“If you’re regularly working with a 360-degree corporate lawyer, they will help you look at everything in your business and identify problems and opportunities as they arise."
The legal services we typically provide to mid size businesses can often be related to a transaction or commercial objective which is transformational for the business.
This can make buying legal services daunting for MSBs. Your transaction is incredibly important to you and you want to get it right, but you also need to keep a tight rein on costs.
What types of legal services should MSBs be using?
As a corporate lawyer, I advise boards of directors and senior management teams to help them achieve their business goals and ambitions. For MSBs less used to working with a legal partner, sometimes the barrier to getting the relationship started is that they are not sure how we can help or how they can access the specific advice they need from inside a full-service law firm like Shoosmiths.
If you’re an SME, you’ll find there are lots of resources made available to you by various organisations – and often for free. If you’re a very large business, you may have your own in-house team of lawyers to fulfil most of your legal needs. This team will be experienced at buying add-on legal services from external firms when required.
For the MSB, especially those on a growth spurt that may not have engaged with lawyers before or who may have outgrown their current legal advisors, there is often a perception barrier to instructing a larger, full-service law firm.
Often an MSB’s first contact with us will be driven by a particular need – they want to do a transaction, or they have a specific problem. They come to us with what they think is the solution and with a very narrow scope of work because they are scared about the fees. They think that if they only tell us what we need to know to provide the limited pre-determined solution, their exposure to legal fees will be limited.
Whereas if they have an early and open conversation with us about their business more holistically, and give us all the background to their current issue/opportunity, we can work with them to deliver the bespoke legal services they actually need in an efficient and cost-effective way. As a result, they will get much better value from their legal partner.
How should MSBs approach these services to get them more involved and reduce their costs?
That’s the challenge for us. The majority of the legal work that MSBs need is bespoke to them. We can’t just put a product on the shelf for them to buy. There is a perception that lawyers have an hourly rate and a clock ticking the moment they pick up the phone. However, most of us are more than willing to have initial meetings and conversations for no charge, especially when understanding the background and scoping out with the client how best we can help them. We want to make those conversations meaningful, building a relationship and getting to know their business over time.
Rather than MSBs thinking that they need to buy legal services from a law firm reactively, it would be wonderful if they could build relationships with a pool of trusted advisors and have quick answers to some of their day-to-day queries. That way we can outline the more complex or bespoke support they will need in advance, helping them plan their business strategies and giving them options to make the best use of our time. This is crucial to ensure they get the best value legal services to realise their business goals.
Legal services can be expensive, but I’d like to dispel the myth that lawyers are always ‘on the clock’. It’s not the case – we are happy to come and sit in on your board meeting and listen to the issues you are kicking around so we can help with your options. Our advice may well be different and most likely cheaper. Instructing us to deliver a predetermined solution just makes it more difficult for us to advise fully or properly, and it’s probably more expensive in the long run.
The quality of thinking that MSB leaders can achieve by taking a step back or looking at the business will be improved by just having a chat with a lawyer now and again. We will offer a different perspective from your accountant or your bank. We can help you identify an opportunity or notice a risk or a problem before it’s too late or becomes more expensive to fix.
Can you provide examples of how legal advisors can help by working with MSB leaders?
Many of our ‘no charge’ chats with MSB leaders are about potential routes to an ultimate exit or how we can help a business get ready for sale. Someone might be preparing for retirement and looking for
a trade buyer or succession planning for the next tier of management.
However we can come in and discuss key business areas such as commercial contracts, corporate governance, IP, regulatory, HR and pensions to identify (and fix) any risk areas or weaknesses and help MSBs prepare their thinking ahead of any transaction.
Even where a business is nowhere near ready for an exit, pausing to take stock and taking a step back from the daily operations can be hugely beneficial.
If you’re regularly working with a 360-degree corporate lawyer, they will help you look at everything in your business and identify problems and opportunities as they arise. We talk to a lot of businesses at various stages in their life cycle so there is not much we haven’t seen before. Whether you’re looking at launching a new product or reorganising a department, talking to us from time to time will mean identifying the legal aspects of your objectives sooner and more effectively – and most likely will save you money on legal fees and reduce management time.
“The majority of the legal work that MSBs need is bespoke to them. We can’t just put a product on the shelf for them to buy."