I grew up riding horses. Like all great horse people my trainer had a knack for distilling wisdom into short statements that left no room for argument and little doubt as to their meaning.
One of the first things I remember him telling me as a young rider was the following. There are only two types of riders in the world: Those who have fallen off, and those who are going to. Similarly, business owners fall into two inevitable categories: Those who have hired an attorney, and those who will.
While the need for good legal counsel when you own a business is clear, there can be quite a bit of nuance as to what type of lawyer and when. Following are a few lessons I’ve learned after 15 years of business ownership, and a dozen years advising other small-business owners.
My first and biggest piece of advice may feel about as hard as the ground every rider comes into contact with, but here it is: Your attorney doesn’t need to be your friend. In fact, an attorney who is also a friend can seem like a benefit yet end up as a bogey for two reasons.
First, a friendship is something most of us don’t want to damage. This can make it hard to say difficult things that need to be said. While your lawyer-friend’s legal advice may not be compromised, the same may not hold true for their objectivity. Someone who is worried about hurting your feelings may not tell you gifting the stock of your business to your children is a bad idea. Nor is someone who values a personal relationship with you likely to shine a light on your short-sightedness, flawed thinking or denial of an unpleasant truth.
Friends have a tendency to choose “your side” simply because they care about you and maintaining your relationship. This is not why you hire advisers. When difficult legal questions arise you need frank advice from a seasoned professional, not a friend. (You’ve got friends for that.)
The best advisers give it to you straight — good, bad or otherwise. If it feels like they’re just telling you what you want to hear, find someone else. The temporary sting of honesty pales in comparison to choosing a path for yourself and your business that ends in subpar results.
The other problem with the attorney-friend relationship is that you may seek their advice — and want to give them your business — on a matter that would be better handled by another lawyer. I see this frequently in the world of mergers and acquisitions. No matter how much you relied on your attorney of record for that real estate, employee, estate planning (fill in the blank) matter in the past, you will not want them handling the sale of your company. This is an area of the law, like many others, that requires a specialist.
Regarding specialists, be prepared to hire a variety of attorneys when you own a business. It’s tempting to want one attorney or firm to be your one-stop-shop for all things legal, and with larger firms that may be possible. But don’t hesitate to search for a specialist when the need arises. It may cost more in terms of both the time required to find them and their fees, but working with the right attorney at the right time can definitely pay off.
Lastly, don’t shop on price when it comes to finding the right attorney or firm. I know, I know. Nobody likes opening legal bills. That envelope from the law firm is the small-business equivalent of a Jack-in-the-Box: Lord knows what’s going to pop out of that thing. But paying more upfront for the best possible attorney given the situation can save money in the long run.
Working with attorneys is a fact of life when you own a business. Avoid letting price, expedience or friendship get in the way of hiring the right attorney for job. They’ll keep you in the saddle for years to come.
Editor’s note: Barbara Taylor is the co-founder of Allan Taylor & Co., a mergers and acquisitions firm in Bentonville. The opinions expressed are those of the author.