In a recent article in the ABA Journal, law firm consultant Bruce MacEwen opines that attorneys in major law firms can never be entrepreneurial.
“Lawyers’ desire for current income is ‘totally incompatible with being an entrepreneur,’ Mac Ewen says. ‘If really you’re going to be an entrepreneur, you have to say, to heck with today, I’m focused on tomorrow. … I don’t really see an investment mentality in law firms. It’s a consumption mentality.'”
So why is it necessary for an entrepreneur and his or her law firm to be on the same page? I’ve come up with 4 reasons.
1. Big Law lawyers will spend your money like there’s no tomorrow.
Having never started a business of their own, lawyers at large law firms don’t really understand how much every penny counts in a start-up or small business. That there is sometimes a push and pull between paying the rent or investing in growth doesn’t even occur to the non-entrepreneur attorney.
Furthermore, attorneys at big firms are under tremendous pressure to bill, bill, bill. Promotions, bonuses, even whether an attorney keeps their job are all tied to how many hours are billed each year not whether they do an excellent job.
After all, big firms have huge overhead they have to meet, and those polished lobbies and conference rooms don’t pay for themselves. You do!
The upshot is your talented, highly-skilled Big Law lawyers are really just expensive, work-a-day employees. But they are not your employee. The work for the Firm.
Most entrepreneurs are aware, employees think very differently than owners. So when you want someone on your team who fully understands what you are up against, another employee may not fill the fill.
2. The lawyer you think is working on your project is likely not the guy actually working on your project.
The aforementioned pressure to bill in Big Law can also result in a quantity over quality problem when the partner you hired sends your matter to a lower-level associate or paralegal to handle. Yes, that associate’s or assistant’s hourly rate is less than the partner, but the underling will also take longer to handle the matter, and the work, though reviewed by the partner, may not be of the quality you were expecting.
All too often, this associate attorney has never met you and your work is just another in an endless parade of random assignments. His loyalty is not to you, but to his partner. His primary concern is that his partner finds his work passable and that his billing volume is high enough to eventually earn a promotion. It is a secondary concern to him whether you are happy with his work.
3. Your Big Law business attorney’s low risk tolerance may lead to over- or under-drafting and commensurately large bills or unnecessary, avoidable exposure.
It stands to reason that someone who is personally afraid of risk may inappropriately gauge how much work they should put into a project for their client who has a higher tolerance for risk.
In one instance, the lawyer may work very hard to try to protect the client from risks the client is either willing to take or which the client has factored into the cost of the deal. This attorney coddling may be very costly for the client, and it can be rather demoralizing, throwing a wet blanket on the naturally enthusiastic entrepreneur.
In another instance, the lawyer may interpret the entrepreneur’s natural budgetary concerns as a sign they are willing to assume unnecessary risks. Without full inquiry, the result may be incomplete work, hastily performed, that the client doesn’t understand and assumes meets his or her needs.
This basic disconnect between the needs and wants of the entrepreneurial client and his attorney may occur because Big Law lawyers don’t speak “entrepreneur.”
4. Even business lawyers at major firms don’t speak “entrepreneur.”
In my experience, entrepreneurs and I click because we both know from experience what it is like to be in the trenches every day. Entrepreneurs, whether legal entrepreneurs or business ones, have an unspoken understanding of one another that may seem like a secret language.
Needless to say, my clients are thrilled when I use this insight into their world to offer them creative, elegant solutions to their challenges and teach them how to go forth and prosper without creating dependency on my firm. (It’s a long-term vision thing….)
As part of every project, I also help them assess the risks and benefits without dampening my client’s enthusiasm and generally help de-stress and simply their lives. My clients know it is personally rewarding for me to be part of the team bringing their business vision to life. To that end, I reflexively help my clients network if I see a good fit and can recommend a whole host of synergistic connections to help my client’s enterprise grow and thrive.
In short, the law firm you select matters. Taking advantage of the natural synergy between entrepreneurial law firms and you, the entrepreneur, can bring unexpected rewards both tangible and intangible.