuable, long term, trusting relationship.

Intellectually Honest Discourse

I love a good argument.  There is almost nothing better than stretching your mind while engaged in an open and honest discussion with someone who views things differently than you do.  It is most fun when engaged in the so-called taboo subjects that are important in a big picture sort of way, such as religion and politics.  These topics evoke deep emotion in people and make the challenge of intelligent and honest discourse all the more interesting.

I have a very good friend who does not share my religious beliefs or my political views.  One might describe the two of us as polar opposites – 180 degrees apart.  The interesting thing about our relationship is that, because of a lot of intellectually honest and intelligent discussion, we seem to have influenced each other on certain matters to within 45 degrees of the other.  In other words, because we are able to discuss very controversial and emotional issues that cut to the very core of our  belief systems in an honest, unemotional and respectful manner, we have brought each other around a little bit to the other’s way of thinking.

The two of us have compromised in the best sense of the word, not falsely by claiming to be in agreement for the sake of keeping peace, but having been truly moved to a new way of thinking about the issue.  This is a wonderful experience.  It is only possible if each of us open our minds to the possibility that we may not be absolutely right about everything all the time.

Having meaningful discussions requires openness, vulnerability, respect and a true and pure willingness to contemplate the argument presented by the “opposing party.”  There can be no sarcasm, no red herrings, no manipulation.  Raw honesty is required.   This is easy to do because there is no end game except enlightenment.  There is no case to win or lose, there is only the opportunity to become smarter – if not about the issue at hand, about how your “opponent” thinks.  Knowing how another who thinks differently than you approaches and analyzes issues will also make you smarter, as you experience a different way of thinking that will help you down the line in other circumstances where there is an end game.

In the “real” world, it is not always easy to be so open and honest about the way one thinks.  As lawyers, we negotiate to get our way.  We start way over here, hoping to end up over there.  We've all played the game, each side makes outrageous demands expecting the other side to do the same.  So we adjust our demands based on the expectations we have of where the other side wants to end up until eventually, after the expenditure of many resources, we end up close to where each side thinks they should be.  Each side walks away believing they got the short end of the deal, grumbling that the other side acted unfairly, complaining about the cost and waste of time, but happy to be done with the emotionally taxing process.  This scenario is played out every day across the world among lawyers, car salesman, commodity vendors, politicians, parents and children, and so on.  This is not the intellectually honest and intelligent discourse of which I speak at the beginning of this column.

Acknowledging the difficulty of acting open minded in an adversarial situation, I invite you as in-house counsel, to try a more open approach with your clients.  Say what you are really thinking, be open to viewing the matter from the perspective of the business person.  Allow yourself to be thoughtfully persuaded by the business to a different way of thinking.  It might not change your legal advice, but it will make you a better lawyer

Intimacy?

“Intimate” might at first seem like a funny word to describe the in-house attorney’s relationship with his corporate client.  But what is intimacy in the context of in-house lawyering?  According to Dictionary.com: Intimacy is “a close association with or detailed knowledge or deep understanding of a place, subject, period of history, etc.”

So, intimacy is really quite an appropriate word to describe the important relationship an in-house lawyer has with his client.  Because of our professional obligations, we cannot help but have a “close association” with our clients. As in-house lawyers, we also strive for a detailed and deep knowledge and complete mastery of our businesses.  

When people ask me why I chose to work in-house, one of the reasons I offer is my desire for a higher level of intimacy with the client - a higher level than can be achieved as an outside lawyer.  As an “embedded” legal executive, I am with the business people on a day to day basis.  I sit with the top executives, participate in policy making meetings and on committees formed to address issues in various disciplines, attend marketing presentations and sales meetings and work closely with the purchasing, risk management, marketing, finance, audit, human resources, accounting departments and the board.  But even more importantly, I have the opportunity to see the warehouse, tour the plant, visit the loading dock and the quality control labs.  An in-house lawyer has a unique opportunity to learn the entire business from the bottom up.

