Managing Legal
THE POINT
This series is about how the legal system’s subjective and arbitrary character constrains your lawyer from answering “yes” or “no”.
Sometimes your lawyer doesn’t want to be pinned down to a definite answer, and you, as the business client, need to nudge him or her for some specificity.
DISCUSSION
In this fourth post I address the ultimate “human factor” in the law: All legal advice and representation comes to business owners and executives through attorneys.
You see, attorneys are people (fill in your own lawyer joke here).
…
On my first visit to Paris I found myself at dinner with Dr. H. — a family friend and Princeton PhD in physics — a senior official with the Paris-based Nuclear Energy Agency of the Organization for Economic Cooperation and Development (OECD). He peppered me — a newly minted lawyer with a New York firm — with questions about my work.
“You see, Dr. H., the legal system is riddled with subjectivity. It’s all about opinions — of judges, of regulators, of legislators, of disputing attorneys, of lay people acting as jurors.
“Unlike your discipline — there’s no empirical test by which to evaluate whether a judgment is valid or bogus. It’s nothing like nuclear physics, where a consistent scientific focus guaranties objectivity.”
[Cut me some slack here. I was 26. I had everything pretty much figured out, and saw everything in black and white. As I aged, I came to know less and less, until I became the dumb guy whom my kids will tell you they met upon their arrival in the world a few years later.]
Dr. H. (patiently) replied:
“Joel, you might be surprised at how little ‘objectivity’ there is in our field.
“My French colleagues will tell you about the need for a robust nuclear energy as the basis for a strong economy. They’ll minimize operational hazards.
“While my German colleagues will emphasize the dangers of nuclear energy — though their country maintains its own nuclear plants. But you’ll wonder if you’re talking about the same industry as the French have described to you.
“Despite the nuclear industry’s empirical and scientific roots — what you’ll hear about it depends largely on who it is you’re talking with.”
…
So I’ll take it from Dr. H. that no discipline — however rooted in empirical rigor — is immune from the tides of human subjectivity when its practitioners talk about that discipline.
And — as Parts 1, 2, and 3 of this series attest — the legal system is already steeped in subjectivity before the people we call “lawyers” have said a word to their clients.
…
So … how to deal with the “human factor” presented by the lawyers themselves?
First, be aware that some lawyers are aggressive and some are conservative — and choose among them according to your own management style and risk appetite
This will be a constant challenge. Unfortunately there’s no template or formula for it.
In my own practice I help business people take back control of their companies’ legal affairs by lining up attorneys who understand the commercial needs of the enterprise — and who are willing to understand you — the owner or other executive.
…
Second, many business lawyers — both among in-house counsel and among law firms — have a default-to-inaction instinct.
I’ve seen this instinct kick in when an attorney hasn’t thought through their legal analysis.
Or when they don’t understand your business well enough to offer solution-oriented advice — rather than just play “Dr. No”.
…
Ten years into practicing law I accepted a corporate client’s invite to stop lawyering and (eventually) become general manager of a division.
As a general manager, I found that sometimes lawyers (more often in-house counsel but also outside ones) would oppose some course of action I had in mind:
Me
“OK. Your job is to keep us out of trouble and I respect that.
“Could you tell me some more about your thought process?”
The Lawyers
“There could be liability.”
Or: “I see risks.”
Or: “There could be contract liability.”
Or: “There could be tort liability.”
Me
“OK. Do you have a court decision in mind — or some line of cases?”
The Lawyers
“No.”
Me
“Maybe there’s a new regulation I’m not aware of?”
The Lawyers
“No.”
Me
“Has our company signed a contract whose covenants this would violate?”
The Lawyers
“No.”
…
You get the idea.
The remedy:
Make sure your lawyers know that you’re prudent enough to forego a business opportunity if there’s a genuine legal problem.
But let them know that an attorney’s cursory dismissal won’t do. Insist on the discipline of detailed explanation.
[Reposting of a previous post from October 26, 2018]