There are a lot of things business owners need in order to protect their business and make it successful. However, they don’t know how to look for them, or maybe even that such a service or product exits. One example of this is proactive legal services.
Traditionally, the common view by the public is that lawyers are fighters, focused on adversarial ways of dealing with client issues. It’s all court battles, winners and losers, defending clients, taking on hostile witnesses, big arguments of laws and facts - you know, the stuff you see on TV and in the movies.
The perception is that you only call a lawyer when you have a problem. Business owners mostly think along the same lines, so much so that the vast majority are unaware that there are other roles for lawyers, and a better way for them to be used. It’s not surprising that this is the case. In fact, one of the biggest challenges from a legal standpoint faced by business owners is that they aren’t even sure how to use a lawyer for anything other than a lawsuit. The problem with this is that they are missing out on an opportunity to avoid lawsuits, plan for problems, contingencies and risk.
Many business owners don’t see the need for an attorney - they haven’t been sued, so everything is fine - they have no legal issues. They don’t see any value in having someone put contracts together, corporate documents, or set up a process to manage contractors - nothing has gone wrong before, and they don’t see the value of assessing risk. These business owners think like that because they using legal services as only reactive; however there is a much more efficient and effective way for business owners to be using lawyers - it’s proactive lawyering, and it’s way better for business owners than the reactive lawyering they’re all familiar with.
What Are Proactive Legal Services?
Reactive legal services are pretty straight forward, as mentioned, it’s what most business owners associate with legal services - you’ve got a problem, something’s happened, your being sued, whatever the case may be, and then you look for a lawyer to help you. On the other hand, proactive legal services focus on the bigger picture; how can the law be used to your advantage, work for you and try to prevent situations where business owners find themselves in expensive disputes.
Proactive legal services are preventive, non-adversarial, non-confrontational and collaborative. Doing this allows for disputes (both internal and external) to be minimized and the expenses that go along with them; business profitability is better assured.
Proactive legal services focus on the following:
- Managing conflict and avoiding litigation;
- Identifying and managing risks before they become issues;
- Minimizing costs and losses;
- Risk analysis - determining how much risk the client is willing to take on and what the reward is worth;
- Eliminating causes of problems;
- Team centered approach to education and legal issue awareness.
Legal knowledge is at its best when applied before things go wrong. The advantage for small business owners in using legal services should be avoiding disputes and litigation, building solid foundations, and using the law to create value for the company. A proactive lawyer should be acting in a role of trusted counselor, advisor and coach - this is where the real value is for business owners, using their lawyer as a member of the team who provides tangible benefits. A lawyer acting in this capacity should be helping the business to:
- Achieve strategic objectives;
- Run the business more efficiently, with fewer issues;
- Provide solutions;
- Help put in place systems, tools, and training that maximize opportunities and minimize risk and costs;
- Educate business owners on identifying legal issues and risks in advance.
It’s the lawyer acting as a problem solver and helping to design and implement solutions. It is about legal guidance, not arguing in front of a judge about who’s right and who’s wrong.
For business owners the key is for the lawyer to have a understanding of the business. Proactive business lawyers don’t just analyze legal issues and answer only “legal questions”, it’s more about working strategically with companies to minimize risk, combining both business tools and legal tools to get the desired outcome. Understanding business, strategy and people becomes crucial. When a businesses attorney understands the inner workings of the company they will know what works for clients and how to best help them, developing solutions geared towards getting clients where they want to go. At the same time, this typically leads to a stronger relationship between client and lawyer.
Why Proactive Legal Services Are Beneficial to Businesses.
For a business, being as certain as you can about the legal aspect of operations may well be a prerequisite to long term continued success. You aren’t going to get very far if you’re constantly facing regulatory issues, fighting disputes, or dealing with worker issues. These issues are expensive, time consuming and could potentially put you out of business. No business wins by constantly fighting court battles and looking for the next dispute; you can’t prosper long term in that scenario. Disputes and litigation consume far too many resources, mainly time that could be spent focusing on business operations.
If you’re constantly in disputes over contracts, that’s going to have a serious negative impact on your business - it’s almost certainly going to destroy a vendor or client relationship you’ve invested time into building up, which is going to interfere with either your revenue stream, supply chain, or both. It’s in everyone’s best interest to work at avoiding disputes all together. That isn’t to say you’ll never have them, or there won’t be a situation where the dispute is worth it, but you shouldn’t be heading into dispute after dispute. And when they do occur, you should be looking for the fastest, cost effective and efficient way to get it resolved and move forward.
Proactive legal services are about recognizing legal landmines and preventing them from going off. They build up systems and processes that address issues proactively and prevent small problems, often unrecognized problems, from escalating into a legal case that will get into the 10’s of thousands in expenses quickly (and maybe much higher than that).
It is easier, cheaper and faster to be proactive about addressing legal issues, identify them early on or before they happen and take care of them. This, in particular, is where most business owners aren’t using lawyers correctly - a lawyer providing proactive legal services is in the ideal position to help you identify risks and issues that you weren’t even aware of. I understand that many businesses do not think it’s an issue because it’s never caused a problem, but even one small issue blowing up may be something that sets your business back months (or worse puts you out of business). Peace of mind is worth a lot in the business world.
Business owners should hire a business lawyer to build the foundation of the business before things go wrong. It’s about getting the help before you need, or maybe even recognize the need for it. It may decrease legal issues and create fewer circumstances that lead to lawsuits. Efforts are focused on effective systems and processes that are transparent to the workers and employees and ways to handle disputes before they are full blown court cases. It’s about advising and strategizing, predicting what issues may arise and having a plan to deal with them. While this may not sound like the familiar legal services (both to business owners and sadly to many lawyers) doing these things can significantly reduce a businesses risk and liability - which is exactly what a business lawyer should be doing. Implementing systems, processes and best practices in this manner will have a direct impact on a company's bottom line.
Here’s what proactive legal services can provide businesses that typical, reactionary services, can’t
- Legal risks are managed in advance of problems occurring;
- Allows for planning around goals and strategies so futures risks can be identified and planned for accordingly;
- Client-lawyer collaboration towards achieving company wide goals;
- Integrates legal into business operations, so potential issues are seamlessly addressed.
Most business owners don’t think of working with a lawyer until something has gone wrong and they are facing a situation they have to react to. Smart business owners are using a lawyer as a consultant and advisor early on to avoid major issues down the road. It takes less time and money to be proactive.
Launch developed its innovative approach to providing legal services as a way for small and medium sized businesses to take full advantage of proactive lawyering. Working with a lawyer early on can help business owners avoid common issues and build a strong foundation. Contact us to learn more and get a free consultation.