Many companies today require executives to spend time in the manufacturing facility, at the retail store, on the production line, in the research lab, manning the grill or working some other front-line job to help them understand how the business operates.  If your company does not do this, then you should be proactive about doing it yourself.  Knowing the ins and outs of your business is essential in making you a better lawyer for the business.

When you know the business inside out, it is easier to: defend cases, draft contracts that better address the unique needs of your business, appreciate the human resource climate, understand the culture and know what is important to the business.  Most importantly, it becomes much easier to be proactive and provide value in ways the business might not expect from their lawyer.

For example, a lawyer friend of mine from another company was called by the president of one of the operating companies he supports when a customer approached the president about jointly creating a new product.  My lawyer friend's company is not an R&D company; it manufactures a low tech product sold on the commodity market.  Because my friend is embedded in the business, he knows it very well.  His clients, including the president, know how engaged he is and thus regularly consult him on a myriad of legal and non-legal matters.  The president called him as soon as she hung up the phone with the customer.  My friend sat in on the initial meeting with the business folks and the potential partner and was able to identify several very important potential pitfalls that were not even on the president’s radar screen.  My legal friend helped craft an agreement that protected his company from the pitfalls as well as ensure proper ownership in the potentially profitable jointly developed product.

In short, the lawyer who knows his business is a better team member and a much more valuable asset to the company than a lawyer who does not.  In order to be a good team member, the lawyer must be focused on cooperation and coordinate his effort with the group.  Of course, a successful team member must understand how the team works and, ultimately, the final goal of the team.  Becoming “intimately” involved with your business gets you and your team to the goal line and beyond.

Emotional intelligence — don’t forget the human element*

A lawyer friend told me a story last week about a case she had been working on. Turns out that years ago, one of the employees at her company was severely injured in a tragic plant accident while on the job in South Carolina. The case settled long before her tenure at the company began. Because of a bookkeeping snafu, the company continued to make payments for medical coverage for the injured worker for years after the settlement, payments that it had no obligation to make. Recently, upon discovering its error, the company decided to discontinue making the payments. My friend, the company lawyer, was tasked with communicating the decision to the former employee.

The former employee was well respected and very well liked. Her injury impacted many of the people with whom she worked as well as those in the administrative offices who handled the subsequent lawsuit, human resources issues and workers’ compensation claims. The company bent over backwards and went far beyond its legal obligations in assisting the employee at the time of the injury and, as it turns out, after the matter should have concluded with the settlement. Even decades later, people at the company who worked with the former employee tear up when discussing the case.

You might guess that it was difficult for my friend to manage the case because of the emotional elements surrounding the injury and the impact it had on the injured worker’s life. However, lawyers deal with many “emotional” issues and must separate themselves from the personal aspects of cases such as this one. She handled the matter as she would any other personal injury case – in a very business-like and professional manner. No problem there.

 
However, the real challenge came from within the company – from those who worked closely with the former employee. Because she was so well-liked, the emotional scars that remained were aggravated after all the years. My attorney friend experienced pushback from some of the employees with whom she needed to work to resolve the cessation of the gratuitous medical benefit payments. To her, it was simply a part of her everyday business/legal work. But to those with whom she worked, the case tore open long since hidden wounds and emotional trauma that evoked very emotional responses.

As in-house lawyers, we often deal with emotional issues. To preserve our sanity, we disassociate from the emotional elements of the matter so that we can make an objective legal decision. However, once we have done that, we must invoke our emotional intelligence skills in order successfully implement the recommended action, especially when working with others who may not be used to doing that. A lawyer’s “business as usual” manner may well be off-putting to those unaccustomed to turning off their emotions in this way.

In a situation such as this, to help ensure that such an emotionally charged task goes smoothly, the first thing one should do is reach out to those involved in the original case to get a handle on how the company dealt with the emotional issues at the time of the accident and the emotional impact that it had on the work force, paying particular attention to the people who were directly involved and their feelings at the time. Then reach out to those still with the company, and who would be assisting in effectuating the change, to assess their current emotional state regarding the incident. Clearly, as it turns out, they were still very much impacted by what had happened to the former employee. According to my friend, there may have been undue feelings of guilt associated with the accident and a general feeling of “there but for the grace of God go I” mentality. This may have accounted for the generous manner in which the matter was resolved in the first place many years ago. Whether these resurrected feelings are appropriate or not, they exist and must be taken into consideration when formulating a plan.

