Few would describe lawyers as “innovative”. Given that they are trained to be thorough, careful, and cautious, and given that many are risk averse - whether innately or by training - this is entirely fair. In fact, as one who has practiced law for fifteen years now, I would say that 90% of lawyers are all of those things.
But, innovation is a huge and essential part of being a good, effective, advisor regardless of the context (general business, mergers and acquisitions, litigation, etc.). And, it is a driver for my law practice advising closely held businesses - like PHI - as outside general counsel or special counsel. Frankly, the ability to innovate in order to serve my clients the way I wanted to serve them was the primary reason I left a big firm to start my own firm.
Here is how lawyers help the innovation process:
(1) Designing Innovative Solutions to Secure Business Relationships That Enable Ideas to Become Products
For business clients, the challenge they often face is age-old: securing and protecting their interests while simultaneously “bending” enough to secure “the deal”. This becomes even more challenging when the negotiations involve emerging companies with innovative products. For example, with a company like PHI, its products can literally save lives and the goal of “greater good” means that PHI has to find the perfect deal so it can get that product into the stream of commerce. You strive to find a “win win” relationship. Whether the context involves a contractual relationship with a vendor or business “partner”, or whether it involves acquiring capital, the goal is to secure the best terms possible (and, of course, address the essential legal issues) without pushing the other party away. With a constantly changing business environment (increased regulation, truly global marketplace, information technology capabilities, and the list goes on), business friendly lawyers must design and execute on innovative ways to secure the relationship. They must stay abreast of changes, and they must be nimble and creative.
(2) Innovative Billing and Workflow That Supports the Innovation Process
The traditional law firm billing and workflow models are changing along with the business environment. Traditionally, law firms charge for services at an hourly rate, and multiple lawyers may “touch” a single client matter. With hourly rates rising (it is not unusual for an experienced “big firm” lawyer to charge between $650 and $1000 per hour) and clients becoming more cost-conscious, there is palpable pressure for lawyers to adjust the traditional billing and workflow models.
At the end of the day, though, the goal of any good lawyer is to give his clients sound, correct, advice. As I like to say, “we have to do what we say we are going to do, and we have to get it right.”
How do we innovate with billing and workflow?
First, with billing, we design creative fee arrangements. Clients relish predictability. For that reason, we often provide services for flat fees or with caps. Some clients like to pay a monthly or quarterly “retainer” that covers most or all of the services we provide. Clients are then able to budget for “legal” and are not hit with a large, unexpected bill.
Second, with workflow, we do not generally assign multiple lawyers to handle client matters. Rather, we work one-on-one with our clients as needed. We develop an almost intimate understanding of our clients’ businesses, which helps us be more efficient in developing solutions. That kind of relationship also engenders trust, which is absolutely essential to a good attorney-client relationship.
Finally, with these innovative billing and workflow methods, our clients do not view us as some sort of necessary evil. Rather, we are an essential part of their team and we are a partner in their success. As our firm website says, our mantra is “helping clients thrive”.
(3) Innovative Protection for New Products Without Breaking the Bank
Virtually every emerging company I have worked with as legal counsel has developed novel products or technology. And, many of these companies do not have tens of thousands of dollars to spend on patent counsel (or even trademarks or other forms of intellectual property (“IP”)). So, it becomes extremely important to develop a plan to protect IP as the company moves in the marketplace. This often involves obtaining provisional patent protection, doing careful due diligence on potential business “partners”, careful use of non-disclosure and confidentiality agreements, and, most importantly, careful drafting of agreements with joint venture or other business “partners” to make it crystal clear that original IP belongs to and remains with the client if the partnership ends. Without these methods, a client can find itself holding an empty bag if the business relationship ends. An innovative lawyer has to work hard and be smart to prevent that from ever happening...
Clay Cheshire is on PHI's Board of Advisors. You can see his Firm's website here: http://www.jclaytonlaw.com