Most small businesses possess the same legal risks in conducting business as the larger conglomerate and publicly traded companies. However, those larger companies have general counsel; attorneys who are employed and working directly for the company. Well, they must be doing something right, yes? Because every one of them have general counsel. Well, what small privately held company can afford general counsel, right? What if I told you that general counsel does not necessarily mean employed; rather, many smaller companies are working with boutique firms to offer general counsel services by retainer. SEM Law Group is one of them and has represented several privately held companies throughout its lifecycle as general counsel. In this passage, you will read what the benefits are of retaining general counsel, and how it all works. What you might find is that it is not only affordable, but a huge asset for any small privately held company.
RISK OF DOING BUSINESS WITHOUT GENERAL COUNSEL
Nowadays, business is not what it once was where you could shake another person’s hand and know that the deal will go through without a hitch. The world is a different place, yet businesses take as long as they had to grow as the early days of “hand-shake” deals;perhaps even longer now that the internet has brought the world closer together and any “Mom and Pop” operation can become a multi-state or multi-national operation.
When conducting business you share in the risk of “doing business”, and when you inevitably run into legal issues with an employee, with a business affiliate, or a third party company you find yourself in a position where you need legal counsel. The problem is that each attorney you consult knows absolutely nothing about your business, or who you conduct business with for that matter. The cost may end up becoming astronomical just to initiate a relationship with legal counsel with their review of the documentation educating legal counsel over the underlying dispute. Any effective and efficient attorney will need to know how you do your business, “course of dealings” is the legal word for your historical process of conducting business with others, and the facts and evidence surrounding the underlying dispute. There is also “industry standard”, which is the course of dealings throughout your industry.
And although any proficient attorney can quickly adapt to your course of dealings, interpret the facts and evidence, and acclimate himself or herself to industry standards – and may already have experience advocating for clients in this industry – you will still find your business spending money for the benefit of the attorney’s education into the dispute you retained counsel to represent your business interest. Why? Because it is necessary for the attorney to learn everything pertinent about your business and the underlying dispute to be an effective advocate.
GENERAL COUNSEL: PROTECTING AGAINST LITIGATION
What are the benefits of having an attorney as general counsel? For starters, in most cases, if you had an attorney reviewing and or preparing the instruments you execute to conduct business, you will find your business less exposed to legal claims. Business and law run hand and hand, trust me, I know, because in addition to being an attorney I also own a lot of successful family businesses; large ones that have been generating income for decades. It is the reason I went to law school, to gain an edge in business.
General Counsel can assist you with negotiation of your contracts that you use to conduct business with third parties, even your own employees or independent contractors. General Counsel can review, revise or draft these agreements will protect your business from legal exposure. Most contract disputes or business disputes arise due to faulty, uncomprehensive, or ambiguous language agreements. Think about it, when you end up in a dispute with a third party over a transaction, it is generally over an instrument that your attorney then must advocate your interpretation or understanding of the deal. If you had general counsel, the attorney could have protected you before your signature even ended up on the contract sealing the deal.
Most cases that our firm is retained to represent corporate clients are for disputes over contracts, business deals, invoices,or dealings with third parties that have gone awry. All legal situations that could have been wholly avoided if the business and its principal had retained outsourced general counsel review, revise or otherwise draft the agreement. Inherently, an attorney retained as general counsel can reduce your company’s overall legal exposure with each business venture, small or large, avoiding the innumerable cost that litigation almost guarantees.
GENERAL COUNSEL: EFFECTIVE LITIGATORS
Nevertheless, there are situations that come to fruition where no matter what precautions are taken, and even when that risk is severely reduced by means of having general counsel review, revise and or draft your legal instruments engaged to conduct business, litigation ensues. Under those circumstances, having an attorney acting as general counselwho knows your business, knows your legal instruments by revision or draft, and knows your industry and course of dealings, is infinitely more efficient at your representation that retaining counsel for any particular dispute or instance. Why? General Counsel will have participated in the process of your deal making and execution therefore already knows the strategy to defend or prosecute your claims.
What does that translate into? Very simple, fewer and substantially less expensive legal bills. Spend a little for general counsel and you just might save a lot, and even your business, not having to retain counsel when something happens. That is what the larger companies already have figured out with employing or engaging outsourced general counsel.
AFFORDING GENERAL COUNSEL
So how would you afford general counsel? Well, some charge standard rates for engagement as general counsel, and others charge packages. For instance, our firm, SHAMY, EL FADEL & MAHONE, offers General Counsel Retainers, which incorporate flat rate quarterly payments with reduced hourly cost savings that are applied towards time expended. This saves clients thousands of dollars over the course of the year compared to standard legal fees, and of course, affords legal advocacy and advice with a phone call or an email and offers an attorney wholly integrated into your business, thus knows your business, in and out, which is effective legal representation. If more hours are required, more hours can be offered by recasting the quarterly allocation of time paid for counsel. Additional time expended in those instances where you may require more time are billed at reduced hourly rates. Why offer such a deal? Any attorney proficient with clients knows to build relationships with their clients for the long term.
Anyone can afford general counsel… the true question, is can you afford to be without it? This is not a sales pitch, rather an education. By comparison, an attorney who knows your business could end up saving you thousands of dollars, if not more, just by nature of knowing your contract because the attorney participated in the review, revision or draft. Otherwise, general counsel can save your countless hours of your own time trying to educate the attorney over the facts of the underlying dispute.
Bottom line, general counsel knows your business like you know your business. In addition to the savings to your business in retaining outsourced general counsel, you will find yourself saving a lot of money with your own time being spared from your attorney’s access because your attorney will already know where to find, discover or originate the evidence he or she needs to prove your case. Otherwise, in the instance where your general counsel is reviewing contracts or agreements with third parties, your general counsel will know your business and course of dealings to help protect your interests with the revision or drafting of the contract.
Attorneys are expensive, without question, but they are expensive to those that need them when they wait until there is a problem. You may just find that retaining or outsourcing general counsel, although an additional expense to your overhead, will go a long way in saving you money in the long run. After all, those larger companies with general counsel must be doing something correct since each and every one of them have general counsel employed.
Call SEM Law Group, Attorney at Law today and we can discuss how we might be able to assist your business as outsourced general counsel and work with you to ensure that it is affordable. You will then see a difference in how more proficient your dealings become with third parties, your employees, or potential business partners can become with general counsel.