If you are tasked with carrying out such a charged assignment and you take the time up front to assess the emotional environment, you will be that much better able to implement a plan that accounts for the feelings of those who would be needed to assist in getting the job done and help them handle it without so much additional upset. In other words, you would empathize with those with whom the former employee worked, acknowledge their feelings and address the resolution of the matter in a proper tone and manner, taking into consideration their feelings about the matter, rather than adopting a “business as usual” approach. The objective would be the same but by accommodating the current employees’ feelings, you will make the job much easier for all involved and likely minimize pushback.

The lesson of the day is to be aware of the emotional impact your legal recommendation may have on your client base and communicate your advice so that it is received not only with an appreciative intellect but with a welcoming heart.

* Originally posted December 8, 2011

Enhance Your Integrity by Fessing Up to Your Mistakes

“A man (or woman) must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them. “

John C. Maxwell

A source of great discomfort for many people, especially lawyers, is to admit error.  As lawyers, we often look for someone to blame when something goes wrong.  We work hard to find the root cause of the problem.  We do this for several reasons, among them: (1) to assess responsibility and accountability (usually financial) so that the “wrong” can be made “right”; and, (2) to ensure that the same mistake is not repeated.  But what happens when your investigation concludes that you caused the problem or made the mistake?  How many of us are man or woman enough to step up to the plate and take our due, at whatever expense to our career or personal life?

We are not paid to make mistakes.  We are paid to avoid them.  Lawyers live in a grey world where there is usually no course of action that is 100 percent risk free.  Rarely are we involved in a decision that gives us the option of “no risk” versus “certain risk.”  Inherent in the practice of law is the possibility that a risk will be realized.  In such cases, clients look for blame, and it is often the lawyer to whom they look first.  This is a hazard of our profession and should be avoidable by fully informing our clients of the risks involved in taking certain actions over certain other actions, and of course, documenting that advice for later reference if needed.

However, what does one do if a real mistake is made and you are the cause?  In my opinion, the best practice is to fess up and admit when you are wrong about an issue and move on.  Being upfront and honest about how the mistake was made and the circumstances surrounding it gives you credibility and ensures your good reputation with your client.  This is very practical, but difficult, advice to both give and to follow.  However, there is terrific upside.  The most important positive long term benefit is that your client will learn to trust you more.  If you can admit that you made a mistake in a certain circumstance, your client will believe you and trust your judgment the next time because she knows that you are not trying to hide anything from her or to simply make yourself look good.

Another reason to be upfront is that the people with whom we work on a daily basis are very smart –  smart enough to figure out if the intention driving your finger pointing is to focus attention everywhere but upon yourself.  They will eventually figure out where the problem originated at which point you will either be immediately out of a job, on your way out of a job, or effectively distrusted to the point where you can no longer perform your job effectively.  A friend of mine told me about an interview he had with the CEO of his company.  The CEO told him that the company is very leanly staffed and if you make a mistake, own up to it and move on – but do not try to hide it because there is nowhere to hide and that it will be discovered sooner or later.  This same friend told me that there have been a couple of times when he has gone to his boss and said, “I screwed up.”  He said, “It isn’t easy to do but easier than I thought it would be before I started the job.”  This lawyer has clearly established himself as a trusted advisor in the company and has developed a relationship with his supervisor that allows this to occur.  Much is to be said for the supervisor who recognizes that people do make mistakes and that allowing them to come clean is a positive approach to dealing with errors and the steps necessary to correct them.

The first step in Maxwell’s advice is to admit the mistake, first to oneself and second to the people to whom you are responsible.  A mistake usually leads to wisdom.  A typical lawyer will then work very hard to correct the mistake (and no doubt succeed in correcting it).  In the end, you will be a better, smarter, more trustworthy attorney.

“No one who conceals transgressions will prosper, but one who confesses and forsakes them will obtain mercy.”

Proverbs 28:13